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GDP +3.5% (v. 3.2% / Previous -0.7%)
Initial claims: 530,000...
Futures markets: "Ho hum."
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I wrote yesterday:
I bet my breasts that these Goldman Criminals, downgraded the GDP estimate to more than it was supposed to be because:
1) They know that it will come on higher than 3%, but they can't hit this one like they did with the unemployment number, because they will have more heat on their asses from people questioning how do they have the numbers in advance.
2) The move was perfect, for once they are going to look like dumbs when the GDP comes higher than 3%.... but this was precisely what they want people to think at this point, it helps to remove a little bit of heat from their asses and second, at the end of today's market they position themselves for the upside that we will have after this numbers come tomorrow.
These guys are real criminals. They should be banned from trading. Why are they allowed to trade and give guidance on the stuff that they are trading, if they are one of the biggest market makers out there. I am quite sure that there is a place in Hell for all of them!!!
The "best and the brightest" this sounds so stupid!!!!!! Of course you are going to look good playing Monopoly if you are the bank, you can print as much money as you need and you know the number that is going to come in the dice after the other players roll.
You have to be really smart to win the game playing like that! (And they almost lost the game and everything last year... )
Please, just imagine: Guy Adami, Jim Cramer, Erin Burnett and Trish "Bambi Brain" Regan are ex Goldman Sacks....
chapeau Pamela....but it will (hopefully) the reverse of what we had seen beginning of this month...
If they are right on, its a conspiracy...if they are way off, its a conspiracy...
I am as big a conspiracy therorist as the next guy and I truly believe that GS is the blood sucking squid as per Taibi, but thr idea that they purposely got it wrong just to throw people off the scent of guilt is the most rediculous idea I have ever heard. It is as stupid a thoery as when my 6yr old boy tells me hea meant to loose when he looses a game just to protect his pride. I guess you also suspect that the Yankees threw the game last night b/c they didn't want everyone to continue to think that they are the better team. Grow up and stop being so narrow minded.
You may want to read the original article and line of thought before you go all critizin' a brilliant catch. Then again, what do I care if you don't see the man behind the curtain - more fodder.
Pamela - thanks for the lifesaver (pun intended) This is exactly why I read ZH.
There is wide agreement that the GDP number hold water like a collender, but on the subject of the GS conspiracy to throw people off the scent? I am as big a conspiracy theorist as the next guy and I firmly distrust Govt Sachs as the life sucking squid that it is. But grow up already, you are starting to sound like my 6yr old who claims that he meant to loose when he looses. I guess you also think the Yankees threw the game last night on purpose to take the world off the scent that they are the better team. This board (which I love) will loose credibility when it (not just questions) but assumes conspiracy in EVERYTHING that it sees. You must remain objective (fair and balanced if you will) don't become the extreme opposite of CNBC and other media outlets that propegate only one side of the story, we are better than that.
brought to you by the zero hedge den mother.
Dude, fair points, but please look at loose vs. lose. Once is a typo, but...
At the same time, there could always have been flies in GS's otherwise perfect ointment. Maybe some rogue ZH reader inside the USG wanted to gum up their works a little. In general, I agree that at the very least, the intent of the lower estimate was to increase the optics on the actual number announced (regardless of whether they knew it exactly in advance) b/c it happens to suit their current holding/trade mix to do so. Nothing unexpected/unusually sinister in this case.
Touche' on the spelling, very heavy right ring finger when typing I guess.
If you were to proposed that the left side of the Chinese wall at GS was merely trying to clear the mkt out for a prop trade gift wrapped to the right side of the wall, that I could believe. More innocuously though, i think they were merely trying to show that their analysis was far more granular and as such better, however they got it wrong, it happens (sometimes innocently).
Let's wait a few months and a few revisions before we call 2.7% wong. Something tells me 3.5% will be revised down like just about every other GDP number for the past 20 years.
I only half agree, because I do assign a lot of value to the significant size of the crutch that was put under this economy by the govt. The porblem is that when it is time to hand it off back to the consumer, no one will answer the call. The fact that it appears stronger now, will only make the 2Q2010 fall look more pronounced.
I agree, the central question is will the real economy show up when the government stops or slows its increased spending.
IMHO the answer is no.
