America has a massive problem that everyone is denying and refuses to admit.
The financial community, especially the online and broadcast media prefers to drive with only their rear view mirror.
Trillions of dollars are risked annually based on looking behind instead of daring to look forward and projecting what really is happening in the economy, with a corporation, and outside of a narrative provided via internally produced propaganda by “analysts” whose sole job is to promote an investment instrument for the masses, insurance companies, and pension funds to purchase and get off their books. The only purpose of the latter practice is so financial houses can reduce their risk profile and get a profit at any cost to reputation or their customers.
The majority of this current era’s investors think that investing issues only happened way back when some 19 years ago based on a sketchy movie version of events via “Margin Call” (allegedly loosely based on 2007 Goldman’s MBS holdings liquidation), “The Big Short“, and “Too Big to Fail.”
The reality is that for well over 100 years data manipulation by corporations, banks, central banks, and governments at every level has been used to sustain false bravado for the gullible masses to keep their funds trapped in malinvestments so a select few can liquidate their holdings into the safety of cash while the harvest scalps the public of their hard earned and soon to depart dollars.
I. Driving With the Rear View Mirror
This is not a new expression created by this author or anyone else proclaiming it as their own. From a truly psychological perspective as explained via this statement which applies more now than any time in our history:
You cannot physically drive a car forward while staring at the mirror without veering off course.
Of all people, Steve Harvey the comedian made this statement in a video “Let’s Become Successful” which one can watch on YouTube.
How does this apply to investing, the economy, and data as it exists in the current world?
Coming up this Friday is the most anticipated economic data point since the last most economic data point which superseded the previous most important data point.
But what did all of this data have in common?
It was all from the past.
In other words, technicians, prognosticators, financial news “reporters”, and politicians are all pointing to events which have happened already, yet want the citizen, the reader, or worse the investor to believe that the data is so crucial to persuading them to promote and pump their funds into a market which might have changed so dramatically since the accumulation of said data, it truly is useless.
Let’s face a quick reality check; this author is guilty of this practice also, which is why my prognostications which have hit are pretty darned impressive while those that missed truly are bad.
But how bad is the data the masses are receiving? Let’s investigate that further.
II. Facts, Variables, and Utter Nonsense
The supreme fact is that the American people no matter how angry, aggravated, skeptical, bitter, or denegations they might project, acceptance of a superior voice saying “these are the facts” or “this data point is accurate as of today” is now an approved methodology for projecting future economic, financial, or political behavior.
In reality, the majority of the news, “facts”, or data those of us in the unwashed masses have been receiving is 100% bovine scatology.
To provide some background on the “facts” let us take a look at the Unemployment Report aka, the non-farms payroll report being provided by a political, not a statistical entity, this Friday.
The following chart is via the BLS Office of Survey Methods Research and while this author is not using it to prove or disprove a data point, it illustrates an issue when the rear view mirror is fogged.
Does anyone notice the trend without the arrows? If not, please proceed on to the next page promoting unicorn level delusional reality.
The BLS openly acknowledges that survey data response has been in a long term decline yet the financial media promotes every word, every number, and of course all of the reports as gospel. Do they report the revisions? Some of the reporters do but in reality the average American investor and the algorithms that use headlines to initiate automated trading rarely if ever do.
So if fewer, as in less than 50% of citizens respond to this data inquiry, how bad is it on the establishment side?
This data presented last year via Edgeworth Economics illustrates the fallacy of depending on BLS data survey for initial or even future data revisions until annualized data is incorporated. If one has never filled out these surveys because they have always signed the back of a check instead of the front of one, it’s easy to explain as a business gets a threatening letter which essentially says “XYZ corporation had best fill this out or else” and most employer s complied. Until the bad cold of 2020 of course started distorting the data stream even worse.
This excerpt from Edgeworth says it all:
Figure 5 shows that the response rate for the CES has declined from just over 60% during the period 2016 to 2019 to less than 43% over the past two years making payroll employment estimates less reliable and less accurate than in earlier years. Figure 5 also shows that the initiation rate, or the rate at which new establishments are successfully brought into the CES survey, has declined from over 70% in 2015 to less than 40% over the past year.
This author has added the emphasis to illustrate the fallacy of depending on initial payroll survey data.
But does this extend to other surveys and data presentations sold the rear view looking investing public?
III. Statistical Voodoo
As in 2020, during the Covid era, government use of imputed data increased. But in 2025, prior to the government “shutdown” of many departments, it was already on the upswing as the Trump administration insisted that the new tariffs would not impact inflationary trends and the idea that costs would rise for the average American was “fake news.”
The reality is that for decades now, the Bureau of Labor Statistics has incorporated hedonic adjustments, which provides a basis for suspect data results. From the BLS webpage discussing the subject:
Hedonic quality adjustment is one of the techniques the CPI uses to account for changing product quality within some CPI item samples. Hedonic quality adjustment refers to a method of adjusting prices whenever the characteristics of the products included in the CPI change due to innovation or the introduction of completely new products.
The use of the word “hedonic” to describe this technique stems from the word’s Greek origin meaning “of or related to pleasure.” Economists approximate pleasure to the idea of utility – a measure of relative satisfaction from consumption of goods. In price index methodology, hedonic quality adjustment has come to mean the practice of decomposing an item into its constituent characteristics, obtaining estimates of the value of the utility derived from each characteristic, and using those value estimates to adjust prices when the quality of a good changes.
