Did Someone Just Leak The GDP Number? Of Course Not, But Goldman Has Some Things To Say About It
Jan Hatzius, who was recently rated "most accurate economist" for good reason, after exhibiting phenomenal precognitive abilities to revise payroll numbers within 24 hours of actual number release to within 0.0001% (roughly) of the actual final number, has just decided to become a shoe-in for the next year's award nomination by announcing that tomorrow's GDP number, to be released at 8:30 am and expected to be 3.0%, will now be 2.7%. Now, we tend to joke about leaks and such, especially when it comes to Goldman (one would think Goldman's PR department has their hands full as is), but if tomorrow's GDP really is a surprise miss, which this client note seems to indicate, things will get just plain silly.
From Goldman Sachs:
Solid Gains Under the Surface -- Q3 GDP Est Now 2.7% vs 3% Previously
BOTTOM LNIE: Headline gain is in line with consensus and below our figure, but with a composition less dependent on volatile components than some (including us) had expected. Bookings for capital goods recover almost all of past two months' setbacks. Shipments somewhat weaker, especially for nondefense capital goods, but they will eventually follow orders. Based on these data and other recent reports, we now estimate tomorrow's GDP to be +2.7% at an annual rate, versus +3.0% previously.....
3. The shipments of capital goods and total durable goods inventories are the last major piece of information feeding into tomorrow's preliminary report on GDP growth. Based on this information as well as other data released in the past couple of weeks -- including complete book value inventory data for August -- we now estimate that real GDP rose at a 2.7% annual rate, somewhat less than the 3% annual rate that we had previously thought. Final sales should actually be a bit firmer -- up about 2-1/2% versus a previous estimate of 2% -- but the contribution of inventories looks qutie a bit smaller.
With the market pricing an economy about 6 std devs above perfection, the last thing needed is for the economy to be even worse than fundamentals (do not) represent in silly 80x P/E multiples of stocks such as Amazon (for example).
(4 votes)
»
- Login or register to post comments
- Printer-friendly version
- Send to friend
on Wed, 10/28/2009 - 08:39
#112816
Just lowering expectations to get better than expected.
on Wed, 10/28/2009 - 09:41
#112900
did you read the part where they lowered employment numbers 24 hours before the numbers actually came out and were right on the money.
did you read about the "most accurate economist"?
this guy is something to behold.
he called for a 40% deline in the housing market 2 years ago.
on Wed, 10/28/2009 - 14:05
#113220
Agree 100%...
on Wed, 10/28/2009 - 08:40
#112818
Another bailout for GMAC and how our car "economy" is like our housing "economy" - just another Ponzi.
http://www.fundmymutualfund.com/2009/10/us-ponzi-scheme-economy-continue...
p.s. thanks for the heads up on GDP, 2.72092782718271% it is!
on Wed, 10/28/2009 - 08:56
#112836
If this actually turns out to be the infinite sum (n!)^-1 we will reach the ultimate hitchhiker's guide to the galaxy moment. Jacob Bernoulli would be so excited.
on Wed, 10/28/2009 - 09:07
#112850
LOL
Spot on old chap, spot on.
on Wed, 10/28/2009 - 09:50
#112913
If this actually turns out to be the infinite sum (n!)^-1 we will reach the ultimate hitchhiker's guide to the galaxy moment. Jacob Bernoulli would be so excited.
I have to concur,,, This is what I love so much about the folks at ZH. Bright, and funny, great combination in these times.
on Wed, 10/28/2009 - 10:22
#112945
I'm actually e^(3.73767) years old this year, so there is special irony for me on issues concerning life, the universe and everything.
on Wed, 10/28/2009 - 11:07
#112997
nice!
on Wed, 10/28/2009 - 08:44
#112822
This isn't about lowering expectations, I am sure that GDP won't beat 2.7%. It is about managing expectations so that when the number comes in the market will rally relentlessly on nothing similar to performance right after the jobs miss earlier in the month.
I think the more interesting question is what is the revised number, it will probably be worse than the initial headline number just like we get with initial jobless claims.
on Wed, 10/28/2009 - 14:13
#113230
Goldman's revision was nothing more than an utterly transparent signal - whether to their pals indicating it's time for a switch, or to the same chosen group that it's time for another thrilling round of "Bear Trap Fiesta" remains to be seen. Whatever the outcome, I still smell rotting fish, and I'm not sure why...
/yes I am.
on Wed, 10/28/2009 - 08:46
#112826
Headline gain is in line with consensus and below our figure, but with a composition less dependent on volatile components....
They must be talking about AMZN.