There is simply little to no dry kindling left to get the fire going. Every recession recovers based upon the idea of pent up demand. The steady lowering of interest rates and easy credit over the past 20 years, and particularly the last 10 years, has pulled forward so much demand that it is now a matter of exhaustion.
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...
Lest we forget, I have duly informed the Fed that today will be the last OMO for Treasuries. Hopefully forever.
I was wondering why the ferk they called that number one day ahead, and they may game the system. Now that makes a lot of sense.
WTF? they are the system.
Bet your breasts??!!??
Big deal.
You've got plenty more breasts where those came from.
the downgrade yesterday got them a better price for today. And yes they are on a mission to reverse the negative public opinion trend. After this whiff, We're all supposed to think that they play on the same playing field that the rest of us do.
Here's the message being portrayed:
POOR GOLDMAN, THEY'RE JUST YOUR RUN OF THE MILL INVESTMENT BANK/HEDGE FUND. NO CONNECTIONS, NO CONTROL OVER THE MARKETS. JUST OF BUNCH OF GUYS AND GALS TRYING TO SCRATCH OUT A LIVING.
LMAO
This shit gets better and better every week. There was an uptick overnight in the futures. I wonder who might have been behind that?
Here is the crux, IMO, of what you say, Pamela: “These guys are real criminals. They should be banned from trading. Why are they allowed to trade and give guidance on the stuff that they are trading, if they are one of the biggest market makers out there… “
This is a form of legal plunder as defined by the famous French economist Frederic Bastiat: “It is impossible to introduce into society a greater change and a greater evil than this: the conversion of the law into an instrument of plunder.”
Writes Bastiat: “…many persons have erroneously held that things are ‘just’ because law makes them so. Thus, in order to make plunder appear just and sacred to many consciences, it is only necessary for the law to decree and sanction it.”
Bastiat is talking about law backed by miltary power. The regulations under which the NYSE operates are regulations that have the backing of law backed by military power. If you violate them they can put you in jail. If you fight them to stay out of jail, they can shoot you.
The owners of the financial system are making the rules, i.e., the law. As you say, Pamela, “you are going to look good playing Monopoly if you are the bank, you can print as much money as you need and you know the number that is going to come in the dice after the other players roll.”
The question is, why would anyone not on their team want to get in a game with them?
Agree with the "legal" plunder is the best way long-term to bleed and rip-off a people.
I believe in democracy and the rule of law, as it seems better than any of the alternatives, but keep in mind, in the US democracy, slavery was legal, and if you were a slave, running away was illegal, and helping someone escaped from slavery was illegal.
We now argue about whether water-boarding is torture or legal, which I think is great, as I believe we should not torture, but keep in mind there was a time that woman and children had to appeal to animal curely laws to claim legal protections from men abusing them, that animals had, but they did not, because they were property. And God only knows what types of horror and torture slaves were subject to and generally it was all legal.
Justice is not simply assured by a democratic legal syste, but is ensured by vigilant people that carry in their hearts the concept that every person deserves due process and fair treatment and that no one is above the rule of law People must know attempted corruption will always be on the make in any system, and thus, no one should be blindly trusted to be good, all should be watched, all should have checks and balance.
they got it wrong so they could make money on the bounce, they made a bearish call just when bears were starting to come out of hibernation....so they knew there would be whip saw when number better than expected....
"it helps to remove a little bit of heat from their asses"
Speaking of which, has anyone ever noticed how Paulson and Geithner wear dorky digital watches to perpetuate that "nerdy" "best and brightest" image? That is not unintentional folks. If they wore Rolex's and gold cufflinks, then it would be too obvious. They are nothing but EVIL CROOKS!!!!!
creative accounting...maybe little bounce today and tomorrow, but where's the good news next?
A slaughter in the making?
...only for shorts. Nicely manufactured short squeeze coming today.
one only gets slaughtered if one bets too much. IMO still short for a swing trade. But the shorts will get squeezed for a few days.
Boom, headshot!
Up legs in markets do not end on bad news. They roll over on good news.
Pretend GDP is pretend.
obvious fact is obvious.
Obviousman
Cog, Spot on. This is an expansion of GOV Spending NOT Private Sector growth. A pop with the CFC program...next month ought to be fascinating.
-Michael
I laughed so loudly when I saw the number that it scared the life out of my assistant. And magic elves did most of the buying.