The CPI obtains the value estimates used to adjust prices through the statistical technique known as regression analysis. Hedonic regression models are estimated to determine the value of the utility derived from each of the characteristics that jointly constitute an item.
How does this impact pricing?
The standing theory is that ground beef is of equal quality as steak, hence when steak becomes too expensive, the masses switch to Hamburger Helper or meatloaf as a substitute. If that isn’t Keynesian cow dropping economic theory, I do not know what is. I prefer however to use real world examples, and without even invoking the great phrase “shrinkflation” here is a prime, okay, ground up version below.
Let’s expand on the average steak versus ground beef discussion. I shall use Walmart as the test subject to illustrate the insanity of hedonic adjustments for my readers.
Locally a top sirloin steak, not the greatest, not the worst cut of meat averages $13.94 per pound.
According to the BLS, due to the higher cost of steak, the public on average substitutes this product with “ground beef” as a substitute protein even though they are in no way similar nor is ground beef an improvement on any cut of steak.
Per my local Walmart website the cost is $7.73 per pound. The difference is a staggering roughly 45% price difference but how does the BLS weightings impact this? Per the BLS CPI calculation website:
Beef steaks only carry a 0.128 weighting so one could imagine that if the substitute valuations are this distorted on a simple protein, how much distortion is there on a car, apparel, or car insurance variables from state to state. And this sample is but one of many, without even bringing up the joke about “declining” health insurance costs, a lie first perpetuated by the Biden administration and expounded upon by the Trump economic team.
IV. The Even Bigger Picture
There have been major revision to GDP calculations, and then the National Bureau of Economic Research(NBER) along with the Bureau of Economic Analysis(BEA) decided that Fonzie didn’t jump the shark high enough. The 1995 decision to switch to chain weighting to incorporate technological evolution seemed logical:
The BEA adopted chain-weighted indexes for real GDP to account for rapid technological changes. This addressed the “substitution bias” of using fixed base-year prices, improving the accuracy of inflation-adjusted GDP.
This, at the time, seemed like a logical move.
Then President Obama, whose ego is only surpassed by the current President, has his economic team pressure the economic statistical groups which determined recession beginning and ends plus GDP to revise the structure of the data to improve his historical political standing in an amazing fashion in 2013.
This gem, to this day, the following portion of the methodological revision really takes the cake:
Asset Capitalization: Original video productions (movies, TV shows, and streaming content) by businesses and nonprofit institutions are now treated as long-lived capital assets, increasing measured private fixed investment and overall GDP.
So if a crappy movie is “projected” to earn $200 million dollars during a “projected” 20 year life span in domestic and overseas broadcast, reproduction, and digital sales, that can be annualized and added to GDP calculations quarterly. Even if the reality is that it earns only $2 million over 3 years, wins a Raspberry Award, and laughed out of existence as the revisions are never noticed and who pays attention to facts anyways?
If one dissects every report produced by the government, spoiled lemons like this can be found, but how does that impact reality and the future if everyone is stuck looking in the rear view mirror?
V. It’s All About the Lie
In an article by Business Columnist Michael Hiltzik of the Los Angeles Times, the excerpt from his column of December 25, 2025 titled “The latest government inflation and GDP figures are worthless, and will be for months to come“a great point was made below:
A close examination of the GDP figures also underscores the narrow basis driving economic growth in recent months — it’s essentially the product of robust spending by wealthy consumers and massive corporate investments in AI technology. For middle- and lower-income Americans, the economic present and future don’t look anywhere as sunny as the numbers would suggest.
“The numbers give you meaningful information about the system, but not about how people experience their actual lives,” says financial analyst and economic commentator Zachary Karabell, whose 2014 book “The Leading Indicators” injected some perspective on how we interpret economic statistics and explained why our faith in them is often misplaced.
The inference, accurate or not, that economic statistics is based on faith is not only true from data via the government, but also in private industry. According to the Harvard Law Review, enforcement actions by the SEC against corporations experienced its sharpest drop in a decade:
The SEC Enforcement Division had a markedly slower year compared to FY 2024. While the SEC has not publicly announced enforcement statistics for FY 2025, a private analysis concluded that the SEC brought 313 standalone enforcement actions, the lowest level of SEC enforcement activity in 10 years—down 27% from FY 2024 (431 cases) and 38% from FY 2023 (501 cases).
This chart via JD Supra provides a visual perspective:
But what does this mean to the average investor, American, or overseas fund looking to plow those deteriorating fiat dollars back into the casino known as America?
It means all of the above are on their own regarding due diligence and the ability to discern if a report from a corporation, stock prospectus, or any upcoming IPO is a realistic proposition to make money or more unicorn poop promoted as chocolate gold coins.
Just like 2006 and 2007, the average investor is truly a lonely explorer in the Wild West of Wall Street, forced to determine the path they must choose to determine if the economic and financial data being presented is based on the reality they witness daily or the fluffernuttery promoted by plastic bull throwing morons on television. Too many people in 2006 believed that housing will never crash and burn, yet now the new religion is that technology can never implode again like the .com bust. Worse, the promotion of the day is that private credit is provided as a public service across the board to produce higher returns by honorable souls who would never exploit individual investors like they did in 2007.
Meanwhile the truth is that I warn my readers that unchecked, perpetual fraud is our immediate future as capitalism is replaced by corporatism and eventually state sponsored socialism.
Caveat Emptor.
