The Secrets of Economic Indicators: Hidden Clues to Future Economic Trends and Investment Opportunities

by Bernard Baumohl

Book Overview

For years, investors, business strategists, and policymakers worldwide have turned to one book to help them translate the massive flow of economic data into knowledge for intelligent decision-making.... This description may be from another edition of this product.

• Format: Hardcover
• Language: English
• ISBN: 013145501X
• ISBN13: 9780131455016
• Release Date: January 2005
• Publisher: Wharton School Publishing
• Length: 376 Pages
• Weight: 2.15 lbs.
• Dimensions: 1.2" x 7.1" x 9.7"

Customer Reviews

Economic Indicators Make for Surprisingly Compelling Reading

Who would have thought there could be an entertaining book on economic indicators? As the Director of The Economic Outlook Group, a renowned consulting firm that evaluates global economic trends and risks, Bernard Baumohl is well qualified to write a tome about economic indicators no matter how dry the subject matter may seem to be. Luckily for us, he has instead written an excellent primer for understanding them and showing how to apply them to predicting future stock and bond market activity, as well as how the currency market will respond. Baumohl is an informative writer not caught up in details or equations that would alienate all but the most academic. With an easy-to-read writing style, he focuses on the indicators which have the greatest influence in the markets, selectively analyzing the ones that do the best job in predicting where the economy is heading. Moreover, he seeks out the indicators where the data are found most easily and in turn, how we can best interpret them. The author smartly presents his findings in an encyclopedic fashion to provide a run-down on 47 U.S. economic indicators, plus a few essential international indicators. The book starts with "the lock-up," which he describes as the U.S. government's process to assure simultaneous availability to everyone of economic data when they are released. Such are the safeguards necessary to avoid leaks which would give anyone advance information that could be used improperly. The next section highlights a pivotal chart that takes the components of real gross domestic product - consumption, investment, inventory change, government spending, and net exports - and signs of price pressures, consequently matching each segment up with the key economic indicators for that segment. Subsequent tables list the economic indicators most sensitive to stocks, bonds, and the dollar, as well as the top ten international economic indicators. Suddenly, heretofore foreboding statistics become clear. Baumohl also provides valuable insight into the unpredictable housing market - with several chapters devoted to how to interpret the real estate-related indicators. Quite thorough in his treatment, he also provides a helpful guide to the economic jargon encountered in using the data, such as annual rates, real and nominal dollars, moving averages, revisions and benchmarks, and seasonal adjustments. Perhaps to the chagrin of registered investment advisors, he explains several important indicators that can be used for privately forecasting economic growth ignored by the mainstream press and goes as far as explaining how you can easily find these updated indicators (or compute them yourself) in most cases free of charge. With this background, the book then turns to a description of individual economic indicators. Each entry for the economic indicators listed explains not only the what, why and how behind it but also what impact it can have on stocks, bonds and the dollar. Baumohl goes into the market se

Promises to Become Dog-eared Quickly

On any given weekday, stocks and bonds gyrate in response to some economic announcement. Bernard Baumohl, a Time magazine economics writer with more than 20 years of experience, has written a guide to these indicators and their importance to the financial markets. The book promises to become dog-eared quickly. In concise language it explains what Baumohl indicates are the most influential U. S. and International Economic Indicators. Beginning in Chapter 2, the author defines the phrases and concepts essential to an understanding of the indicators. In Chapter 3 he jumps into the heart of the matter: U. S. economic indicators. Each indicator is evaluated using the following criteria: * Why is it important? * How is it computed? * What does it day about the future? * How might stocks, bonds and/or currencies react to its announcement? In Chapter 4, he examines the 10 most influential foreign indicators using the same criteria. In the final two chapters, Baumohl provides a list of web sites that compile economic data. What in the past costs thousands of dollars is available on the web at no cost. If any facet of your life is effected by these indicators, you owe it to yourself to keep a copy of this book nearby.

Are they real, or are the government numbers?

Bernard Baumohl's "The Secrets of Economic Indicators: Hidden Clues to Future Economic Trends and Investment Opportunities" starts off with a riff on how investors got sold out by their "expert" advisors and even the stock-issuing companies themselves during the recent crash. He contends investors are in the need for better guidance. The solution, he says, is an individual investor do-it-yourself approach to fundamental macroeconomic analysis based on the reported data that underlies both the domestic and international economy. Make no mistake, this is one of the most useful and fundamentally sound readings of how economies really work you will ever see - much more revealing and educational than a raft of academic books purporting to teach us how the theoretical economy is supposed to function. This book magnifies the real workings of an economy (daily, weekly, monthly) - the inputs that produce the outputs - and how the data generated from those workings is reported, analyzed, and used. Baumohl lists 4 weekly, 43 monthly, and 9 quarterly releases of data in short outline form along with what they are, when they're reported, and how they're computed, along with their expected effect on the stock market, interest rates, and the dollar. His goal, he states, is to answer the question of which indicators pack the greatest wallop in the financial markets and which ones are known for doing the best job predicting where the economy is going, thus influencing investments. He assigns a relevance rating to each of the indicators. It's easy to get overwhelmed quickly and Baumohl is right when he laments that "There is too much economic information out there, and not all of it is useful." He should have added "not all that accurate" either. As you leaf your way through the compilations, you come to realize that the "numbers" that move the markets are frequently incomplete. The queried respondents upon whose businesses and operations are being used to create data are notoriously negligent in meeting reporting deadlines which brings up the question of whether we ever get a full reading of what's being reported. Thus the need for "restating" next time around. But by "the next time," those numbers are irreverent and relegated to history. Question: So, was that big market move last month based on bad info, and if so, will it correct itself when the old data is corrected? Not likely, because a new set of questionable data just got reported and is now at center stage. Deja vu all over again. For all the questions it raises, this is a good attempt at trying to get a grip on the maze of financial accounting we're still trying to clean up, but it points out more holes than it fills. One thing Baumohl doesn't address which would be a good subject for a follow-on book is that indicators don't have the same influence consistently through time. Each seems to have a life all its own. From the body counts (Vietnam) of the late 1960s, to the oil price increases of the mid-1

Recommended to everyone interested in Economics!

Baumohl, a former economics reporter for Time magazine, has written a tremendously useful source on economic indicators. Using examples from real life, he starts out by explaining in detail the importance of these indicators to the investing community and defining the terms used when discussing measures of economic performance. The most valuable section of the book provides detailed descriptions of over 40 economic indicators, among them employment, consumer spending, national output and inventories, housing and construction, foreign trade, and productivity and wages. Baumohl considers a variety of factors when describing each indicator, such as what exactly it measures, how it is computed, where to find the relevant report on the web, the day and time this report is released, the source of the information, and how often the information is revised. He also discusses the market impact of these indicators on bonds, stocks, and currency. The book ends with profiles of international indicators and a listing of where to locate them on the web. Bottom Line: Although this book is marketed as a tool for investors and is not organized like a typical reference book, it belongs in the reference collection because it explains so clearly what the various economic indicators are and how to locate data about them. Recommended for all libraries.