From The King Report…

The Chicago PMI once gain posted a ridiculous reading (68.6). We explained last month that the ISMChicago uses ARIMA 11 to make seasonal adjustments. Federal agencies and others use ARIMA 12.

The ARIMA 11 generates seasonal adjustments that make data look better than the ARIMA 12.

This has occurred for years but few economists know or recognize this untidy fact. The Chicago ‘Prices paid’ component soared to 81.7 from 78.

Wal-markdown Inventory glut cuts giant retailer down to size

http://www.nypost.com/p/news/business/wal_mark
down_YVHvwp0LJp7lZg7BVyUYlJ

Wait a minute! How can Wal-Mart have disappointing holiday sales?!?! Christmas sales were wonderful per the media and shills. And the BEA says consumption in Q4 was the strongest since 2006!?!

Who are you to believe? Government economic statisticians, the media & Street shills or Wal-Mart?

Lacy Hunt, Hoisington Management’s chief economist, tells us that in the bizarre accounting of US economic statistics an increase in oil actually lowers the GDP Implicit Deflator (inflation).

GDP = Consumption + Investment + Government spending + Exports – imports

Each component has its own deflator. So when the price of oil imports surges, the overall deflator is lowered by the oil inflation because the import deflator carries a negative sign. Yes, this is thoroughly ridiculous, absurd, deceitful, etc. But it is useful to obfuscate the truth about the US economy.

But wait, there is more. Oil inflation also reduces inventories, so GDP is boosted; final sales increase.

Most people don’t understand that GDP is a total fraud due to absurd accounting/methodology.

Nominal GDP, which is 3.5% in Q4, might be as trustworthy as any government economic statistic can be. But if a realistic inflation adjustment is made, most if not all of the economic growth disappears…

After bingeing on Christmas inventory, the world's biggest retailer has been forced to take drastic steps in recent weeks to clear stores and warehouses of excess goods, according to sources close to the company.

The culprit: disappointing December sales."It looks like they are in danger of heading into another negative 'comp' for the quarter," according to an executive at a major Wal-Mart supplier, referring to the retailer's fourth-quarter comparable-store sales, or sales at stores open at least a year -- a key measure of performance.