Under the hood, this number is NOT that good at all!
Cognitive D - Thanks for that reminder. I need a shot of optimism this morning.
Don't you mean a "shot of pessimism"?
Cash for Clunkers +1%
Government +0.5%
Homebuyer Credit +0.5%
good stuff all...the definition of sustainable recovery
exactly
if we look at this numbers vs the pickup in .gov spending in the last quarter is there really growth?
To be really crude here, while a woody may be a woody, for some of us old farts, without Viagra, there ain't no woody.
Could our "economy" as measured by government calculated GDP be experiencing a similar woody?
Nice analogy, it really captures the essence of these GDP numbers. I'm not pessimist, but know what a rat smells like even when it's doused in perfume...
Double green shoots !
I think inventories added 1% to the number.
Cash for Clunkers at work: "Motor vehicle output added 1.66 percentage points to the third-quarter change in real GDP after adding 0.19 percentage point to the second-quarter change."
all the while edmunds.com reports that cash for clunkers likely only added 125k new car sales, while all the others have just been rolled up purchases in the near term. at the cost of 24k/car to give 4.5k in benefits, no wonder we're in this mess.
Problem with inventories is the consumer isn't buying. A massive increase in unemployment in past year AND a 5% deflation in salary does not make a good christmas shopping season at all. I am expecting a 3-5% decrease in spending...and I am being conservative!
-Michael
Michael,
Considering the Christmas shopping season begins in 4 weeks or less, I've noticed that any discussion about the holiday has been verboten. Not talked about. Silence. Nada. Zip. Zilch.
I wonder why? Maybe all those unemployed (including the recently fallen off the rolls super unemployed) won't be doing much shopping and no one wants to talk about it.
not like people will be charging things with a 30% APR from their Citi card
i noticed the same thing a few weeks ago...usually
the pom pom girls and hand wringers are already
discussing cmas sales in august/sept....
this year nary a word -
sales will be flat but it will cause more retailers
to go under as happened last year...
Christmas was cancelled. Didn't you get the memo?
Since I work at the mall in a lower middle class area, I can tell you right now nobody's got any money. Go long on Dollar General and short Pennys, Sears and yes, Walmart. Why Walmart? They remodeled a store that's been open for only 2 years and raised their prices 15%. Pretty place, not a soul in it.
In our house we're worried about what happens when you combine lowered wages with inflation. Merry Christmas indeed. Thanks Santa Ben!
Silly rabbit, the Fed says there's no inflation. You must be delusional because if the Fed don't see it, it ain't happening.
Just like they didn't see no stinking bubbles.
i think i'll have my kids write to Bernanke instead of Santa Claus this year.
It's tough to spend your way out of a recession if you have no money.
http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm'Current-dollar personal income decreased $15.5 billion (0.5 percent) in the third quarter, in contrast to an increase of $19.1 billion (0.6 percent) in the second.'
Talk about cognative dissonance: personal consumption increased in the 3rd Q! "Real personal consumption expenditures increased 3.4 percent in the third quarter, in contrast to a decrease of 0.9 percent in the second." Something's not adding up.
more importantly, it's impossible to save your way out of a recession. If you think GDP is a sham, take a closer look at the earnings numbers that we just got. Cost savings through job cuts and lower CAPEX dies not a recovery make.
God forbid we actually discuss the underlying numbers. Just stick with endlessly repeating 3.5% annualized growth as you whip out your charge card to pay for that $5 latte and shut up about all those conflicting datum.
Get with the program dude.
Can't you just get the new Blog Monitor Czar to block our profiles?
3.5% ... 3.5% ... 3.5% ... mmmmmm, good
Not sure I understand what the verbal shreding was for...I am happy to discuss the details that can be found under the facade of 3Q earnings growth. I was suggesting that the top line are not growing, but rather the cost structures are being well managed. i.e. corp america stopped drinking the $5 latte and started to bring maxwell house from home. I don't however, buy into the idea that this is sustainable, you can only save so much, at some point you need to hand it off to the consumer who quite frankly is still paying the bills for yesterday's lattes and as such wants no part of it.
There was no shredding. CD=sarcasm.
Sorry, forgot to turn the sarcasm light on. My bad.
<sarcasm>
Most ZH readers are aware of my sometimes angry sometimes silly always biting sarcasm. I was actually agreeing with you.
