I find it difficult to believe that so many scientists have seemingly accepted the realclimate argument that Preisendorfer’s Rule N applied to a principal components calculation is somehow a substitute for proper statistical analysis. To show the goofiness of this argument, I asked a friend to compile a list of weekly closing prices for 20 tech stocks in the bull market. Of these, there were 15 stocks with at least 581 values. I then substituted 15 tech stock prices for 15 bristlecone pines in the NOAMER tree ring index. The results are pretty funny.
Figure 1 shows the first 4 PCs using the MBH98 principal components method. The PC1 has an obvious hockey stick shape. It is comprised almost entirely of tech stock prices. It is even more strongly correlated to the "climate field" than the PC1 with bristlecone pines in it. I’ve not carried through a full emulation yet, but I’m pretty sure that it will yield a MBH98-type hockeystick in the full emulation as well. The PC1 is "significant" under the Preisendorfer Rule N, which Mann et al. reported in December 2004 to have been used in tree ring networks, but obviously weekly tech stock prices are not a "proxy" for 1400-1980 temperature.
Figure 2 shows the first 4 PCs under a centered PC calculation. In this calculation, the PC1 looks pretty much like the PC1 in the NOAMER AD1400 network (and like the PC4) in the "NOAMER plus tech" network. Here the tech stocks affect the PC3 and impart a hockey stick shape to the PC3. There’s an uncanny parallel to the bristlecones being demoted in a centered calculation. I haven’t done the Preisendorfer calculation yet, but the PC3 (dominated by tech stocks) will almost certainly be "significant" under Preisendorfer.
If the example seems ridiculous, it is less ridiculous than the Preisendorfer argument, which is now the sole thread which Mann, Gavin Schmidt, Caspar Amman etc. are relying on.