The Practical Economist


The first thing to say is that we hope you will end up viewing this place as a refuge from the noise of the mainstream Business Press. There’s a lot here…don’t feel obligated to take it all in at one time…stop by…poke around…maybe you’ll come across something you didn’t see the previous visit. What we don’t recommend is that you feel obligated to commit to stopping by on a rigid schedule and take in everything.

Our objective is to be a site where you can stop in for some sanity.

WELCOMEfirst time

You see, the mainstream Business Press sells copy. They're pretty good at it. Now, there are two problems with the prevailing model in the Business Press.

First, the mainstream press doesn't set good priorities on what it reports and what it weights in its reporting. If you didn't know better, you'd think they believe that all economic indicators are equally important.

Second, it's the way the Press reports the data, itself. Almost all of the time, it's not that the Press reports the data incorrectly, but that they don't report aspects of the data releases that are most significant.

We hope that you will feel that you find the truth here.

As to navigating the site, let's dissect the content:

The Editor's Letter is usually updated weekly. The Editor's Letter is a place in which we select what we think is a relevant topic that will be of interest and expound on it. Occasionally, the Editor's Letter will be unchanged for two consecutive weeks; this is usually when the topic is of such importance that we think it bears more time to make sure everyone has a chance to see it..

The Economic and Market Analysis is also updated weekly, the exception being three weeks a year when we're on vacation. On this page, we report the major economic releases of the week and interpret them. It's important to know that we look at major data very differently from the mainstream Press. With few exceptions, we do not analyze data adjusted for seasonality by the Government, but rather work with 12-month rolling averages (and often three-month averages of that to smooth out monthly anomalies further). The problem with working with seasonally adjusted data is that assumptions made about seasonality can obscure real changes in seasonal behavior.

With our Economic Scorecards, we throw a quantitative measure around how well or poorly the economy is performing. There are two scorecards, one for the U.S. alone and one for the globe. Each breaks factors into three categories: leading indicators, confirming indicators, and economic foundation. It's also in this section that we give our measure of where we think Consumer Confidence is. Generally, the Domestic Scorecard is updated the first Monday of the month and the Global Scorecard is updated the second Monday. Investment Outlook is our assessment of the factors that are influencing major asset classes and the likely direction of those asset classes in the medium-term. Probably the first and most important thing to know about this page is our general orientation. We've been told—and believe it's true—that our prognostications tend to be on the early side. You will almost never find us jumping on a trend. On the other hand, do not be surprised to hear us holding sway on a topic in a vein that is contrary to current trends.

You will undoubtedly have questions of your own. We encourage you to submit questions to us and we provide responses in You Asked. On occasion, if we think a question is likely to be one that others have, we will expound on it in the Editor's Letter.

At almost any point in time, there is some general business topic that seems to be top of mind for every business commentator.

 (1) the talked-of breakup of the Euro Zone a few years ago and
 (2) Gold when it was seemingly hitting new highs every month a few years ago.

When there are such topics such that dedicating an Editor's Letter to the subject is not sufficient because the subject is one that is of continuing matter, you will find us expounding on that issue in Hot Topics. More often than not, the debated topic is one over which too much fuss is being made; however, we don't want our not covering the issue-at-hand every other week in the Editor's Letter to be construed as lack of interest in the subject or a tacit agreement that the Business Press is getting it right.

Sometimes there are developments in the business or economic world that point to new developments , fresh risks, or new issues that we feel that the mainstream media is not capturing. In the Commentary, we will editorialize on currents and issues, especially if the factors behind the issue and/or the outcome are more dependent on opinion and perspective than facts and figures.

This is a guide to understanding what's what and where content can be found. We hope that the site becomes an asset to you and is both enjoyable and informative.