Comparing Apples to Aardvarks!

by Larry Levin

You have no doubt used the phrase "comparing apples to oranges" in an attempt to explain to someone that they are slightly off in a comparison. Apples and oranges have the same roundish shape, they are both fruit, and they both taste great; but they are, after all, quite different. When I heard Ben Bernanke speaking at Harvard today, I screamed at my television, "That’s not even comparing apples to oranges; it is comparing apples to Aardvarks!"

At first I thought Ben was giving a pep talk in an unemployment office, but I was wrong. Helicopter-Ben was giving a "Class Day" address at his Alma Mater, Harvard. He spoke mostly about topics that are of interest to graduating seniors, but also spoke about what the economic picture was like when he graduated in 1975. He also went on to talk about the advances made in economic theory in the last 30 years, which should have included the incredibly "advanced theory" of not counting those prices that go up. However, he left out that part.

Anyhow, Helicopter-Ben was telling his audience that inflation, while rising, was nowhere near that of the 1970’s when he was a young sprite. He cited a few anecdotal stories of inflation in the 70’s and then basically said, "See, what we have no is nowhere near as bad as it was in the 1970's." And that is when I blew my stack!

"HOW DARE YOU COMPARE THE STATISTICS OF THE 1970'S TO TODAY’S MOLESTED GARBAGE-STATS!" When my shoe left my hand, I was glad I missed the television. "THAT'S LIKE COMPARING APPLES TO AARDVARKS YOU LYING *&$#!"

Mr. Bernanke did not tell the young'ins how the BLS and Fed (mainly Greenspan) rewrote history by changing the way the statistics are used. Bernanke didn’t tell the young’ins that when the price of a television went up 5% in 1975, government statisticians counted it; there wasn't a "heuristics" adjustment that forced the theoretical price right back down again. Bernanke didn’t tell the young'ins that when the price of a gasoline went up 5% in 1975, government statisticians counted it; they weren’t allowed to ignore it. And Bernanke didn’t tell the kids that when steak went up 15% per pound in 1975, government statisticians counted it that too; they did not "substitute" away the higher price like a Las Vegas magician making an elephant disappear.

If he had told the kids about these so-called miracle advances in economic theory, I wonder if any in attendance would have asked, "Is that "substitution miracle" you spoke of sort of like when dying Haitians substitute mud biscuits for food, and therefore they have learned these same economic advancements? They would have no inflation because the mud is free - right?" After the microphone squelches a little, the student continues, "Oh and when the price of food is so high that these people are dying, how do we compute for the "core value" of death? Thank you, I'll sit and wait for your preposterous answer."

Real Time Trading Signals*for

Trade Date: 6/4/08

E-Mini S&P Trades*
(before fees and commissions):
1) PP sell @ 8:50am at 1380.50 = +1.00 & b/e

2) VA sell @ 11:30am at 1388.00 = +1.50 & +4.00

3) TWO Engf trades were just missed by one tick that = big gainers.

4) Algorithm trades (4)...combined total...+9.25

E-Mini Russell Trades*
(before fees and commissions):


1) Sell @ 1:24pm at 745.0 = b/e (1 lot)



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