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Deutsche Bank's Permaclown Economist Revises His Q2 GDP From 2.4% to 1.0%
Some stunning bearish commentary from the staple CNBC goto analyst (Joe Lavorgna as if the clarification is needed) when worthless permabullish commentary is required. "We expect Q2 real GDP growth to be revised down sharply from +2.4% to +1.0% because of lower inventories (-$25B) and construction (-$4B) as well as a larger trade deficit (+$15B)." In other news, Zero Hedge still calls, and has for about 4 weeks now, a final Q2 GDP of under 1%, and under -3% when the impacts of the stimulus are excluded.
Commentary for Wednesday: The most recent economic data have turned over and we doubt the next batch of data is going to provide weary financial markets with much respite from weak numbers. Existing home sales fell -27.2% in July to 3.83M units, the lowest level since 1995. This collapse in sales, which partly reflects payback from the expiration of the homebuyers’ tax credit and partly the result of a tepid labor market, pushed the months’ supply of homes for sale up to 12.5 months; this compares to 8.9 previously. In terms of regions, all four areas of the country were down well over 20% in the month. The only positive in the report was news that median home prices remain in positive territory, as measured on a year-over-year basis (+0.7%). Of course, if sales do not improve, then rising inventories could then weigh on home prices going forward. Whether this happens will largely be a function of the labor market and whether it can continue to mend. Fortunately, housing affordability remains near an all-time record high, and the recent decline in interest rates, at the margin, should help. However, we really need to see the labor market improve but at the moment, we believe the best we can hope for is private sector job gains around 75k, which is what we are projecting for August private payrolls, released next Friday.
While the correlation between monthly percent changes in existing home sales and new home sales has averaged just 0.09 over the past five years, we expect new home sales to remain depressed, owing to the same factors that are afflicting the housing sector, namely a hangover from the homebuyers’ tax credit and the soft labor market. On the surface, this morning’s durable goods orders should look good. They are an important series because they provide us with a read on capital spending which has been an economic bright spot. July durable goods orders are projected to be up 3.0% on the back of rising aircraft orders, but excluding transportation, orders are likely to be unchanged. (We had been looking for a 1.0% increase but cut our estimate.) Nondefense capital goods orders, which we consider to be the core of the report, rose 0.2% in June after a huge
4.8% increase in May. We expect this series to be flat as well.
Regarding the rest of the week, we expect tomorrow’s jobless claims for the week ending August 14 to edge up further, from 500k to 510k. We believe these numbers are being inflated by the layoff of Census workers. On Friday we get Q2 GDP revisions, the final August reading on consumer sentiment and a speech by Mr. Bernanke on the economic outlook. We expect Q2 real GDP growth to be revised down sharply from +2.4% to +1.0% because of lower inventories (-$25B) and construction (-$4B) as well as a larger trade deficit (+$15B). We expect the final print on consumer sentiment to be revised down to 69.0 from 69.6.
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The guy has been wrong forever. Same for the Morgan Stanley guy. No other business would guys who have been so wrong get compensated so well. Think about it, Morgan Stanley's 10 yr call is off by 300 basis points - about 35% loss vs expectations. NIce
But I do love linking dumb-ass Seattle Times posters to ZH. Spread the word people. ( no, I won't do the bitchez deal. That is getting kinda worn.)
Mostly they go all nut krazy, I love Paul (whisper sweet nothings in my ear) Krugman Roofie. Reality is not of much interest to those focused on a 'radical transformation'
Don't they get it?
Just because they showed up late to the party doesn't mean that the crowds failed to get shit rolling.
Outa touch. A.Y.F.K.ME?
Yet oddly as of this morning their year end S&P target still 1375.
High on the street.
LMAO.
Wow, then that's going to make for one rockin' December.
when, when are guys like this going to be called out?
I AGREE...THIS GUY IS A HUGE CLOWN..PATHETHIC. HE SHOULD LOSE HIS JOB!!!! who does he blow to keep his job?? i'm serious.
All the CIA agents that work for the bank and try to make his predictions come true.
Until they get embroiled in a spying scandal.
http://en.wikipedia.org/wiki/Deutsche_Bank
Permabullish Permaclown - LOL!
I would add "Permatool".
Hey Realtick! are you out there?
