Goldman Q1 GDP Imminent Downgrade Warning Gets Louder: "Significant Downside Risk To Our Q1 GDP Estimate Of +3.5% "

Tyler Durden's picture

Following last week's deplorable durable goods number, and the subsequent Goldman warning, i.e. "the data increase the sense of downside risk to our Q1 GDP estimate of 3.5%", Hatzius has just stepped it up a notch, adding a key adjective confirming it is just a matter of time now: "The latest real consumption figures - including revisions to earlier months - point to growth for Q1 as a whole of approximately 1.75-2.0% qoq annualized. This compares to our current forecast of +3.0%. The report therefore implies significant downside risk to our Q1 GDP estimate of +3.5% qoq annualized." We give it two weeks.

From Jan Hatzius' instanalysis on Personal Consumption data.

1. Nominal consumer spending increased by 0.7% mom in February, but part of the large increased reflected price gains. Real consumer spending increased by 0.3% mom after an unchanged reading in January. The latest real consumption figures - including revisions to earlier months - point to growth for Q1 as a whole of approximately 1.75-2.0% qoq annualized. This compares to our current forecast of +3.0%. The report therefore implies significant downside risk to our Q1 GDP estimate of +3.5% qoq annualized.

2. Nominal personal increase increased by 0.3% in February, slightly less than expected. However, income growth in January was revised up to +1.2% mom from 1.0% previously. Real disposable income - income adjusted for taxes and price change - fell by 0.1% during the month.

3. The Personal Consumption Expenditures (PCE) price index rose by 0.4% mom or 1.6% yoy, as expected. The core PCE price index rose by 0.2% mom (0.155% unrounded) or 0.9% yoy. The monthly growth rate was moderately below our forecast (+0.20% unrounded), but nevertheless confirms signs of firming in this inflation gauge. Growth in the market-based core PCE - which strips out non-market prices estimated by the Commerce Department - also accelerated to +0.17% mom from 0.12% in January.

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jkruffin's picture

I guess that means there is significant downside risk to their 1.50 EUR/USD call as well  LOL

Everyone knows trade against Goldman to make money.

EUR will revisit 1.20 as the PIIGS default.

aint no fortunate son's picture

well, within seconds of the news they took the dollar out and shot it... EURUSD about to break out to HoD

oh_bama's picture

Good opportunity to BTFD if it misses!!!

  • If it misses you know for a fact that Japan and weather are to BLAME!!
  • If it misses the chances of QE3 will shoot UP!!
Cdad's picture

The report therefore implies significant downside risk to our Q1 GDP estimate of +3.5% qoq annualized.

Translation...prepare for Goldman to sell the piss out of the market.  You are now officially on the other side of the trade from us...and you are warned.

I wonder how the rubes at Morgan Stanley feel this morning, having just upgraded every last thing they could think to upgrade...just this morning?

unwashedmass's picture

was there ever a doubt that goldman wouldn't work like demons to fuck everyone -- even their clients -- once again?


SheepDog-One's picture

The bulls on the bus speeding to the cliff edge let out another loud whoop and cheer! Gotta be good for stratosphere P/E discount travel stocks!

So Close's picture

Does anyone know where to find a GDP numner that back out REAL quaterly inflation?  Also.. how about a GDP number with a ratio to the amount of new money that was printed in the same period?

monopoly's picture

Do not trade this insanity. Like my gold, silver and not concerned about dips. Physical just fine for me.

Tense INDIAN's picture



Getting the BIG picture right.


Will get an update in the BIG picture within this week::

Spalding_Smailes's picture

But, but, but ....... With all the black swans why is Gold going under 1,400 again ? 


Lear Capital, Turd anyone.... why is it off like pong again ?

Johnny Lawrence's picture

You're just as bad as a permabear.  When you become emotionally involved in an investment, you miss out on opportunity.  You've missed a huge run in the PMs because you slam your fingers down on your keyboard when typing about gold and silver.

Spalding_Smailes's picture

No, no, no I was promised QE 3, 4, not 5, not 6...... Turd is closing down the blog if we don't hit $1,650 in 12 weeks ( he promised after Sinclair gave him the green light )..... With the middle east, the dollar reserve status going the way of the doe doe bird, Japan, Gold should be over 1,500 today, all the new swans in the house ...

What gives ? This should all be priced in the market is always looking forward ...


Maybe like I have been saying , no QE coming .... Wooooooooooooooooooosssssssssh....

SheepDog-One's picture

The Smailes kid mocks PM's which have seen doubles, while touting his stocks which adjusted are still down at 1999 levels. The Smailes kid aint too bright.

Spalding_Smailes's picture

Dog, Gold has not done shit since Oct 20th of last year............ With the dollar crash looming, QE3 MUST HAPPEN, Egypt, Bahrain, Japan printing, Portugal, the Debt Ceiling, fallout in the USA, when does this get priced in ?


Like I said Gold has done shit since I started posting my housing bubble quotes 5 months ago .....

SheepDog-One's picture

More printing will save the dollar? Oh I see.

Also, stocks havent done shit since 1999.

Spalding_Smailes's picture

I tossed out 25% runners over the last 5 months.... You could have made money hand over fist trading.....

Exxon Mobil, US Steel, Rimm, Nividia, ect .... Make your 20% then take your profits .... Simple.

SheepDog-One's picture

Uh huh, more rear view mirror trading prowess.

Spalding_Smailes's picture

Nope, everyone on ZH seen my post ..... Everyone..... Zeus, Gluu, Mpel ......


