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Old 02-08-2011, 04:19 AM
 
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Quote:
Originally Posted by Philip T View Post
Actually tend to agree that numbers are pointing up. But I do have my doubts about some of the "official" sourced numbers, due to the history of "revisions."

But numbers are just numbers, they barely represent what is going on and often do not correctly point into the future...
The numbers are the only real information out there. Sure numbers can be rigged, misinterpreted or fabricated. So, they are taken with a grain of salt, until validated. Preliminary numbers are offered to give early insight (potentially). Then they are revised when a full accounting is made.

Virtually everything else is extremely misleading by nature. What else are you going to go by? anecdotes? Chain emails? Eyewitness reports?

So, I look out my window and see all my neighbors driving BMWs going off to work on a sunny day. Everything must be great. My personal choice of "news" outlets claims it is so!

Others look out their windows on scenes of desperation. Houses falling into disrepair filled with unemployed workers subsisting on beans and gruel. Their personal choice of "news" outlets reinforces what they see.

Which is correct? Only the numbers provide a possible glimpse of truth. Is it a slam dunk? Of course not! But, it is not simply black or white either. Many shades of gray.
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Old 02-08-2011, 11:20 AM
 
Location: Conejo Valley, CA
12,476 posts, read 18,096,168 times
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I find BMWs to be highly correlated with "I'm over-extended but want to show off" so seeing a lot of them may be a bad sign....
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Old 02-08-2011, 05:49 PM
 
7,773 posts, read 3,180,717 times
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Quote:
Originally Posted by shaker281 View Post
The numbers are the only real information out there. Sure numbers can be rigged, misinterpreted or fabricated. So, they are taken with a grain of salt, until validated. Preliminary numbers are offered to give early insight (potentially). Then they are revised when a full accounting is made.

Virtually everything else is extremely misleading by nature. What else are you going to go by? anecdotes? Chain emails? Eyewitness reports?

So, I look out my window and see all my neighbors driving BMWs going off to work on a sunny day. Everything must be great. My personal choice of "news" outlets claims it is so!

Others look out their windows on scenes of desperation. Houses falling into disrepair filled with unemployed workers subsisting on beans and gruel. Their personal choice of "news" outlets reinforces what they see.

Which is correct? Only the numbers provide a possible glimpse of truth. Is it a slam dunk? Of course not! But, it is not simply black or white either. Many shades of gray.
Relying only on one set of numbers, such as what the GDP is for any country is pretty limited in scope and does not take into account many other factors.

If one wants to see how a country and its people are doing, then GDP is pretty limited.

It does not account for wealth distribution (for example, there are very rich and many dirt poor in Mexico and is one of the reasons I would not consider that country doing very good when looking at the country and its citizens.

It is not a tool giving economic projections but is only a tool to measure current economic activity. A country can also have a temporarily high GDP from a high usage of natural resources to also a misallocation of investments (housing, derivatives etc)


Some better alternatives to measure the well being of the people in a country is:

Gini coefficient - The Gini coefficient measures the disparity of income within a nation.

File:Gini Coefficient World CIA Report 2009.png - Wikipedia, the free encyclopedia

Looking at some of the countries with the lowest GC, are not third world hell holes, but places with a good standard of living, like Canada, most of Europe and Australia, while the US is higher up meaning bad.

Interestingly, China has the same GC as the US

Quote:
Genuine progress indicator (GPI) or Index of Sustainable Economic Welfare (ISEW) - The GPI and the ISEW attempt to address many of the above criticisms by taking the same raw information supplied for GDP and then adjust for income distribution, add for the value of household and volunteer work, and subtract for crime and pollution.
Quote:
Gross national happiness - The Centre for Bhutanese Studies in Bhutan is working on a complex set of subjective and objective indicators to measure 'national happiness' in various domains (living standards, health, education, eco-system diversity and resilience, cultural vitality and diversity, time use and balance, good governance, community vitality and psychological well-being). This set of indicators would be used to assess progress towards gross national happiness, which they have already identified as being the nation's priority, above GDP.
I prefer the GPI or Genuine Progress Indicator the most

Quote:
GPI is an attempt to measure whether a country's growth, increased production of goods, and expanding services have actually resulted in the improvement of the welfare (or well-being) of the people in the country. GPI advocates claim that it can more reliably measure economic progress, as it distinguishes between worthwhile growth and uneconomic growth.
Genuine progress indicator - Wikipedia, the free encyclopedia


Here is a good article on the GPI vs the GDP

GPI (GENUINE PROGRESS INDICATOR) Vs. All Other Economic Indicators: Only GPI, Not GDP, Tells The Whole Truth! That's Why GOP Won't Use It! GDP Treats Crime, Pollution, Medical Expenses As GDP+ -RI10 [tabacco.blog-city.com]