Its DOW 10,000 how is your long IBM position working out for you?
by Hedge Jobson Fri, 08/06/2010 - 22:44
#506794
right shoulder at 10700, go short here
by realtick
on Fri, 08/06/2010 - 22:46
#506804
Breaking out of bottoming pattern - trend is up, correction over
http://i35.tinypic.com/ztjgnt.jpg
by Hedge Jobs
on Fri, 08/06/2010 - 22:49
#506814
you can by my shorts realtick, good luck!
by realtick
on Fri, 08/06/2010 - 22:59
#506847
Trying shorting this one.
http://www.barchart.com/charts/stocks/IBM
New high for IBM imminent - the labor forces' loss is their gain (automation, outsourcing,etc.)
by Hedge Jobs
on Fri, 08/06/2010 - 23:02
#506865
great! well you go ahead and fill you boots on IBM. ill see you at DOW 10,000 in a few weeks.
that way if it comes in at 1.1% he can scream buy buy buy
This is the same guy who said there was no recession, when it was 8 months old and said it was over, when it had 4 months to go.
I give better forecasts blind stinking drunk passed out on the floor of a bar.
Nothing is over, nothing! You just don't turn it off!
http://www.youtube.com/watch?v=71vqGyWTs3c&
He's still calling for positive private sector job growth? Never mentions the Birth/Death model. He kept calling for a 250k print, "any day now".
The MS guy says we won't have a double dip because "the cyclical sectors are already in the basement". Huh? Doesn't that mean we are still in the recession. Oh, the tortured logic of the flailing. http://www.cnbc.com/id/38831278
Ironically, Bubbles' (from "The Wire") business model might outperform most in the years to come.
Clowns on parade!
http://www.nowpublic.com/tech-biz/nationalization-u-s-banks-imminent
http://www.chicagotribune.com/entertainment/chi-090217-bozo-photogallery...
Poor Joe, he's only wrong slighty more often than the other econs, but Larry likes him so he gets the DB name out there... ironic because Larry was the last big Street econ to be fired...
You know who is smart is that fat chick that recently left the Obama admin.. ya, get the hell out big dudette before we hit an ice berg...
...then there is the econ master dingbat of all time, Keith Hennessey (not even an econ), who ran Bush's econ team in the last few years. His appearance as a Squawk in the Spring of 2008 should be a made into a comedy.... I've noticed that Joe Kernan has not had him back on, er, recently.... (Hey, the only reason I watch a few minutes of the show is because Becky gives me a reason to live, OK, that allright with you ?)
Joe Bologna of Douche Bank. Abby Blowhard Cohen of Goldman Suchs. Blob Droll of Bank of Amerill Lynchmob. All FOS (full of shite), but my favorite myopic cheerclown has to be James "beaver hat" Altucher.
Off topic and didn't know were to post it so I did it here. Did you see the election results? The conservative Tea Party voters and others went with the un-monied underdogs? This is a real problem for the democrats. By and large the democratic strategy was that the Republicans would nominate radicals that the democrat party hacks could defeat in the general election. Didn't happen. The democrats definitely lose control of the house. Sorry Nancy but that's what you get for alligning you fortunes to the jug eared perfedious bastard we call Mr. President.
GDP growth +1 %. Let me think about how much revenue S&P 500 companies are generating outside the US of A :
International revenues/foreign sales of S&P 500 companies as part of overall sales : 44.9 %.
Basically, I would like to know why you discuss ONLY the US economy. In which context does this make sense in a global environment ?
its the worlds largest economy Mr T. its very relevant. unless of course you beleive in fairy tales like decoupling and all that
Joe who? I thought that was Michael Keaton on CNBC.
That tiny little clown is as crooked as dog's hind leg. He lies so much I am surprised he doesn't work for the government.
Lavorgna previously had it at 4%...But, don't worry--the PPT will keep the party going. Then they'll tell us the -3% print was "all priced in"!
>Joe Lavorgna as if the clarification is needed
Clarification is definately needed.
The first clown that came up to my mind that works for Deutsche was Ryouji Musha,
who missed the subprime despite working for Deutsche.(Tokyo branch)
I wonder how many clowns Deutsche employs across the world.
Tyler, have you seen the GDP charts on consumerindexes.com ? Shows GDP growth of -5.3% when you compare the last 90 days to the same period 1 year ago.....yowwwsa! I am predicting our economy goes to a -15% GDP or lower. Scary bad. Be ready.
Thanks for such a great post and the review, I am totally impressed! Keep stuff like this coming!...
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