Looking at Paul Krugman's blog post about Oil Outlook reminds me about something I've been wanting to write about here for a while - most of the time I put these observations into The Analytics Guru - but my work is more widely read here than there (for now).

Part of me enjoys seeing the stock prices go down - at least, I understand what motivates that - the Sub Prime Mortgage Meltdown is in full swing and banks are writing off a lot of debt ( New York Times has two comprehensive articles on the current and future economic situation today Uncomfortable Answers to Questions on the Economy and Graphic on How Bad Could Things Get? that tell us most of the pain is ahead of us - and when I see the stock market go down - at least, the world seems to make sense - and I like reading Paul Krugman because he seems to understand the essence of the financial situation better than anyone - and I trust him and have been reading his OP-ED for several years –his estimation on Oil Prices is helpful in forecasting that the prices aren't going to meaningfully change - even if our demand for Oil goes down - which is must because the United States is running on Empty - we're running out of gas and we are running out of the ability to buy more - credit is tighter and tighter.

But then I see the Dow going up, as it did on Friday, and I wonder if anything in the Financial Sector really makes any sense, any longer - if it ever did - not that I'm a financial analyst (I'm not) - I'm a Web Analyst.

But why are stocks going up so much just because oil is 10 dollars cheaper today than yesterday (because we're broke and can't fly as much and or fill up our cars) - nothing much has fundamentally changed - we're still in an awful situation that's getting worse, and will continue to degrade.

So why does the market go up?   What is really mean to see a couple of hundred points more?  Nothing - it's meaningless - I've concluded.  

You can't judge the health of this economy by most of the stats that are currently be collected and shown us - that is what I fundamentally believe - we're looking for answers in the wrong place.

The answer is not in the Dow / S&P or anything else we see in papers - I'm not even sure what the metrics should be ….. but these aren't it.

Because the situation keeps getting worse and if you just looked at this chart - you'd see some confidence coming back - but it's all being driven by OIL PRICES.  Nothing has fundamentally changed ….. it's garbage info that leads to misleading conclusions useful if your into stocks, but not otherwise.

What the chart does tell - and knowing all of the change that happened this week was driven by lower consumption of OIL is that prices will drop for a short time, but not much and then any kind of conflagrations in the Mideast (I predicted an October Surprise (see Using Radian6 to predict the Presidential Election - Part 2) - I very much expect one to happen) and any kind of weather disruption or terrorist attack on a oil refinery will drive the prices right back up again, even worse than before.

The fact that OIL PRICES are driving the economy and not anything else, much - is the real story here - the world is addicted to OIL - we need it for everything - there's no way out - no stability that's possible, long term, because the price of OIL will change on any kind of news of a problem in the supply chain, and that can happen in several ways.

So I see no real confidence in the numbers … and no real story here - except we're on our way down, and we only think
it got better for a couple of days - till the next crisis drives prices even higher.

But here's how it ties into Web Analytics - I've noticed data I pull for my corporate work, at times, tell a very two dimensional story - one that often is not the story that should be told - but the metrics we are asked to pull (and I say .. all of us) are asked to pull - OFTEN DON'T TELL THE REAL STORY.

We need to come up with more stuff than Unique Visitors from Panel Data - or traffic volume data that is almost meaningless - just like this garbage stock data that is being fed us - it's meaningless - fundamentals haven't changed - the rise in the Dow just confirmed our addiction to OIL … it's actually worse - because now we realize just how dependent the world economy is on the price of OIL - and how easy it is disrupt it.

We should not be happy the Dow went up this week - we should be sad that the only thing driving anything up now is OIL PRICES declining - the rest of the economy is in the gutter - and going down fast.

What we need is New Metrics - that tell a better story - and lets face it - there's a bunch of good stuff our current metrics, both financial and web analytics don't catch at all.

We need to focus on that more - let the Dow go up or down - it means nothing if all that is driving it is OIL PRICES.

In fact, closing out this long post - when I worked at IBM.com, last year I was asked to provide metrics showing the success / or not, of the new website re-design.

It turned out, most of the effects were invisible - the metrics didn't even capture them - no hooks were put into the AJAX and FLASH in most cases and most of what we measured showed us that little had fundamentally changed.  

The lesson - similar to what I wrote  at TAG -

I think I just figured out where the Future of Marketing is going

is Metrics baked into the beginning of anything - we need to look for ways to hook up what is meaningful and measure that - not use some overblown statistic that is no longer that meaningful, like the Dow.

At least, that's my opinion - and I have to add, I'm not a Financial Analyst, I'm a Web Analyst.