WSJ: Heard on the Street Deception (?)

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JimEli
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WSJ: Heard on the Street Deception (?)

Post by JimEli » Sun Apr 29, 2012 9:42 am

The WSJ article, Heard on the Street: Bond Investors May Not Let Fed Wait and See has a graph labeled, “Rate Expectations”. It's visually deceptive, possibly even disingenuous. Do you think it was deliberate?

[editted link, should work without subscription]
Last edited by JimEli on Sun Apr 29, 2012 10:18 am, edited 1 time in total.

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Re: WSJ: Heard on the Street Deception (?)

Post by larryswedroe » Sun Apr 29, 2012 10:00 am

There are no good forecasters, including those at the Fed, as studies have shown
Heard a Fed economist the other day on CNBC say that the first standard deviation of the average error in the gnp forecast by the Fed a year out is over 1%. How likely are you to get interest rates right if they cannot forecast economy?
Larry

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Re: WSJ: Heard on the Street Deception (?)

Post by bertilak » Sun Apr 29, 2012 10:01 am

Unfortunately that must be a subscribers-only article. I see just a few lines followed by a login or join-up form.
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Re: WSJ: Heard on the Street Deception (?)

Post by market timer » Sun Apr 29, 2012 10:36 am

JimEli wrote:The WSJ article, Heard on the Street: Bond Investors May Not Let Fed Wait and See has a graph labeled, “Rate Expectations”. It's visually deceptive, possibly even disingenuous. Do you think it was deliberate?

[editted link, should work without subscription]
Why do you find it deceptive?

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Re: WSJ: Heard on the Street Deception (?)

Post by Sheepdog » Sun Apr 29, 2012 10:52 am

Try this link I found thru Google http://online.wsj.com/article/SB1000142 ... 26632.html You should be able to read it without a subscription. A quote:

Bond investors don't have the same luxury to wait and see. Typically, they set prices on what they think the environment will look like in the future—a process that has been disrupted in today's atypical environment by the Fed's Treasury-buying programs. As soon as they feel the Fed has stopped intervening in the market, they will start to really set prices based largely on their own—not necessarily the Fed's—inflation expectations.
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Re: WSJ: Heard on the Street Deception (?)

Post by bengal22 » Sun Apr 29, 2012 11:05 am

Sheepdog wrote:Try this link I found thru Google http://online.wsj.com/article/SB1000142 ... 26632.html You should be able to read it without a subscription. A quote:

Bond investors don't have the same luxury to wait and see. Typically, they set prices on what they think the environment will look like in the future—a process that has been disrupted in today's atypical environment by the Fed's Treasury-buying programs. As soon as they feel the Fed has stopped intervening in the market, they will start to really set prices based largely on their own—not necessarily the Fed's—inflation expectations.
I could not read it fully.
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Re: WSJ: Heard on the Street Deception (?)

Post by 555 » Sun Apr 29, 2012 11:21 am

Sheepdog wrote:Try this link I found thru Google http://online.wsj.com/article/SB1000142 ... 26632.html You should be able to read it without a subscription.
Interesting. I had used google myself and got that link, and saw the whole article, but when I click on your link (with identical address), I only get a portion. It see like anyone wanting to read it needs to google the title themselves. I have two tabs open with exactly the same address, one with the full article (googled myself) and one with a portion (using above link).

As to the graph, the last bar is too short, and the caption is not totally precise, but it's still pretty clear that the 3,3,5,4,3 refer to the number of Fed members believing the first increase in target rate should occur in that year (2012,3,4,5,6, respectively).

Perhaps OP mistakenly took the 3,3,5,4,3 to be predicted interest rates, though they would be odd predictions.

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Re: WSJ: Heard on the Street Deception (?)

Post by JW-Retired » Sun Apr 29, 2012 11:29 am

IMO, it's just an obtuse graph. Apparently (or maybe not so), 3 board members or regional presidents think 1st rate increase should be in 2012, 3 think in 2013, 5 in 2014........

There are 7 board members and 12 regional presidents.....so appears somebody has no opinion.
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Re: WSJ: Heard on the Street Deception (?)

Post by winterescape » Sun Apr 29, 2012 11:58 am

555 wrote:Interesting. I had used google myself and got that link, and saw the whole article, but when I click on your link (with identical address), I only get a portion. It see like anyone wanting to read it needs to google the title themselves. I have two tabs open with exactly the same address, one with the full article (googled myself) and one with a portion (using above link).
This is the WSJ paywall at work. They want all the advantages of allowing google to index all the content yet try to prevent you from reading the content without a subscription.

