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Saturday, February 20, 2010

Inflation manipulation

Karl Denninger calls shenanigans on the Bureau of Labor Statistics:
Remember the market's "cheering" of the "-0.1%" CPI-U reading (core) yesterday?

There's a problem - it was wrong.

Look at the highlighted numbers. Let's multiply them up.

(5.966 x 0) + (.769 x -2.1) + (25.206 x -0.1) + (.347 x 0.4) / 32.288 = -0.12%, or -0.1%.

But it was reported as -0.5% in the line directly above (inverted tone.)

Oops.

I didn't re-run the weightings for the entire series but a quick "eyeball" of the table shows that this should result in a CORE reading of 0.1% (positive), not the negative number reported.

Will the BLS admit to this error? Who the hell knows, but if you have a calculator, you can verify that yet another game to "boost" the market was run, with desire effect - a roughly 1/2% spike in the S&P 500 futures right on the BOGUS data release.... We now officially live in a world where intentionally-incorrect data is published by our government for the specific intention of misleading the markets.
It's entirely possible. I certainly wouldn't put it past them. On the other hand, given the BLS's autopodiatrical assault chronicled in RGD, when they proved their own CPI-U numbers to be less reliable than the Shadowstats statistics they were incompetently attacking, it doesn't stagger the imagination to think they just got the number wrong because they're stupid government bureaucrats.

Of course, either way, you have to be an idiot yourself to put any credence in their reports. It simply doesn't matter what the official paper count happens to be, because debt-deflation is well on its way.

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