There is also a graph there showing GDP vs GPI where GPI has remained relatively flat since the 50's
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Old 02-09-2011, 11:41 PM
 
4,173 posts, read 3,122,408 times
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Quote:
Originally Posted by user_id View Post
I find BMWs to be highly correlated with "I'm over-extended but want to show off" so seeing a lot of them may be a bad sign....
I hear that!
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Old 02-10-2011, 08:58 AM
 
Location: Sitting on a bar stool. Guinness in hand.
4,429 posts, read 5,898,366 times
Reputation: 1708
Quote:
Originally Posted by J746NEW View Post
Relying only on one set of numbers, such as what the GDP is for any country is pretty limited in scope and does not take into account many other factors.

If one wants to see how a country and its people are doing, then GDP is pretty limited.

It does not account for wealth distribution (for example, there are very rich and many dirt poor in Mexico and is one of the reasons I would not consider that country doing very good when looking at the country and its citizens.

It is not a tool giving economic projections but is only a tool to measure current economic activity. A country can also have a temporarily high GDP from a high usage of natural resources to also a misallocation of investments (housing, derivatives etc)


Some better alternatives to measure the well being of the people in a country is:

Gini coefficient - The Gini coefficient measures the disparity of income within a nation.

File:Gini Coefficient World CIA Report 2009.png - Wikipedia, the free encyclopedia

Looking at some of the countries with the lowest GC, are not third world hell holes, but places with a good standard of living, like Canada, most of Europe and Australia, while the US is higher up meaning bad.

Interestingly, China has the same GC as the US





I prefer the GPI or Genuine Progress Indicator the most



Genuine progress indicator - Wikipedia, the free encyclopedia


Here is a good article on the GPI vs the GDP

GPI (GENUINE PROGRESS INDICATOR) Vs. All Other Economic Indicators: Only GPI, Not GDP, Tells The Whole Truth! That's Why GOP Won't Use It! GDP Treats Crime, Pollution, Medical Expenses As GDP+ -RI10 [tabacco.blog-city.com]


There is also a graph there showing GDP vs GPI where GPI has remained relatively flat since the 50's




Interesting post. But are we really at the same level of equality as both and China and Argentina? And Russia with it oligarchs and Putin's semi police state is actually a place of better equality if I read this map correctly? Really? I not saying this list is out and out not accurate but it doesn't seem quite right to me (intuitively) in all respects.
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Old 02-10-2011, 12:00 PM
 
8,265 posts, read 11,132,925 times
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From looking at that map Pakistan, Ethiopia, Algeria, Yemen, Iran... all better places than the U.S. if one considers GINI Index a better measure than GDP for well being of a country.

Egypt is on there ranked better too, they obviously have few problems with inequality compared to the U.S.
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Old 02-11-2011, 01:27 AM
 
4,173 posts, read 3,122,408 times
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True, but it makes those folks in Ethiopia feel much better about themselves... while they are starving to death.
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Old 12-27-2012, 01:04 PM
 
Location: Floyd Co, VA
3,513 posts, read 5,549,048 times
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I just finished reading Too Big To Fail by Alex Sorkin in an attempt to get a clearer understanding of just what went on. It's a long book to get through and the cast of characters at the beginning runs 8 pages long.

I think I understand why it was necessary for the federal government to step in and prevent a total financial collapse.

What baffles me is how all those financial institutions could knowingly take the huge risks that created the problem in the first place. The only answer that I can come up with is unrestrained greed with virtually no regulations in place so that crazy financial instruments could be put together and sold and traded.

I know that many think that individual homeowners were blamed for thinking that the housing market could only go up and up and up but apparently so did all these Wall Street groups that put together the means for both residential and commercial mortgages to be sliced and diced and leveraged far beyond their actual value.

If the initial grantors of the loans had be required to hold on to that paper and not been able to sell them off to the brokerage firms would they have make so many bad loans?

To me it has the quality of a giant Ponzi scheme.

I can recall when I decided to refinance my home in 2000 that the lender's sales agent kept trying to persuade me to take a much bigger loan than I wanted, to pull out all my equity. He suggested that I could do things like take a great cruise or buy a new car or .... It was really high pressure and I had to kind of fight him on it, taking only enough to reduce my interest rate, pay off my credit card debt and put a new roof on the house while keeping my payments affordable. He also tried to get me to go with an ARM with much lower initial payments but I knew better than that.

My biggest question is: Are there now new regulations in place to keep this sort of thing from happening again or it is still just "Business As Usual" for companies like Goldman, et al.?
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