Talking Economics with Jim Bianco: Why Government Data is Useless

Dec
18

TrimTabs’ President and CEO Charles Biderman speaks with Jim Bianco of Bianco Research about the current state of our economy in the third episode of a three-part series.

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4 Responses to Talking Economics with Jim Bianco: Why Government Data is Useless

  1. buck novak on December 19, 2013 at 3:20 am

    You have it wrong. It’s not the government’s data that is useless. It’s the government itself that is useless. The government’s only function is to malfunction.

  2. Bob Franklin on December 26, 2013 at 2:08 pm

    Never have liked the taste of crow feathers, but after a couple of years of getting killed I’ll have to admit that Krugman and the like were right after all….

  3. Ed_B on December 26, 2013 at 8:43 pm

    Something that should be addressed, but never is, is the question of what kind of a valid economy is built on spending being 70% of it? When one spends more than one creates, one is on the slow slide downhill to oblivion, IMO. The current US economy is not viable over the long term and it looks a lot like this lack of viability is expressing itself in numerous and deleterious ways. Chief among them is the excessively high percentage of unemployed people we have, the tepid economic growth, and the falling take home pay of many others.

    Manufacturing is an area that creates real wealth. It takes raw materials worth X and converts them into products that are worth some multiple of X. The difference between these costs and these earnings is real wealth.

    Spending? Spending in and of itself does not create much wealth. This is like talking about the difference between making the soup and merely stirring it. Spending is stirring the pot but it does not create much wealth except in the retail sector, which tends to be a low margin business. Creating a tasty soup from its cheap components, however, is a worthy endeavor.

    I would argue that saving is more important to an economy than is spending, for it is savings that form the financial bedrock of an economy. These days, it is more trouble than it is worth to save any money. The interest rates are ridiculously low and even that meager amount will be further reduced via taxation and perhaps banking fees as well. It will certainly be obliterated by real inflation.

    Meanwhile, annual US inflation at the consumer level is running at nearly 9%, per John Williams of http://www.shadowstats.com. One can do better financially to front-run inflation by buying the things that we need in bulk at lower prices than to wait to buy as prices rise. Doing that over the course of a year could amount to perhaps 4-5% saved vs. 1% or less earned on a CD. Not that cash doesn’t have its uses. Of course it does. But it is a lousy thing to hold these days from an investment point of view because its buying power is melting away considerably faster than its interest earning potential is rising.

  4. Jim K on December 31, 2013 at 12:05 am

    Reminds me of a nice article on SeekingBread! SeekingBread

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Charles BidermanCharles Biderman is the Chairman of TrimTabs Investment Research and Portfolio Manager of the TrimTabs Float Shrink ETF (TTFS)

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