# The monthly figures - a recipe for disaster?



## sassa (6 October 2007)

No need to report what the Fed did in September,partly prompted by the employment figures which have since been revised to a massive 93,000 turnaround.As one analyst put it,"They were eye popping."
On the back of the Fed rate cut and the positive monthly figures of employment and consumer spending,the world markets have climbed back to new or near new highs.
Positive reports have put negative reports(durables' orders,financial institutions' write-downs etc)in the background.
That brings me to the title statement-a recipe for disaster?
All booms lead to a bust.All bull markets will lead to a bear market.But when?
Without doubt,the Fed action plus the positive monthly reports have made investors confident.Have they unnecesssarily become overconfident?Have they placed too much faith in their estimates of stock value and the movement of stock prices?Could we really say that the market pushers are not being objective with the mortgage crisis still unfolding?
Overconfidence causes you to misinterpret and misanalyse the true market.
This leads to poor investment decisions which leads to excessive trading and risk taking.
The Fed and the monthly figures-are they boosting confidence too much through inaccuracies and promises to come?


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## sassa (7 October 2007)

Futures markets have a 52% chance that the Fed will not cut at the October meeting,up from 28%.What effect/s would a likely non-cut have on the markets now?


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## sassa (7 November 2007)

Analysts in America question the monthly figures and rightly so.

http://www.nypost.com/seven/1106200...nally_gets_it___on_jobs_figu_44557.htm?page=0

The markets respond to these figures and if not depicting the "real" situation,it can only be a matter of time until they catch up.If the Government is fudging the figures,do they do so in the hope that things will turn around and back up their "estimations?"
If you read the above linked article,you will probably be dismayed as to the method of reaching the 166,000 rise in employment last month.
If the markets are so blase about the figures,then investors would deserve to get "burnt" when a correction occurs.


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