Wait, I forgot, it was Blythe ..... Thats the ticket ..... Always a scapegoat, maybe I should watch the new bears  video again ..... 


SheepDog-One's picture

Yep and using rear-view trading theory if you'd only bought thousands of 60 puts on RIMM early last week youd be a gazillionaire. People can be myopic as they want in their claims 'the stock markets are only up' but in reality many stocks have plunged, many sit at 52 week lows not highs. But trade what you want, just dont try to say PM's are some kind of beaten down laggard poor performer.

GoinFawr's picture

@ SS "But, but, but ....... With all the black swans why is Gold going under 1,400 again ? "

Gold went under 1400? I musta blinked...

Oh, I see, 'is...going', your ol' mantra.

Heh, how wrong have you been on that one for ages, hey? Time for a new religion mb?

RobotTrader's picture

You would think that after gold tripled in price, NEM would be the stock in the S & P 500 trading at $500/share.


It's PCLN, a travel and leisure stock that is printing near $500.

And William Shatner is laughing all the way to the bank, while Jim Sinclair and Peter Schiff are left behind scratching their heads.

Amazing times.

lieutenantjohnchard's picture

only in the dingy, dark, cramped quarters of a 600 square feet apartment overlooking some los angeles hell hole freeway would somebody reach the conclusion that after 10 straight years of gains for gold bullion and a 120% increase in the price of silver in the past year or so that sinclair and schiff are scratching their head at the performance of their holdings.

SheepDog-One's picture

LOL, thats ol catfishmouth for ya!

dogismyth's picture

Congratulations - YOU WON!!


This is not a joke.

zaknick's picture

"For our struggle is not against flesh and blood, but against the rulers, against the authorities, against the powers of this dark world and against the spiritual forces of evil in the heavenly realms. Therefore put on the full armor of God, so that when the day of evil comes, you may be able to stand your ground, and after you have done everything, to stand." Eph 6:12-13

Sound familiar? The 666 banksters own you and your family's world, bitches!

equity_momo's picture

When did Goldman downgrade GDP last year? post flash crash but pre QE2 i belive - anyone have a specific date.

Silverhog's picture

If you want to drown yourself in Kool-Aid, here is cnbc's glowing assessment of the world economy.

Seasmoke's picture

liars or idiots....take your pick

dogismyth's picture

idiots are easier to assfuch, liars say they want more.

ziggy59's picture

doesnt matter... The Eveready Bunny Took Viagra this mornig..theDow keeps going and going and going..

dick cheneys ghost's picture

I dont see how the GDP can grow....the States are cutting to much under enormous financial pressures.

gigeze787's picture

CNBC (0947 ET): Pseudo-economist Lies-man reports JPM now forecasting a "short-term" global decline in manufacturing, followed by a (perma-bull) sharp bounce-back...

Mandy's panties still dry...

BennyBoy's picture

Thank god GS is all for QE3!

slaughterer's picture

GS would need to sell the market off in accompaniment to this downgrade in order to underline the graveness of the situation in order to justify Ben extending QE measures.  Hard task to accomplish given where the dollar is going.  Maybe they can accomplish it in tandem with JPM by crashing commodities, which would give Ben a nice entry on his inflation targets.

Cdad's picture

GS would need to sell the market off in accompaniment to this downgrade in order to underline the graveness

Selling is already underway.  I have observed four very distinct waves of program selling already this morning.  

Both the US dollar and Vix futures have commenced schizophrenic behaviors.  Soon, it will become clear to even the rubes over at Morgan Stanley that there is more short term money to be made in counter trend rallies than to pump the S&P another 20 points via upgrading of stupid long equity ideas.  The Vix fell 40% last week...and it can rise 40% this week on the preponderance of Black Swans freakin' everywhere blocking out the freakin' sun, even.

Or, I guess, you can go with the E. Burnett adorableness catalyst and buy the heck out of UnicornDew futures...aka the S&P.  

Cdad's picture

Oops...make that five waves of selling.  That last one actually left a mark.

Cdad's picture

Well well...wave number six of selling now...and it seems to have broken the market's stride.

johngaltfla's picture

When Goldman stops believing the BEA/BLS statistical LSD reports, I perk up.....

nah's picture


slaughterer's picture

Tyler, the Hatzius/GS about-face is playing out exactly as you have been predicting it all along.  Hatz off!

SheepDog-One's picture

As long as they can manage to pop the DOW +40, most all are totally fooled by it. Amazing!

Caviar Emptor's picture

Yup. It ain't no boom. 

And after all those trillions printed, all the rules they changed, all those companies they saved, daily intervening and tweaking and cheerleading and pumping, $7 Billion of QE daily, Bernanke puts and globally coordinated bailouts.....

After 3 years of a grueling, non-stop Holy Crusade to resurrect Wall Street: We got almost no victories for the real economy, and lots of defeats (housing, employment, real incomes, cost of living...) And the closets are beginning to overflow with skeletons, the carpet is getting mighty bumpy with all that's been swept under it. 

Cdad's picture

LOL!  This just in @ the Ministry of Truth [CNBC].  A female criminal syndicate Wall Street banker just declared that company executives are extremely optimistic.  Then, said syndicate banker moves on to how jobs will not be returning because of productivity gains.

So...if you follow...because execs are optimistic [having sold the crap out of their shares relentlessly for months now], and because jobs are not coming back [corporate costs will not be rising]...what? UniconDew futures?

WTF?  Did The Street suddenly go on an all fluoride diet?  It is amazing how stupid this class of people really has become.  Brain damage.  There is no other explanation for bankers who go on TV.