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Goldman Revises Q3 GDP By 50 bps Lower To 3% On Worse Trade Balance
Too bad America can't be more like China and just determine what the GDP for any given period should be. Of course, it merely needs to become a fully vetted and Comintern recognized communist country (no more of this half-asses sutff) and then it could easily proceed to fully manipulate any and all data releases (even more effectively than it does now). Until then, things are tricky. Like today for example, with the trade numbers coming out and painting an ugly picture for not just import prices but for the "blockbuster" Q3 GDP. Maybe Goldman was wrong in their first GDP estimate. Something tells us Jan Hatzius will be much more correct in his downward GDP revision this time (to 3% from 3.5%), when the next estimate of Q3 GDP comes out, substantially lower than previously thought.
Wider Deficit Reflects Recovery but Creates Downside for Q3 GDP; Import Price Increases Reflect Dollar and Oil
BOTTOM LINE: Wider-than-expected deficit has expected recovery composition -- large increases in both imports and exports; report suggests modest downside revision to GDP, at least from this source. Import price increases reflect both oil strength and dollar weakness.
KEY NUMBERS:
Trade balance widens $5.8bn to -$36.5bn in Sep vs GS -$32bn, median forecast -$31.8bn
Import prices +0.7% in Oct (mom, -5.7%yoy) vs median forecast +1.0%.
MAIN POINTS:
1. The trade balance was much wider than expected but with a pattern that was essentially consistent with the forecast. In a recovering global economy, one would expect both exports and imports to grow, and with imports exceeding exports for the United States this would widen the deficit. This is exactly what happened in September. Exports rose 2.9% overall (mom, not annualized) and 4.0% for goods; imports surged 5.8% overall and 7.1% in the goods sector. In both cases the September 2009 levels are well below year-earlier levels (down double digits all around).
2. The widening in the balance on goods -- from -$42bn to -$47.6bn -- was more than double what the Commerce Department assumed in its provisional estimate for real GDP growth. Hence, from this source we should expect a modest downward adjustment to the 3.5% annualized increase posted for the third quarter. Coupled with other data, which show a very small downside on balance, the revision is now looking like about 1/2 point or so. We have yet to see retail trade and inventory data, and they could modify this tentative conclusion, perhaps significantly.
3. Although import prices rose less than expected, the increase is noteworthy for the fact that it was not driven primarily by petroleum prices. They rose slightly more than the overall index -- 0.9% vs 0.7% -- but the difference still left prices ex petroleum up 0.7% on the month. Over the past three months, this index has risen 1.4% altogether, presumably due to the cumulative weakening in the dollar during 2009. Excluding petroleum prices, import prices are still 3.8% below their year-earlier level.
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Besides oil a good part of imports were CFC auto program. Not sustainable.
Who pays attention to what GoldmanSach says?
This should help anyone who ended up with more T-Bonds than they would have liked...
wow. let's see...u6 headed to 20%, consumer confidence PLUNGES, trade deficit WIDENS, gdp downward revision (big surprise there) 50 bps.
and abercrombie takes the cake today.
christ people.
wow. let's see...u6 unemployment heading to 20%. consumer confidence PLUNGES. trade deficit WIDENS. gdp revised downward (big surprise there) 50 bps.
and abercrombie is the talk of the markets today.
christ people (sorry if this posted twice)
+100.
Markets up big time. HAL9000 in full effect.
Who needs sales? They beat estimates!!!
Goldman ranked them a 'conviction buy' that's all you need
http://www.insidefutures.com/article/120581/Abercrombie%20&%20Fitch:%20S...
Check out Rosie's commentary about the Goldman revisions today:
"We noticed an interesting piece of research on U.S. GDP from Goldman Sachs’ Economics team that’s worth highlighting. The team questions whether the official government GDP statistics capture how poorly small businesses (ie, sole proprietorships) are doing....
The Goldman team uses a couple of different statistical approaches to test their thesis... The first model suggests that the NFIB survey is consistent with overall GDP growth of 2.5% to 3.0% — not the 3.5% reported.
The second approach has to do with revisions to the GDP data and their relationship to the NFIB.... This second model suggests that Q3 GDP could be revised down by as much a 1-2 percentage points."
What exactly does "pump and dump" mean again?
Chicken Teriyaki,
Goldman doesn't need jobs or economic growth.
They print money. They buy stocks. It doesn't matter about frivilous statistics of the little people out there, like whether they have jobs making $10 an hour or $40,000 a year. That stuff doesn't matter for booms and busts.
anyone smell a reversal today?
No. What I smell is the same as any other day: Massive Fed induced liquidity driving asset prices of all types up while crushing the dollar in some insane risk-loving orgy of madness, whilst the train speeds along at record velocity towards a point - somewhere down the line - that terminates into a mountain.
GS sed this, GS sed that... :vomits:
I'm sure this is just more cleverness from GS to bring down the markets a bit so that when the next couple months' numbers "surprise" on the upside they'll be sitting on some nice, fresh gains for their bonus pool. Right?
So if the actual revision is 2 percentage points downward, taking us to 1.5%, and if we then back out the effect of one-time govt. spending as a factor (the Stimulus) - when, exactly, did the recession end?
wink/nudge. it didn't.
Goldman Sachs to Jobless Jack
http://www.youtube.com/watch?v=cddjB-k6QOk
thanks for the link. too funny. the same guy did this animation too; funny but not funny at the same time:
http://www.youtube.com/watch?v=iqw8SJa3oy4
http://www.crainsnewyork.com/article/20091112/FREE/911129993
Any new developements on the HP / 3com insider trading? Or was this just a spread?
you know I have one simple request, and that is to have sharks with freakin' laser beams attached to their heads