Howard Davidowitz gives a good outlook on the consumer and if nothing else he is a hoot to listen to.
http://wallstreetpit.com/9902-howard-davidowitz-us-is-out-of-control-and...
I hate the word CONSUMER in this context, but........
close your shorts were off to 1100++
the sell side (brokers, ib analysts) just needed one number to hang their hat on, and they got it.
I can hear it now:
"Ms karanksy, I'm not sure if you have heard but the country is growing faster than anyone imagined! Now is the time to put your money to work"
a watched pot never mean reverts.
Futures seem unimpressed. Dunno - perhaps big money will goose this thing at the open.
Ah Yes. G-S and the BTE squeeze are alive and well.
Let's dust off those 10,000 hats for a little rock n' roll into mischief night.
Art Cashin just a few wrong ticks away from the Dow going down 800 points yesterday. Shows just how much risk the bulls are taking here.
"Prosperity cannot be restored by raids upon the public Treasury." - from Herbert Hoover's 1930 State of the Union address
Obama and Ben disagree
The unemployed homeless are dancing in the streets.
not sure if the gdp report is causing tremors but all markets look volatile in the last 30-60 minutes - usdjpy spiked hard as did eurusd, usdchf....gold spiked, oil spiked....my guess is that djia will spike hard too...probably a gap up...
The Gross Domestic Purchases Price Index shows +1.6%.
That means inflation!!!
From Bloomberg:
The gain in consumer spending, which accounts for about 70 percent of the economy, “largely reflected” an increase in purchases of automobiles attributable to the administration’s “cash-for-clunkers” plan, the report said. The 22 percent jump in purchases of durable goods, which includes autos, was the biggest since 2001. Total purchases were forecast to climb 3.1 percent, according to the survey median.
Excluding the influence of auto sales, production and inventories, the economy grew 1.9 percent last quarter.
Residential construction jumped at a 23 percent annual rate last quarter, the first gain in almost four years and the biggest since 1986. The rebound added 0.5 percentage point to growth.
Homebuilding rebounded as sales climbed, propelled in part by an $8,000 tax credit for first-time buyers and Fed purchases of mortgage-backed securities that helped lower borrowing costs.
1+1=3
OMG I AM SHOCKED!!!! SHOCKED, I tell you!
/The Mother of All Bear Traps, brought to you by your friends at Gubmint Slacks.
I f*ckin KNEW IT.
Just posted something similar on clusterstock.
Just like the fable of the frog and the scorpion, GS does what it does, because it's GS.
Don't let a scorpion ride on your back.
I think that this "thing" is going to unravel in a horrible way, and at a pace that has been unseen in modern history.
Be prepared...and be there for your family, friends, and neighbors if they are unprepared. It will be ugly, and there will be many in dire need.
Noah had his time, and we will have ours.
I smell something else cooking though. Goose, maybe? Duck?
Perhaps swan?
Dick Bove got it right...and wrong. I wanna see Pelosi's face at 9:30 (the cat that swollowed the GNP mouse)
Listen GOLDMAN IS NEVER WRONG.
The revised figure will be 2.7%, just like htey said. THe 3.5% figure today was all about the White House saying......Boo-yah! and I TOLD YOU SO.... 1.5 million jobs saved or created (fuzzy math) and I told you to buy stocks!!!!
It's all bullshit anyway.
absolutely. at least we have this out of the way now
There obviously something wrong with the report.
From the CBO Report:
'The change in real private inventories added 0.94 percentage point to the third-quarter change in real GDP after subtracting 1.42 percentage points from the second-quarter change. Private businesses decreased inventories $130.8 billion in the third quarter, following decreases of $160.2 billion in the second quarter and $113.9 billion in the first.'
How can a $160 billion reduction in Q2 lower the GDP 1.42 points and a 130 billion inventory reduction in Q3 add .94 points? Or could it be that wacky CBO added .94 when it should have subtracted .94?
What I understand is that, contrary to what you might think, a reduction in inventories ADDS to GDP. Make sense? Not to me. In fact, the GDP number is questionable as a measure of national economic health. At the National Homebuilders Fall Forecast in Washington last week, Mark Vintner of Wachovia Wells suggested that "final demand" is what we should be looking at, and that number is terrible, and projected forward yields a forecast of 12% U6 unemployment!
