Since the GFC of late 2007 the Forex Calendar posted on this site has been perversely W-R-O-N-G in its indications of "GREEN-is-GOOD" and "RED is BAD" for an economy releasing the data.
There are several things wrong with this today:
1) Since the GFC we have seen the "safe-haven" behaviour by market participants - if the USA unemployment numbers are terrible, the USD gets bought "because when everything is going to hell, the USD will be the safest place to park your money."
Right ... for now ... because the heat is on the Euro, and the incredibly FAR WORSE condition of the bankruptcy of the USA is not being focused on by the markets.
So what the Calendar is telling us is ... "yes, it might be bad for an economy ... but it is good for the USD."
Then why doesn't the figure appear in G-R-E-E-N instead of red??? Traders are trading currencies ... not economies - and it has been this way for 5 years.
2. The figures themselves as reported, are nothing more than the fox in charge of the hen-house, telling us that there are still 15 hens in the coop, when there are only 12, and those feathers and that blood you can see, is a result of the fox chasing off a marauding coyote! (No animals were harmed in the compilation of this analogy.)
Let's take a look at some of the numbers themselves. Without getting too involved, let's consider the accuracy of the figures we are fed:
a) Biggest decline in factory jobs in 2 years - 15,000 jobs.
b) Number of industries hiring new staff lowest in 3 years
c) The length of a work-week shrank - fewer hours worked
d) Unemployment rate (U3) reported to have DROPPED to 8.1% ... but ...
e) ... the number of people working also dropped ... go figure!
f) 368,000 Americans left the workforce last month - most giving up on finding work ... and ...
g) ... the participation fell from 63.5% to 63.7%
h) There are fewer working-age people in the workforce than at any time since 1981
i) The BLS Unemployment number (U6) is 14.7%
j) Shadow Stats dot com say the unemployment figure is around 22.8%
k) Almost 100million people do not have a job and have stopped looking, or given up on ever getting a job
I could go on and on ... but the point is, when the numbers are bad, the USD gets bought ... and vice versa. The market knows this but still plays along with the charade!
Then we could look at the inflation figures ... CPI mutates every time the numbers appear too uncomfortable. For example, the true CPI would be about twice the current levels, if the truth was told.
Consider how it is done: The cost of meat is counted as a part of a family's expenditure and family budgetary costs. But the price of beef goes up, so they stop counting beef, "because people are not spending money on beef anymore, we don't count it. We cound ground beef and sausages."
Or they count chicken instead of ground beef. And so it goes - the figures have been fudged this way since Clinton and probably beyond, as far as I have been able to discover.
So with the scene set, and most of us understanding that the numbers are fake, why does the Calendar report numbers that are designed to make the USD rally, as RED, and the good, improving numbers, which will cause the currency to get sold off, as GREEN?
Doesn't anyone think this is a bit silly - why stick with a system that is plainly diametrically opposite to what it used to be?
Why publish figures in GREEN or RED ink, knowing full well that the currency to which the numbers pertain, will do the opposite of what the news implies?
I think the Calendar has diminishing value - I admit to looking at it, but only to get a quick idea of the timing of news announcements, so I can remove a trade that might be vulnerable to market fluctuations at that time.
Thoughts?
There are several things wrong with this today:
1) Since the GFC we have seen the "safe-haven" behaviour by market participants - if the USA unemployment numbers are terrible, the USD gets bought "because when everything is going to hell, the USD will be the safest place to park your money."
Right ... for now ... because the heat is on the Euro, and the incredibly FAR WORSE condition of the bankruptcy of the USA is not being focused on by the markets.
So what the Calendar is telling us is ... "yes, it might be bad for an economy ... but it is good for the USD."
Then why doesn't the figure appear in G-R-E-E-N instead of red??? Traders are trading currencies ... not economies - and it has been this way for 5 years.
2. The figures themselves as reported, are nothing more than the fox in charge of the hen-house, telling us that there are still 15 hens in the coop, when there are only 12, and those feathers and that blood you can see, is a result of the fox chasing off a marauding coyote! (No animals were harmed in the compilation of this analogy.)
Let's take a look at some of the numbers themselves. Without getting too involved, let's consider the accuracy of the figures we are fed:
a) Biggest decline in factory jobs in 2 years - 15,000 jobs.
b) Number of industries hiring new staff lowest in 3 years
c) The length of a work-week shrank - fewer hours worked
d) Unemployment rate (U3) reported to have DROPPED to 8.1% ... but ...
e) ... the number of people working also dropped ... go figure!
f) 368,000 Americans left the workforce last month - most giving up on finding work ... and ...
g) ... the participation fell from 63.5% to 63.7%
h) There are fewer working-age people in the workforce than at any time since 1981
i) The BLS Unemployment number (U6) is 14.7%
j) Shadow Stats dot com say the unemployment figure is around 22.8%
k) Almost 100million people do not have a job and have stopped looking, or given up on ever getting a job
I could go on and on ... but the point is, when the numbers are bad, the USD gets bought ... and vice versa. The market knows this but still plays along with the charade!
Then we could look at the inflation figures ... CPI mutates every time the numbers appear too uncomfortable. For example, the true CPI would be about twice the current levels, if the truth was told.
Consider how it is done: The cost of meat is counted as a part of a family's expenditure and family budgetary costs. But the price of beef goes up, so they stop counting beef, "because people are not spending money on beef anymore, we don't count it. We cound ground beef and sausages."
Or they count chicken instead of ground beef. And so it goes - the figures have been fudged this way since Clinton and probably beyond, as far as I have been able to discover.
So with the scene set, and most of us understanding that the numbers are fake, why does the Calendar report numbers that are designed to make the USD rally, as RED, and the good, improving numbers, which will cause the currency to get sold off, as GREEN?
Doesn't anyone think this is a bit silly - why stick with a system that is plainly diametrically opposite to what it used to be?
Why publish figures in GREEN or RED ink, knowing full well that the currency to which the numbers pertain, will do the opposite of what the news implies?
I think the Calendar has diminishing value - I admit to looking at it, but only to get a quick idea of the timing of news announcements, so I can remove a trade that might be vulnerable to market fluctuations at that time.
Thoughts?