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I mean, they already don't. Investors aren't stupid. Half of financial analysis is converting financial metrics from GAAP to other more meaningful structures th
by bko 1y ago
I mean, they already don't. Investors aren't stupid. Half of financial analysis is converting financial metrics from GAAP to other more meaningful structures that allow for proper forecasting and comparison. They spend billions on alternative data, trying to get an edge. They take nothing at face value.
I think the government stuff is a bit of a farce. They have an incentive like any other institution. For instance, inflation metrics are tied to trillions of dollars in terms of retirement benefits or other programs that are indexed to inflation. They have a gigantic incentive to play with the numbers. And I'm 100% convinced that they do. Does anyone believe food prices went up only 28% since pre-covid? Did something go from costing $4 to $5? No, most things close to doubled. But they're able to play with the numbers changing the basket (beef getting more expensive, we'll just swap that out with Tofu!).
- redserk 1y agoWhat?
- amanaplanacanal 1y agoThe basket is determined by what people actually buy, rather than what they would like to buy. And they are about two years behind, so the current basket is based on surveys done in 2023.
- bko 1y agoSo based on your experience, your food budget went up about 28% from pre-covid? They have a lot of discretion, it's not formulaic. If it was, ironically it would be great to privatize! Here are the specs, and provide proof. Easy. Here is from the world bank talking about tight and loose specifications: > The CPI Manual refers to tight and loose specifications of product or item varieties. Tight specifications better facilitate the calculation of average prices and ensure comparability of items across countries, which is the aim of ICP price collection. Accordingly, the ICP stipulates strict requirements for the selection of items for pricing. These may include restricting the choice of brand or the size of an item by weight, volume, or quantity for example. For the CPI, tight specifications tend to be useful for electronic and other items with high rates of turnover. Again, look at the facts: 1. It's complicated and not easily observable 2. There is some discretion 3. Politics and trillions in government spending is on stake 4. The numbers don't match personal experience https://thedocs.worldbank.org/en/doc/2b29c1445d7fa006e5f4ca00087dbe36-0050022021/original/Guide-CPI-and-ICP.pdf https://thedocs.worldbank.org/en/doc/2b29c1445d7fa006e5f4ca0...
- amanaplanacanal 1y agoEverybody's personal experience will be different. I can't speak to yours.