So why did the Q2 reduction subtract from the GDP? Do the numbers mean anything?
GDP numbers are padded, just like CPI numbers are. GDP includes consumer, investment, and government spending, plus the value of exports, minus the value of imports. (I copied that from Peter Schiff's book, however I trust that it's ecumenical.)
For example, Hurricane Katrina contributed to GDP...crime prevention costs, divorce expenses, medical costs, national defense...(again copied from Schiff)
Money borrowed from foreign sources but spent here increases GDP. (!) Never mind that it has to be paid back out in the future.
The real interesting data is found in what percentage of GDP is consumption, and what is wealth-producing. I think it's around 70% consumption.
I'm glad you pointed this out.
In fact, this exact same conundrum where inventories add or subtract from GDP one quarter yet do the opposite the next quarter happened just a few quarters back (can't remember exactly which ones).
I noticed this seemingly contradictory application of inventory levels to GDP and asked around on calculated risk and a couple other blogs, and no one seemed to know why it completely changed from one quarter to the next.
I think the answer, as you also suspect, is that they pretty much just make up whatever they want it to be to achieve their agenda...
The wad has been shot.
Now what?
jobless claims drop by 1000!!!
Consumer/cyclical sector is up 22% in the premarket. What a bunch of fools.
Lets see what happens when the Feds take away the super-spiked punchbowl.
Bennie Bernank-ster has more than one punchbowl. He simply keeps moving the Wall Street "free" cash from one magic punchbowl to the other...
Sour grapes and Goldman conspiracies. The usual comments on Zerohedge.
Grab a hallway pass and leave.
How in the world can anyone get excited about about an underreported "3.5%" extension of more credit? The higher the purported stimulus GDP, the worse the consequences.
Sell off to resume in full force.
hunch -- GS's 2.7 call was/is a set up. Today it's hard to find shares to short in certain stocks. That always spells danger.
If there is such a thing as a lousy beat, 3Q GDP would be it. All government claws over this "strong" figure, and so what if inventory decline has slowed, its still down compared to Q2. No wonder no one is impressed. Bears might still take it from here, and the squid would regret crying wolf for it actually kick-started the equities roll-over. Short GS anyone?
Shell's CFO says fundamentals don't justify the current high oil price:
http://finance.yahoo.com/news/Shell-Q3-profit-falls-62-pct-apf-1431592765.html?x=0&sec=topStories&pos=7&asset=&ccode=
Henry said the recent recovery in oil prices to around $78 per barrel is speculative.
"Fundamentally we don't see demand turning yet and there's plenty of supply available," he said.
"So while I might see reasons why the prices might be higher, I simply can't plan a balance sheet" on the assumption that they will remain at current levels, he said.
We're seeing similar comments from other major commodity cos such as BHP and Rio. My take is that the big guys are looking to acquire minnows in order to replenish their falling reserves and are mighty upset that the rally has raised the cost of these. Near term there is plenty of supply, but in 5 years time?
Same story as the one DiMicco is telling over at Nucor, i.e., commodities are flying on speculation/dollar free-fall and actual demand is non-existent.
Dr Hack, describe what you mean by "always spells danger".
short covering on a massive scale = bear trap
as soon as the momos get wind, its blast off - once again.
Cash for clunkers (1.6 inflated GDP)
homeowners tax credit (xx GDP?)
Who gives a crap, its all made up. Houses are still underwater, people still don't have jobs. The only help this is to anyone is that wall street made a killing trading futures in commodities since march ($30 a barrel -> $80 a barrel oil; hypercontango! over 100% gain) thanks to Uncle Sam engineering a dollar debasement.
Thanks for "inflated GDP".
Thursday, October 29. 2009
Posted by Karl Denninger in Macro Economics at 08:59
Oh what a tangled web we weave....
Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 3.5 percent in the third quarter of 2009, (that is, from the second quarter to the third quarter), according to the "advance" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP decreased 0.7 percent.
Looks good, right?
Hmmmm.... or is it?
Motor vehicle output added 1.66 percentage points to the third-quarter change in real GDP after adding 0.19 percentage point to the second-quarter change.
....
Real federal government consumption expenditures and gross investment increased 7.9 percent in the third quarter, compared with an increase of 11.4 percent in the second.
