A Bad Dream

On a quiet Saturday afternoon I was doing some paperwork while alternating between The Masters and the White Sox/Twins game.  At one point it got really tricky since Stuart Appleby, for the second week in a row, used that word that is Australian for "That was a really bad shot!"  Just as Appleby was heading for a triple-bogey, the Sox had the bases loaded with Crede at the plate.  He popped up and Appleby three-putted.

It was time for a little nap…..

I am picking up the Trib and reading the account of the game.  The line score is as follows:

Minnesota 0 0 0 0 0 0 0 0 0 0 3 1
Chi. White Sox « 1 0 0 0 0 0 0 2 x 3 8 0

That seemed OK — a solid win — but then I turned to the story, written by Alan Abelson and Barry Ritholtz.

The White Sox escaped with a narrow win today at "The Cell" but fans should not read too much into this result.  The Sox put up an anemic 3-run scoring effort.  That will not win many games in a league that has a designated hitter.  Turning to our knowledgeable data analysts from the Liscio Report (moving in on the territory formerly held by Stats Inc.) we can see that production from the heart of the order, slots 3 through 8 was terrible!  Those hitters had only two hits in 22 plate appearances.  The Southsiders cannot possibly win that way.  The run production relied upon bunting and base-running by Posednik and a throwing error by the normally solid Twins.  Don’t expect this kind of scoring again.  With the big boppers not connecting, it is only a matter of time before the Sox fade.

Chicago White Sox
Scott Podsednik, LF 4 1 2 0 0 1 1 .364
Darin Erstad, CF 3 1 2 0 0 0 1 .385
Jim Thome, DH 2 0 0 0 2 0 2 .143
    Pablo Ozuna, PR-DH 0 0 0 0 0 0 0 .333
Paul Konerko, 1B 4 0 2 1 0 0 2 .286
Jermaine Dye, RF 2 0 0 0 1 0 1 .154
Joe Crede, 3B 4 0 0 0 0 0 4 .214
A.J. Pierzynski, C 4 0 0 0 0 0 4 .143
Tadahito Iguchi, 2B 3 0 0 0 0 0 0 .167
Juan Uribe, SS 3 1 2 1 0 0 0 .333
Totals 29 3 8 2 3 1    

As to the pitching, it might seem like the Sox did well to shut out the powerful Twins. 

Chicago White Sox
Javier Vazquez (W,1-0) 6.2 1 0 0 4 5 0   0.00
Andrew Sisco (H,2) 0.2 0 0 0 0 1 0   3.00
Mike MacDougal (H,2) 0.1 1 0 0 0 0 0   3.86
Matt Thornton (H,1) 0.1 0 0 0 0 1 0 13.50
Bobby Jenks (S,1) 1 1 0 0 0 2 0   0.00

Astute readers will note that Vazquez only had a SO/BB ratio of 5-4, hardly a high domination factor.  It took the Sox four more pitchers to finish the game after Vazquez had to be pulled.  Vazquez lucked out when a Twins player made an uncharacteristic mental error with the bases loaded, getting doubled off of third base.

Closer Jenks got a cheap save with a three-run lead and actually allowed a hit in the final inning.

But the real story was the weather.  The Twins, a dome team, were not accustomed to the cold.  Everyone agreed that it was one of the coldest games they had every played, searching their memories for any comparison.  Had it not been for the weather, this game would have been very different.

Sox fans should not be hopeful about a repeat of the 2005 World Championship season.  We have shown in our past articles that this accomplishment did not match the standard Series Victories by great teams, and therefore should be disregarded.

Furthermore, today’s win is likely to give the team a sense of overconfidence leading to poor performance in the future.

And then I awakened, and realized that this was all a bad dream.  The story had been written by a couple of Yankee fans!  It was just like the standard stuff they write about the monthly employment report.  If the number is bad, it stands as reported.  If it seems to be OK, it is time to look at the "internals" to find something that seems out of line.  And worst of all, since the Fed and their 350 economists are too stupid to see the truth, they will look at the erroneous data and make the wrong decisions about interest rates.