This type of shit would be funny if it wasn't such a sad attempt to manipulate markets, expectations and the public's sense of well being.
on Wed, 10/28/2009 - 08:49
#112828
This is a misdirection play to scatter the shorting herd and pick off the tired and weak bull. Like Robo's alligator.
GDP cannot be allowed to miss unless there is a signifigant upward revision for Q2 accompanying the report. It's in the playbook.
on Wed, 10/28/2009 - 09:52
#112915
My sense is that we will get a manufactured +3.0% GDP... then it will be revised down in future revisions.
If that isn't the case, I think the OK has been given to take the prop out of the markets for now.
on Wed, 10/28/2009 - 08:53
#112831
Government's contribution to GDP, composed of the myriad $8000 contributions to "houses for the under-employed" program as well as debt issuance to purchase MBS, will contribute 3.5% of the 2.7% GDP.
on Wed, 10/28/2009 - 08:54
#112834
It could be seasonal, but something's definitely up. The money supply, which has been held fairly constant the last 6 months or so, is being ramped up. TSLF auction amounts are being increased, and who knows what else is being done to increase liquidity.
on Wed, 10/28/2009 - 09:02
#112843
Tyler...is this quadruple double reverse pyschology or are we into the quintuple fractals yet?
on Wed, 10/28/2009 - 09:10
#112851
None of this crap is working anymore anyway. I have to believe the boyz are already loaded short and ready to take 'er down.
on Wed, 10/28/2009 - 09:15
#112857
Wait for the extension of the homebuyer tax credit, when that fails, they'll take another crack at the slam-the-dollar-to-make-the-market-rise strategy. When that's doesn't get the American public to hawk their last scrap of gold in order to buy the market, then watch for a war.
Short of that all is normal.
on Wed, 10/28/2009 - 10:28
#112951
I think the war is already happening, they are just trying to get us to notice it.
I love how the captcha gives you an easier question if you miss the first one.
on Wed, 10/28/2009 - 10:35
#112957
I think the war is already happening, they are just trying to get us to notice it.
on Wed, 10/28/2009 - 11:13
#113003
We're currently at war, in at least three countries, maybe more.
on Wed, 10/28/2009 - 14:17
#113234
This X 1,000,000,000+
most definitely. if I had the means, I sure as shiat would be too, instead of my piddly bag o'pauper baubles (that the HFTs keep skimming off of). (Sigh) Oh well, there's always the class action lawsuits against JP / GS etc. to look forward to, right? ;)
crystal balls....
on Wed, 10/28/2009 - 09:16
#112858
http://finance.yahoo.com/news/New-home-sales-fall-36-apf-2092653495.html?x=0&sec=topStories&pos=1&asset=&ccode=
"New home sales fall 3.6 percent"
"... The Commerce Department says sales fell 3.6 percent to a seasonally adjusted annual rate of 402,000 from a downwardly revised 417,000 in August. Economists surveyed by Thomson Reuters had expected a pace of 440,000."
on Wed, 10/28/2009 - 16:07
#113389
bygones
on Wed, 10/28/2009 - 09:20
#112863
They don't make analyzing the data easy. I had to type the figures I wanted into excel manually. But it was worth it. The most bullish case I hear for a 3% GDP number is on inventory improvements. Of course first derivative (just % change) measures are still all down. But even the second derivative improvements in Q3 have been less than in Q2.
You would need September inventories to be up MoM over 10% just to get second derivate improvements in Q3 on par with Q2. Of the top of my head I remember second derivative inventory improvements added about $47 billion to GDP in Q2, so extrapolate from there.
http://www.census.gov/mtis/www/data/text/mtis-inventory.txt
on Wed, 10/28/2009 - 10:47
#112972
SNR on second order data makes it pretty tough to depend on, but 10%, holy crap.
on Wed, 10/28/2009 - 16:09
#113392
WHAT?? All this shit is already in the prices look ahead!
on Wed, 10/28/2009 - 09:24
#112869
For the past half year, when estimates raised, market bolts much higher, when estimates lowered, market bruised 20 bps. But I guess when it turns out to beat the previous day lowered estimates, market will shoot up again....I guess it makes perfect sense in this perfect world.
on Wed, 10/28/2009 - 09:24
#112870
Govt will report what ever # is needed to keep the market up.. by hook or by crook
on Wed, 10/28/2009 - 10:00
#112922
Just seems to me that the GDP outlook is high..
http://www.shadowstats.com/alternate_data
on Wed, 10/28/2009 - 09:43
#112903
Their guess is as good as anybody's.