Ok, from this we can compute a few things.
3.5 - 1.66 - (7.9 * 30%) = -0.53%
Now let's adjust for inventories:
The change in real private inventories added 0.94 percentage point to the third-quarter change in real GDP after subtracting 1.42 percentage points from the second-quarter change.
-0.53% - 0.94% = -1.47%.
Ok, that's bad but not catastrophic and is an actual improvement compared to the second quarter. But....
Current-dollar personal income decreased $15.5 billion (0.5 percent) in the third quarter, in contrast to an increase of $19.1 billion (0.6 percent) in the second.
Personal current taxes increased $4.8 billion in the third quarter, in contrast to a decrease of $119.1 billion in the second.
Eeeeehhh... those are both going the wrong way. Taxes up, income down. And...
Disposable personal income decreased $20.4 billion (0.7 percent) in the third quarter, in contrast to an increase of $138.2 billion (5.2 percent) in the second. Real disposable personal income decreased 3.4 percent, in contrast to an increase of 3.8 percent.
That's worse. A lot worse. Disposable personal income decreased in nominal terms q/o/q by 5.9% while in real terms (inflation adjusted) it decreased q/o/q by 7.4%! That is an enormous swing in purchasing power and not in the right direction!
Personal outlays increased $148.2 billion (5.8 percent) in the third quarter, compared with an increase of $8.2 billion (0.3 percent) in the second. Personal saving -- disposable personal income less personal outlays -- was $364.6 billion in the third quarter, compared with $533.1 billion in the second.
The personal saving rate -- saving as a percentage of disposable personal income -- was 3.3 percent in the third quarter, compared with 4.9 percent in the second.
So into decreasing personal income and disposable personal income people tried to spend anyway. Best guess: most of this was "cash for clunkers", which is the worst sort of "spending" - it is the taking on of more debt by replacing a paid-off car with one that now comes with a shiny (and nasty) payment book. The Trade: Go long auto repo outfits (aside: as far as I know there are no publicly-traded repo companies.)
Nothing in here I like; to the contrary, this report sucks and on a drill-down appears to be full of outright lies.
Exactly. This is not recovery; it's cover up.
All BS...They have to stop claiming recovery with 14% umemployment??? But then again, with the amount of looting being done by banksters, who needs emoployment...the bonus money will drive up GDP with their holiday purchases.
Forget the Nobel Peace Prize. Ben Bernanke and Gordon Brown to be canonized. Time to start praying.
Flash! ah-ahh!
Saviour of the Universe!
Flash! ah-ahh!
He'll save everyone of us!
Flash! ah-ahh!
He's a miracle!
Flash! ah-ahh!
King of the impossible!
He's for everyone of us!
Stands for everyone of us!
He saves with a mighty hand!
Every man every woman!
Every child-he's a mighty!
Flash.
So in the 3Q, GDP grew by $100 billion, if you go with the gov't numbers (1/4 of a 3.5% increase to Q2 GDP annualized), and achieving that only cost somwhere around $350 billion in new gov't deficit spending? (1/4 of the $1.4 trillion dollar deficit for the year)
Anon - you forgot the multiplier effect, which we haven't seen yet. I'm sure the other $250bn will show up in next quarter's GDP times 30...
Pamela... are those real?
Yah, to all the above and add 1.) this the initial and this will be revised in 30 days; 2.) as long as there are this many unemployed/marginally employed, there is no chance for a real recovery. Employment corellates to gdp, even if lagging. The slack cap-uti also has to be admitted and ISM doesn't corellate with/predict manufacturing growth. So overall, this is a snowflake in hell effect.
Here at Muppet Labs, Dr. Bunsen Honeydew and I are anticipating that Q2'10 GDP will be getting a nice boosting juice from the Unemployment Services sector.
The GDP people number is a lie? So what?
People also believe in god. In fact, people believe in various gods. At most only one of them can be right and the majority is wrong and following something that does not exist. Most likely all believers are living in a fantasy world. Despite the delusion, we have wonderful churches and art the world over, geared towards everyone's particular preference, and millions go to church weekly.
So people believe in government fantasy, too. They will act accordingly on this belief, which means buying more equities. It doesn't matter they are dead wrong anymore than it matters Michelangelo believed in a myth. The Pieta is there for all to behold. So is this rally.