Yes, the method you discovered is a great workaround. Any story that is locked, cut and paste the title in google and click on the first link that comes up.

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Re: WSJ: Heard on the Street Deception (?)

Post by 555 » Sun Apr 29, 2012 12:30 pm

winterescape wrote:
555 wrote:Interesting. I had used google myself and got that link, and saw the whole article, but when I click on your link (with identical address), I only get a portion. It see like anyone wanting to read it needs to google the title themselves. I have two tabs open with exactly the same address, one with the full article (googled myself) and one with a portion (using above link).
This is the WSJ paywall at work. They want all the advantages of allowing google to index all the content yet try to prevent you from reading the content without a subscription.

Yes, the method you discovered is a great workaround. Any story that is locked, cut and paste the title in google and click on the first link that comes up.
Jiust to clarify, I was talking about Sheepdog's link, who also used google.

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Re: WSJ: Heard on the Street Deception (?)

Post by nisiprius » Sun Apr 29, 2012 12:31 pm

Sheepdog wrote:Try this link I found thru Google http://online.wsj.com/article/SB1000142 ... 26632.html
No, it doesn't seem to work that way. I haven't been able to get a clickable link that works when it's pasted into Bogleheads. You need to Google on the exact quoted title--and I can provide a clickable link for the search itself, Bond Investors May Not Led Fed Wait and See--and click on the link within the Google search results itself. Something about WSJ knowing the "referrer" or something, the link works if it's on a Google page but not elsewhere.
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Re: WSJ: Heard on the Street Deception (?)

Post by LadyGeek » Sun Apr 29, 2012 12:50 pm

Nisiprius's technique works, but here's the source directly from the Federal Reserve: Federal Reserve Board and Federal Open Market Committee release economic projections from the April 24-25 FOMC meeting

WSJ left out a key chart. Check the PDF, which has a lot more info: Projections materials (PDF)
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Re: WSJ: Heard on the Street Deception (?)

Post by nisiprius » Sun Apr 29, 2012 12:56 pm

JW Nearly Retired wrote:IMO, it's just an obtuse graph. Apparently (or maybe not so), 3 board members or regional presidents think 1st rate increase should be in 2012, 3 think in 2013, 5 in 2014........
Are they allowed to change their minds between now and then? :) So, now we need a chart showing an expert's opinions of the probability that each board member will change their mind between now and then, in what direction and by how much their opinion is likely to change.
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Re: WSJ: Heard on the Street Deception (?)

Post by tetractys » Sun Apr 29, 2012 1:02 pm

Yes, I've always copy/pasted the link right from the top of the browser. That seems to work.

Question: Anyone ever wondered why the Fed doesn't use smaller increments to adjust interest rates, like say, in the range of 1 to 5 basis points? It seems to me that could be a way to test the water without disturbing it too much. And I'm wondering about this at the moment because it seems that there's quite a bit of artificial control over interest rates that might be acting contrarily to what the Fed and Banks generally believe. So maybe a very tiny raise in interest rates, far smaller than historically enacted, could create just enough wave to lift a little slime off the beach.

Why not raise the Fed rate by 0.03%? -- Tet

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Re: WSJ: Heard on the Street Deception (?)

Post by JimEli » Sun Apr 29, 2012 3:35 pm

Check the height of the bars in the chart.

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Re: WSJ: Heard on the Street Deception (?)

Post by rr2 » Sun Apr 29, 2012 3:39 pm

JimEli wrote:Check the height of the bars in the chart.
Good catch.

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Re: WSJ: Heard on the Street Deception (?)

Post by tfb » Sun Apr 29, 2012 4:16 pm

JimEli wrote:The WSJ article, Heard on the Street: Bond Investors May Not Let Fed Wait and See has a graph labeled, “Rate Expectations”. It's visually deceptive, possibly even disingenuous. Do you think it was deliberate?
Just because an assistant mislabeled the last bar with a '3' instead of a '2' or ran the chart with a '2' instead of a '3'? I don't get it. You are reading too much into it. Newspapers must run something every day. I honestly don't know how they come up with copy, run it through editing, produce the graphics, lay it out, go to print, and then repeat day in and day out. Tough job. Cut them some slack.
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Re: WSJ: Heard on the Street Deception (?)

Post by JW-Retired » Sun Apr 29, 2012 9:17 pm

JimEli wrote: It's visually deceptive, possibly even disingenuous. Do you think it was deliberate?
I think it is one godawful poorly designed and sloppily executed graphic.
Was it deliberate? IMO, not a chance.
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