Heck, look at how China puts out GDP numbers that cannot be verified.
Growth in the US economy under the current conditions?
Must be that every American gets their house stuffed with i-toys to achieve any form of growth.
Make it a program, "no American left behind, free i-toys for all"
Thanks for the nice and easy Captcha this morning. Couldn't handle much more whilst trying to map out the next months of a down trend. What to put and what to short?
on Wed, 10/28/2009 - 09:56
#112917
hmmm...2.7% - 3% of GDP due to Stimulus...leaves -0.3% shrinkage
on Wed, 10/28/2009 - 11:59
#113050
and just +3% for home sales for all tax credits and stimulus.
on Wed, 10/28/2009 - 10:03
#112926
The earlier estimate was far too optimistic, but then that was during the "buy equities" part of the month. The updated number seems more reasonable (though frankly, if you really believe any of it, that's your choice), but then we are in the "buy Treasuries" week.
on Wed, 10/28/2009 - 10:17
#112942
This is all 23.7 Trillion in government expenditure and guarantee could produce?
on Wed, 10/28/2009 - 10:36
#112958
You guys are all just jealous that GS is so much better than everybody else in their predictions. Like $200 a barrel oil in December 2008.
on Wed, 10/28/2009 - 11:03
#112992
And Abby Joseph Cohen is still banking on Dow 30,000.
on Wed, 10/28/2009 - 16:11
#113397
Guy with a memory, I though Abbey offed herself. 30,000 seems good, 6,000 is right on
on Wed, 10/28/2009 - 10:46
#112971
Makes total sense cuz UK missed their giddy estimates too. For GS, they would probably say they are looking at a simular data collection process as the govt.....but OMG if they are just being spoonfed the data from US Govt it just kinda makes me feel sick....
on Wed, 10/28/2009 - 10:50
#112978
How about this??? Goldman gets a call from the white house and says...we really need a big time up day in the markets ahead of the local elections on Tuesday. how about lowering the GDP forecast a few ticks? You can watch the marekt trade down and buy ahead of it.
Then when the number comes in at 3.5% (THAT IS WHAT IS BAKED INTO THE MARKET) and it is a blow out number.......you can reap all kinds of silly profits.
See, we all can get along.....
on Wed, 10/28/2009 - 10:52
#112982
You assuming he is being tipped off, rather than writing it realtime.
on Wed, 10/28/2009 - 11:01
#112990
why the hell did they report their analysis one day ahead of the official report? They are either bragging about their accuracy or they just want to tell everyone to go ferk yourself cuz they got that report one day early. The way they do things these days reflect that they don't give a fat ferk what everyone thinks, cuz they made all the investments (all the people they install in all the governments) that are paying off.
on Wed, 10/28/2009 - 13:06
#113141
Deflationary point of view - Long Wave Group analysis for download available here: http://www.pro-investory.cz/forum/posts/hrozi_propad_trhu/analyza_long_wave_group/strana/1/#pid571
on Wed, 10/28/2009 - 15:05
#113277
Funny how extremists can blow up abortion clinics for killing a gooey embryo yet GS gets a free ride to killing peoples hard earned savings.
Someone take control dammit !
on Wed, 10/28/2009 - 15:09
#113289
This is getting old. They are coming out with numbers of their own a day or two in advance of the actual numbers reported. They have a good name for predictions and that is why they can influence the markets. But it also allows them to change the timing of when news is released which does have an influence into trading accounts and their positions.
time123
P.S. I get my timing signals at http://invetrics.com
on Wed, 10/28/2009 - 15:35
#113341
Read:
The Sum of Our Discontent: How Numbers Make Us Irrational
by David Boyle
It's all Frederick Taylor's fault.
on Tue, 11/24/2009 - 09:14
#140428
The bulls aka wall street, need an economist to offset the bearish forecast of meridith Whitney. First they get credibility, then they move markets.
on Tue, 11/24/2009 - 10:14
#140473
Am I missing something? How come no one has referenced the following ZH post: http://www.zerohedge.com/article/flash-traffic-gdp-35
Notably, CD (#114001) says,
"That's pretty much what I'm saying -- though it would be delicious irony if both were true -- that the ACTUAL growth numbers are, in fact, a lot closer to 2.7% (if you take out whatever accounting mojo was put into play to get 3.5) and may later be revised down. While of course the prop desk has used the selloff of the last week to build their positions. So GS is better at data analysis (longer term reputational gain) AND they get to enhance the echo of the GDP beat to optimize profits (immediate payout) -- I can hear the diabolical laughter above the din of clinking champagne flutes going on right now..."