Organized religion does not pretend to provide factual data upon which to model your investments, business planning, etc.
Per the release:
from advance to second - variance +/- 0.5 average
advamnce to 3rd - variance +/- 0.7 average
advance to last - variance +/- 1.2 average
therefore expect GDP to be in the 2.5% range when all is said is done
OKay so you are saying this q3 GDP is cover up...then how come markets are rallying, eurusd is rallying...maybe we are missing something?? aren't we somewhat blinded?? could it be that we only seeing those facts that confirm the story that all this is a massive fraud?
The market is rallying because the market is rallying, it's pure 1920s-style speculation with no interest in fundamentals and when it tanks, it's going to tank hard.
The market is rallying because the market is rallying, it's pure 1920s-style speculation with no interest in fundamentals and when it tanks, it's going to tank hard.
QFT
There just chasing numbers, and technicals....No fundamentals...lost art..
I posted this last night on another thread:
GM/Chrysler bailouts: $100b
TARP/bank bailouts: $1T
The sound of Chinese students laughing upon realizing US GDP "growth" was due to over $20T of deficit spending, bailouts & committments? Priceless.
I don't think Goldman cares what people think. They put out a low GDP report because they wanted the market to go down, so they could get in ahead of the higher GDP number and then sell. Suckers. NEVER believe ANYTHING that Golden Shower puts out to the public - the whole point of those reports is to separate fools form their money.
I agree with the 2nd part of your post. This move definately separated some fools of their money.
However, I do believe that the Government Squid is starting to care about it's public opinion. If this whole thing pans out like a lot of us think it will....real effin shitty, I think they know that anyone considered public enemy #1 will be in the literal crosshairs of some very pissed off sheep who happen to be wearing wolf gear.
My guess is that a lot of the Squid's top execs have dual citizenship or will soon have that status. Hence the large in your face bonuses. They know this window of opportunity errrr..... door to the unborn taxpayer vault won't be open forever.
The plan is to steal your shit, your kid's shit, and your kid's kids shit, then move to Monte Carlo.
GDP beat expectations(Spin Spin), however my gut tells me downward revisions to 2.7% (exactly GS expectation revision) will be the final number. Short term the market was oversold, long term it is way overbought. Here is a picture worth a thousand words.
http://1.bp.blogspot.com/_TwUS3GyHKsQ/SujQCG5GNbI/AAAAAAAACXg/BjwDZwvkZuk/s1600-h/spxdaily.png
A lot of technicians have the great downward sloping bear line intersection at 1121. However, this guy has it at 1101 and it looks good. I see bill gross is joining the equity bear wagon calling a top in the market. The big discrepancy is in the monthly unemployment number, The states said we lost 480K in Sept, the fed said it was only 200+?. Next week unemployment number if honest may be the day of reckoning.
Tomorrow we will see if buy the dip will prevail or sell the rally takes hold.
I also have the line intersection at 1,101... The Fib. 50% is at 1,121. I believe the Gang's plan is to take the S&P above both figures... so that everyone declares the bear market definitely over... those who don't will be dismissed as idiotic permabears... who, of course, will ultimately be proven right because the US economy is the biggest mess one can imagine and the stock market will be about 60% above its intrinsice value.
Whilst discussing GDP is all well and interesting, I'm sure you are all aware that Gross Domestic Purchases Price Index figures were released today also. They show +1.6%. That is very inflationary!
Funny but they didn't use that inflation number when figuring the GDP. Do you suppose there are different inflation numbers for different purposes?
Nay, there must be a reasonable explanation somewhere, we just need to wait for the inevitable revisions.
Ya, that's the ticket. Party now and wait til later when they revise down.
The notion of GS grappling with any issue regarding "public opinion" is amusing. The vast majority of them could give 2 shits, the ones who care a troublesome few.
GS's best position is virtual anonymity as far as the MSM is concerned. They don't want anyone knowing what they are up to, how much they make, etc. At GS, I'm sure "Public relations" are detested on many levels. All of this leads to a sort of incompetence in dealing with people "on the outside," since their insularity, secretiveness, culture and disconnectness makes any move on their part a guessing game. Like a sociopath faking emotions.
