Beyond The Pale -- We're Heading Headlong Into A Recession -- LA TImes Writer Reports -- February 26, 2018

Without question, the best thing on Twitter right now is "TeslaCharts." I mentioned this the other day.

The most recent chart, posted earlier today (and we will see many more before the day is over). Those following Tesla know the importance of Norway to Tesla:

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Beyond The Pale

This story was beyond the pale, even for The Los Angeles Times.

I saw this headline around midnight late last night over at The Los Angeles Times and noted the other headline stories. This morning the story was gone (it's still at The Los Angeles Times; it's just been removed from the "headline" stories) but the other headline stories were still there. Even for the LA Times, this article was beyond the pale, and once the morning editor arrived on scene, saw the Dow futures, moved the story off the front page. Pretty funny. Here's the screen shot:

I think I may spend the rest of the hour just pointing how bad this headline / story really is.

From CNBC, December 18, 2017: the Dow rises 5,000 points in one year; first time ever.

The correction and the recovery:

Today, the Dow is up for the third consecutive day; up around 200 points for the day. If recent history is any guide (to coin a phrase), the Dow will pull back, possibly even have a "down" day but right now, Dow action certainly does not fit the LA Times story.

The one-year Dow, Trump's first year as president:

Recession: no one is predicting a recession except, apparently, some folks on the fringe. In fact, for the Times story, the writer relied on one analyst who spoke at Harvard the other day suggesting that Trump's policies could result in recession. The irony is that the tea leaves, a year ago, suggested that another administration with Obama's policies would have pushed the US into a recession.

This is the 100-year Dow chart. If you look really, really closely, you might be able to see the "correction" that the LA Times writer used to suggest a) the sky is falling; and, b) we are headed straight into a recession, link here. Note that the x-axis is not linear; if it were, the graph would be even more striking:

The LA Times writer? One of the newspaper's (LA Times) most accomplished business writers. No wonder the newspaper is going broke.

I'm sure all the brokers in southern California just loved this article, as if they don't have enough problems with investors spooked by the volatility.

Speaking of volatility: it's obvious even experienced business analysts and writers are uncomfortable with statistics; humans prefer raw data. I see that everywhere (especially when it comes to atmospheric CO2 data, but that's another story for another day). The change in the Dow on a daily basis is now "striking" because the Dow is up to 26,000 points. But the actual swings, in percentage terms, is very, very small. At 26,000 points, any move less than 100 points on the Dow is simply white noise. Exhibit A: 100/26,000 = 0.4% (think atmospheric CO2: 0.04% but 400 parts per million sounds a lot scarier).

The guys that actually know something about volatility? Not so worried.

Perhaps more later; time to move on.

Good luck to all.

Disclaimer: this is not an investment site. Do not make any investment or financial decisions based on what you read here or think you may have read here. The LA Times is suggesting, based on what I'm reading, that we are headed straight toward a recession. Others are not suggesting that.

By the way, I think most reasonable investors were getting worried about the Dow this past year with no correction. The correction was very, very welcome for investors, for at least two reasons:

• it suggested that the market was still working (fear vs greed); and, 
• the correction gave a lot of folks an opportunity to buy shares at a discounted price