Publications by Steven Sabol
The Road to Default: The Other Side of the Story
Okay so I was gliding through the articles of CNBC.com and stumbled upon one titled, “A Downgrade of U.S. Debt Won’t Matter as Much as You Think.” The argument laid down in this piece is that insurance companies and pension funds are required to hold high quality assets and that U.S. Government debt -no matter what rating is sla...
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A Quick Look At Unemployment
Labor market tightness is defined as the vacancies or job openings rate divided by the unemployment rate. The theory goes that as job openings increase relative to the unemployment rate a tightness is created in that workers get the upper hand in wage bargaining power. Of course the opposite is also true- that is when job opening’...
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The Road To Default: Still No Agreement
Another day and yet another failed agreement. The u.s. Is in trouble folks. Even if a debt deal is reached there is still widespread consensus that the u.s. will lose its AAA credit rating. More to come later.Keep dancin’Steven J. Related To leave a comment for the author, please follow the link and comment on their blog: The Da...
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The Road to Default: Whaa???
Okay so here is what has been happening:The yield curve has been going through a mad flattening- indicating that investors are “flying to safety” and that a recession may be looming around the corner. Why has it been flattening? Well, a string of bad news. For one, GDP numbers came out today and only indicated a 1.3% expansion. Co...
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Informational Easing: A Change In F.O.M.C. Expectations
Let’s analyze the latest FOMC policy move.The FOMC met yesterday and changed up the communications strategy. How so? Well, until yesterday the statement has been saying as of June 22, 2011:“The Committee continues to anticipate that economic conditions–including low rates of resource utilization and a subdued outlook for inflation ove...
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The Dancing Economist’s content will be statistically enhanced.
Recently, I have been fed up. Why? because I wanted to produce professional forecasts on my blog but don’t have SAS. I wanted to forecast with some AR, ARMA and ARIMA models, but couldn’t. Completely heartbroken. I got to thinking- R could probably do all the fancy stuff and more; all I had to do was learn how. That’s the ha...
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Playing Around With R
okay so today we will start playing around with R and will use GDP as our ginny pig.okay so first do the following:1. DOWNLOAD R2. Create a folder and call it “R” on your desktop. Then type ingetwd()this will produce the current place where R finds stuff (you know the data you need to manipulate)3. Copy whatever getwd() produce...
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Playing In R: Getting Down to Business
okay so now we are up and plotting. Let’s dive into some analysis.First we want to see if we can use the series so we have to see if its covariance stationary and that means that its mean is constant and also we can’t be able to predict the errors.we do this by plotting the difference of the terms to get the errors and if we hav...
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Get those plots
Type in the following to get a Q-Q plot and a histogram on top of each otherpar(mfrow=c(2,1))> hist(dlGDP,prob=T,12)> lines(density(dlGDP))> qqnorm(dlGDP)> qqline(dlGDP)the top graph says that the errors are pretty nicely distributed around the meanand the bottom says that they are normal. Ficcissimo!We can take a look at the correlat...
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Breaking it up into trend and seasonal and error components
GDP=scan(“/Users/stevensabol/Desktop/R/gdp.csv”)Read 258 items> GDP=ts(GDP,start=1,frequency=4)> dlGDP=diff(log(GDP))> plot(stl(log(GDP),”per”))This allows us to do a structural decompositionlog(GDP) = trend + season + error Here is the business. Related To leave a comment for the author, please follow the link and comment on their b...
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