Thursday, April 02, 2009

Economic Graphs that Make No Sense

I really can not believe that the WSJ published this graph. It appeared in a story entitled Global Slump Seen Deepening on April 1st. Maybe I am locked in my engineering mind where discontinuous graphs (especially with acceleration) usually indicated a severe problem with a design; severe spikes nearly always signal something drastic happened...not always good.

Does anyone believe that nearly complete 180s in national GDPs will happen in late 2009? Seriously, it's like someone was looking at the data and decided it was too depressing (and we all know how psychology & emotion contributes to "rational" market behavior) so they made it go back up in their dream world.

OK, I am not trying to be Chicken Little here, but this does not make any sense (what really does?).

Given that some energy analysts are now forecasting an energy price spike potentially coinciding with a global economic "recovery" (due to a steep drop off in energy investments as the price of oil plummeted) that rosy jump upwards looks even more unrealistic.

In the long-term, is restarting the economy we have the best solution? What might we make instead?

On another note, some articles I read from various sources (thanks Justin) that help trace some of the systemic changes that contributed to the current situation. If only it were so easy to pin the blame on something or someone. Systems thinkers?

NYTimes: September 30, 1999 Fannie Mae Eases Credit To Aid Mortgage Lending
NYTimes: November 5, 1999 Congress Passes Wide-Ranging Bill Easing Bank Laws

Interesting reading...especially looking in the rear-view mirror.