Five Things You Need to Know: This Is What the Economy Really Looks Like

[marmar]

from Minyanville:




Five Things You Need to Know: This Is What the Economy Really Looks Like
By Kevin Depew May 13, 2011 12:30 pm


A look at Google Finance Indexes paints a grim picture of the economy.


1. This Is What the Economy Really Looks Like... Via Google

I admit it, I really like the Google (GOOG) Finance Domestic Trends indexes. Google Domestic Trends track Google search traffic across specific sectors of the economy. "Changes in the search volume of a given sector on google.com may provide unique economic insight," the company says. Indeed, a look at a handful of the indexes paints a pretty clear picture of why the economic recovery doesn't feel like a recovery even though the stock market says otherwise. (See Minyanville: The Economy Is Not the Stock Market).

Let's start at the beginning. Credit & Lending. The Google Credit & Lending Index tracks queries related to "credit, credit card, chase, loans" etc.



How about Auto Buyers, queries related to "car, blue book, toyota, kelly book" etc.?



And as we might expect, Auto Financing? Yikes!



Well, at least there's the Apple (AAPL) iPad and iPhone to rescue the econo... crap!

........................(more)

The complete piece is at: http://www.minyanville.com/businessmarkets/articles/google-indexes-economy-recession-real-estate/5/13/2011/id/34533?camp=featuredslide&medium=home&from=minyanville

[Donnachaidh]

1. kand r -- thanks for the link! n/t

[Oceansaway]

2. K&R...n/t

[flakey_foont]

3. Thanks for this

[sea four]

4. Very misleading picture this person is painting...

Those are just graphs of google searches, aren't they? They aren't based on real economic data. They tell you absolutely nothing about the economy, and a lot about what people are searching for on google.

[caraher]

5. Right

The assumption is that the number of people looking of car loans, etc. will be reflected in the search engine queries. It's not clear how valid that assumption is, let alone the further assumption that this interest translates into actual economic activity.

One could instead look at, say, actual new car sales...

[Shandris]

6. But actual new car sales don't take into account...

...all the people who are actually LOOKING for a car, both new and used. An auto search is more likely to include those people -- people who may have enough to buy ~this~ car but not ~that~ car, or this car if it goes on the right sale, and so forth. They're looking, but haven't purchased yet. That number should be substantially higher than simply 'new car sales', which establishes a trend.

It's a lot like tagging and trending words. They're new sciences (of sorts) yes...but while we don't have the data to completely validate them yet...neither do we have the data to ~in~validate them either.

[MilesColtrane]

7. The Economy is not the Stock Market and Google Searches are not Economic Data