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The Mysterious Janet Yellen Plus The Retail Sales Data Farce – Dave Kranzler

Friday, February 12, 2016 13:23

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(Before It's News)

TND Guest Contributor: Dave Kranzler

Retail sales for January were published by the Government’s Commerce Department today. They show an alleged .2% gain for January over December and a 3.5% gain from January 2015. Nothwithstanding the fact that these numbers are estimates based on highly questionable data samples, these numbers do not include any adjustment for price inflation.

Having said that, it’s impossible to know what’s real and what isn’t with Government economic data reports anymore because everything is based on “random samples” that are “seasonally adjusted” by some mysterious X-13ARIMA-SEATS econometrics program. Having studied econometrics and statistics while in the University of Chicago Graduate School of Business, I can say with 100% certainty that econometrics is much more of an “art” than “science.”

For instance, in today’s retail sales report, the Government discloses that the .2% month to month gain in retail sales could actually be anywhere from -.3% to +.7%. The level of “confidence” in this estimated range is 90%. It’s another way of saying that the estimate is useless. Of course, the estimate matched Wall St’s estimate and the stock market jumped up accordingly in knee-jerk HFT-algo driven predictability.

As it turns out, the estimated gain in retail sales reported in January is fully attributable to the seasonal adjustment factors in the X-13ARIMA-SEATS seasonal adjustment statistical meat grinder programmed by Government drones: January Retail Sales: It Was All In The Seasonal Adjustment.

This brings me to the topic of Janet Yellen on the heels of her semi-annual Humphrey-Hawkins (the old name for it) testimony to Congress earlier this week. I’m not really sure how or why Janet Yellen was elevated to the Chairmanship of the Fed, but quite frankly she is an utter disgrace to this country.

Unless she really believes the numbers fed to her by her handlers, she should be embarrassed to get in front of the public and state that the economy is in good shape. She looks like a complete idiot to everyone who studies the facts about the economy and about the data used to represent and “estimate” economic activity.

If she truly believes economic reports like the employment numbers, I have to question her level of intelligence. If she knows the economy is tanking but continues to assert that the economy is expanding, I have to question her ethics and morality.

Without a doubt she is not fit to be what is considered the most powerful Central Banker in the world. She hopelessly either stammered through or avoided some questions tossed out at her by Congressmen to which she should have known the answers cold.

Greenspan was “the Maestro,” not because it took ingenuity to flood the system with liquidity with system every time the stock market started to head south but because his of his ingenious ability to spin his words into something that sounded highly intelligent. Bernanke would show visible agitation and his face would flinch when he was given questions for which he was going to answer with a lie.

Janet Yellen, on the other hand, has been put into a seat for which she is pitifully unqualified. Not only does she appear to be incompetent as an economist, but she lacks any ability to think on her feet when confronted with questions beyond the scope of those she’s been programmed to answer since starting her career at the Fed in 1977.

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About Dave Kranzler:

I spent many years working in various analytic jobs and trading on Wall Street. For nine of those years, I traded junk bonds for Bankers Trust. I have an MBA from the University of Chicago, with a concentration in accounting and finance. My goal is to help people understand and analyze what is really going on in our financial system and economy. You can follow my work and contact me via my website Investment Research Dynamics. Occasionally, I publish on Seeking Alpha too. As a co-founder and principal of Golden Returns Capital, LLC Mr. Kranzler co-manages the Precious Metals Opportunity Fund, a metals and mining stock investment fund.