by Charles Hugh Smith, Of Two Minds:
“Headline” government data is massaged, falsified or spun for the
purpose of perception management: believe the headlines at your own risk.
Modern investing offers the promise that investors who “do their homework” and use data
more intelligently than the herd can gain a valuable edge. But what if the underlying
data available to the investing public is fundamentally flawed?
The federal government agencies that issue headline data and the mainstream media that reprints the data without skeptical analysis would have us believe that these indicators — the unemployment rate and the consumer price index (CPI), for example — accurately reflect economic realities.
The other indicator that is implicitly or explicitly assumed to reflect the economy’s health is, of course, the stock market, generally represented by the S&P 500 index.