Agreed that there is a long internal conversation that precedes their public pronouncements of estimates of GDP, and the goal is not to be right, but rather to serve their interests. So assume anything they say is a lie, whether white or dirty.
I agree, Ned. Of course, we didn’t need to wait for the Commerce figures today since we had Goldman’s announcement yesterday, prepared for the average investor’s consumption, and positioned to reflect today’s figures as “unexpectedly” higher. Goldman doesn’t control the financial industry to be surprised.
A recession isn’t over until there’re two consecutive quarters of growth. The reason the Commerce Department uses two quarters of growth to signal the end of a recession is it’s harder to fake the numbers over six months than over three months. The significant figure in today’s report, of course, is that Federal government spending grew 7.9%, on top of 11.4% last quarter. These figures reflect the “accomplishments” of Obama stimulus, bailout for bankers, clunker cash, and taxpayer transfers to “first time” homeowners (many found not now to be first time). Can the economy grow on its own? Answer. Not yet.
Here’s today’s recovery according to the AP an hour ago in Economy grows in 3Q, signals end of recession: “To foster the recovery, the Fed is expected to keep a key bank lending rate at record low near zero when it meets next week and probably will hold it there into next year.”
As for the chucklers who never confront a conspiracy they don’t ridicule -- a conspiracy is a secret agreement between two or more people to perform an unlawful act; a plot to carry out some harmful or illegal act (especially a political or financial plot); a group of conspirators banded together to achieve some harmful or illegal purpose..
So, okay. Let us not call Goldman’s and its fellow banksters’ nefarious money monopoly manipulation game a conspiracy. Instead, let us just say that alleged representatives of the people and the markets get together in secret and agree to do two things:
test
Saw a Wall Street Journal blurb about calculating GDP - today's edition - and if the rate of decline in inventories decreases that increases GDP. But of course, Jack . . .
So if you are storeowner who decided for good reason the last few quarters that hanging on to a pile of depreciating inventory was a bad idea and unloaded it (while you still could), but still have some left that you are unloading at a less-brisk pace, congratulations! You just contributed mightily to GDP. That seems intuitive, huh?
Question everything.
Indeed...as I mentioned earlier, the GDP number is so full of fluff and padding as to be meaningless, even (or especially) compared to historical GDP numbers. So many counteracting variables, artificial and otherwise, all adding up to a single number?
Can someone explain why the world likes to be fooled in this way? Why do people play along? It's mass delusion.
I recall having read about an experiment. They trained some monkeys to do something completely unnatural for them. Then they put them all in the same place and made sure they continued to respond to the training. Once the monkeys were fully trained to do the unnatural thing, they added a new-and-still-normal (i.e. untrained) monkey. Within days the new monkey would do the unnatural thing, just as the other ones.
Speaking of unloading inventory, a struggling Sears is engaging in a bit of “Christmas creep” as it ups its Official “Black Friday” 2009 Website to coincide with Halloween through Thanksgiving with reduced weekly specials and extended store hours—opting not to wait to kick off its traditional Christmas shopping spree on official Black Friday, the day after Thanksgiving.
Apparently other merchants are expecting a grim holiday season, cha-ching wise, with discounts expected to be deeper than usual and coupled with more hours for shopping. Wal-Mart is already advertising holiday toys for under $10, and is going head-to-head with Amazon Inc., and Target Corp. slashing down prices on yet-to-be released hardcovers that are for sale on their Web sites
I dearly hope I am the first to make this connection, and just in time for the holiday.... Timothy Geithner is Renfield! Slave of Goldman Sacks and now Uncle Ben.. Even down to the haircut... Please see exhibit A-
http://www.youtube.com/watch?v=-HALX9RiaEc
Peter MacNichols is Timothy Geithner!
They got all our blood, Let them eat green shoots I say!
So what are the revised Q2 and Q1 GDP numbers? did they get better or worse?
a university did a study with rats, where they continued to add rats to a finite space over time. another experiment started with tha same amount, in the same space, but slowly removed females, and replaced them with males. (I know animal cruelty) In the final experiment, same space, and number of rats, they slowly decreased the daily food amount. In all cases where something vital to survival was threatened, the initial response was competition, then hostility, and violence, and ultimately, the stress led to them killing eavh other, to reach a balance. Can we really find a balanced world, where we can live safely, and peacefully with goldman sachs types?