Charting The Roundtrip In Q1 GDP Forecasts
Remember when back on December 1, Goldman's Jan Hatzius issued its "revolutionary" bullish economy report which contained the following line "This outlook represents a fundamental shift in the thinking that has governed our forecast for at least the last five years" (and which was appropriately ridiculed by ZH :"This is unfortunate. Jan Hatzius used to have credibility"), starting a frenzy across Wall Street when one after another the econolemmings confirmed that bubble mania is alive and well, desperate to hike their own irrelevant GDP numbers as quickly as possible? After all Goldman had just given them the green light to do so. That the hike was based on something as transitory as a payroll tax fiscal stimulus and an ongoing (and allegedly soon ending) monetary stimulus in the form of QE2 was irrelevant: the Russell 2000 was up, meaning the economy was improving. Well, Jan redeemed himself realizing once again first, ahead of the crowd of idiots, that everything is about to go to hell, by downgrading Q1 GDP ahead of everyone else (naturally to be followed by the stampeding herd of lemmings - here's looking at you Joe LaVorgna and whoever the Barclays economist is, if they can even afford one - once again). But anyway since the first sentence was a question, if the answer is no, below we recreate the history of Q1 GDP forecasts by Wall Street's intellectual brigade. We will not point out the roundtrip, or put into question the relevance of the "economist" occupation on Wall Street. It is rather self-explanatory.
In the meantime, here is what Q2 GDP predictions look like. In good old "he who defects first" fashion, we predict that it will be Goldman once again to be the first desk to downgrade both Q2, H2, and FYE GDP, to be promptly followed by David Kostin cutting his S&P 2011 forecast from 1,500 to 1,300. After all the time to set the stage for QE3 is fast approaching and who better to load up on commodities in advance than the world' second largest hedge fund (the largest of course being the Federal Reserve).
And you thought only dot com projections had hockey sticks in them...