A bad number is bad — and so is a good number.

This morning’s WSJ provided an analysis by David Malpass, who has had a stellar multi-year record both predicting and explaining the economy. 

Friday’s solid report of the March labor environment showed more
Americans working more hours at higher wages than ever before.
Unemployment fell to 4.4%, instead of rising as many expected. The
average hourly wage rose to $17.22. The strong jobs report, along with
the January-February surge in spending, personal income and core
inflation points to sturdy growth and an inflation problem — not the
recession and interest-rate cuts many predicted in early March.

Despite his performance and a superior grasp of the data underlying the economy, Malpass is accused of looking only at "recent" data.

Investors (and sports fans) should look carefully to find the real experts when making their decisions.

Reader Challenge:  Find and report the last time that Abelson or Ritholtz took an employment report that seemed "weak" on the surface, but explored the internals to show hidden strength.

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  • Steve April 9, 2007  

    A classic post!

  • Barry Ritholtz April 10, 2007  

    Frightfully amusing!
    Now, remind me of the last time there an employment report that seemed “weak” on the surface, but explored the internals to show hidden strength?

  • Barry Ritholtz April 10, 2007  

    This is the closest I could find, from March 2002:
    Six months later: A real recovery

  • Nova Law April 10, 2007  

    This post was simply brilliant.

  • Shrek April 11, 2007  

    This blog has a secret crush on David Malpass.

  • Jeff April 11, 2007  

    Thanks to Barry for stopping by with his comment. He is a good sport about our efforts at humor. I am sure that readers will check out his links and form their own conclusions.
    I’m glad that some appreciate our attempt at humor. We can all have some fun as we are trying to get it right.
    Shrek thinks we are perma-bulls who love Malpass.
    I invite Shrek (or other readers) to come up with someone who has had a better read on what is happening with the economy over the last several years.
    I happen not to share many of David Malpass’s political views, but this is not about politics. I frequently do not share his market views, but I do not look to him for a market recommendation.
    He has been very good on the economic fundamentals, and explains key points in a very clear fashion. Those of us who want the best economic advice should at least pay some attention.
    I believe that his work has not gotten sufficient recognition, and I hope that readers here have this exposure.
    Most of what I cite from Malpass relates to key economic concepts that are frequently misunderstood or applied incorrectly by non-economists. It is an opportunity to learn something.
    Thanks to all for their comments.

  • Shrek April 12, 2007  

    I like your blog and respect your opinions even if I think you are overly bullish.

  • Shrek April 12, 2007  

    I like your blog and respect your opinions even if I think you are overly bullish.
    FYI- Notice you live in Naperville. I went to Benet.

  • Jeff April 12, 2007  

    Thanks, Shrek.
    Benet is a great school. Feel free to stop in and say ‘hello’ if you are ever back in town for a visit.

  • muckdog April 15, 2007  

    Nice post, Jeff. And the Twins are a good team considering their low salary. Definitely they’re not participating in the wage increases affecting higher cash market teams!
    But do you personally know of a lot of folks who are unemployed? I’m in the technology industry and while there was some bad times in 2000-2, we’re being chased right now with mo’ money.
    In addition, friends in sales, marketing, operations, etc. are all busy with tons of work. I’m just not seeing a gloomy job economy out there. At least, not in Sacramento! (But folks are gloomy about the Sacramento Kings…)

  • Jeff April 15, 2007  

    Thanks for your comment. The Twins continue to be a tough rival for my Sox. As you observe, they continue to produce strong teams in a small market without competing on salary. Do they follow “Moneyball” principles?
    As to the anecdotal evidence on employment, my experience is that professional workers are very busy. In addition, a small startup where I am on the board has been aggressively adding PhD’s in engineering, software development, and specific scientific fields. Others have developed successful consultancies.
    None of this action is captured in the regular payroll employment report. This is the reason for the much-maligned birth/death model of the BLS — their best effort at estimating growth in companies that were not in the sample at the start of the year.
    This topic is probably worth a longer post.
    Thanks again,