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Goldman Slashes Economic Forecast, Cuts Q3 GDP To 2.5%, Sees Q2 Below Stall Speed

Tyler Durden's picture




 

Nobody could have foreseen this now typical Friday night bomb from the 200 West macroeconomic wrecking crew. Nobody. Well... "Here is the first official Q3 GDP downgrade, courtesy of JPM's Michael
Feroli. We fully expect every other clueless Wall Street lemming to
follow suit in minutes." But as long as the lemmings all move in a herd over the cliff, they will still somehow all get paid the same $5 million (of which 25% is cash and the rest is indentured cliff-vesting equity servitude) at the end of the year. Either way, can we all now agree that Goldman did indeed jump the shark in December, especially now that it sees Q1 GDP at below stall speed in real terms. So here it is: "Following another week of weak economic data, we have cut our estimates for real GDP growth in the second and third quarter of 2011 to 1.5% and 2.5%, respectively, from 2% and 3.25%. Our forecasts for Q4 and 2012 are under review, but even excluding any further changes we now expect the unemployment rate to come down only modestly to 8¾% at the end of 2012." Here is why Hatzius gets paid the big Bernankebux: "The “bugbear” is that we are still unsure about the precise reasons
for the slowdown in 2011 to date, which is sharply at odds with our
expectation at the end of last year that growth would accelerate in
2011
." And the punchline: "Our forecast remains no fresh monetary easing from the Federal Reserve, but the probability has risen. In particular, Fed officials would undoubtedly ease if the economy returned to recession—not our forecast, but clearly a possibility given the recent numbers." Our prediction is that when Bill Dudley's 2011 calendar is released in December, his first meeting with Jan Hatzius at the Pound and Pence will have taken place right.... about.... now.

From GS:

More Downgrades to Our Growth Forecasts

  • Following another week of weak economic data, we have cut our estimates for real GDP growth in the second and third quarter of 2011 to 1.5% and 2.5%, respectively, from 2% and 3.25%. Our forecasts for Q4 and 2012 are under review, but even excluding any further changes we now expect the unemployment rate to come down only modestly to 8¾% at the end of 2012.
  • The main reason for the downgrade is that the high-frequency information on overall economic activity has continued to fall substantially short of our expectations. In particular, our “bean count” for second-quarter GDP has deteriorated further and our monthly Current Activity Indicator (CAI) is showing growth of just 1.3% in June.
  • Some of this weakness is undoubtedly related to temporary factors, namely supply chain disruptions and (the temporary part of) the oil shock. But the slowdown of recent months goes well beyond this. One major concern is the anemic growth in domestic final sales of just ½% (annualized) in the first half of 2011. There is only one precedent in the postwar period for such weak demand growth outside the immediate vicinity of a recession.
  • We have no hard information about final sales in Q3 yet, but Friday’s preliminary consumer sentiment index for July from the University of Michigan fell to the lowest level since March 2009 (!) and is now back in territory normally associated with recession.
  • Our forecast remains no fresh monetary easing from the Federal Reserve, but the probability has risen. In particular, Fed officials would undoubtedly ease if the economy returned to recession—not our forecast, but clearly a possibility given the recent numbers.

Following another week of weak economic data, we have cut our estimates for real GDP growth in the second and third quarter of 2011 to 1.5% and 2.5%, respectively, from 2% and 3.25%. Our forecasts for Q4 and 2012 are under review, but even excluding any further changes we now expect the unemployment rate to come down only modestly to 8¾% at the end of 2012.

The main reason for the downgrade is that the high-frequency information on overall economic activity has continued to fall substantially short of our expectations. In particular, our “bean count” for second-quarter GDP has deteriorated further and our monthly Current Activity Indicator (CAI)—a broader and higher-frequency measure that takes into account 25 different indicators of monthly and weekly activity—is showing growth of just 1.3% (annualized) in June, with a pattern of deceleration through the second quarter (see Exhibit 1).

Some of this weakness is undoubtedly related to the disruptions to the supply chain—specifically in the auto sector—following the East Japan earthquake. By our estimates, this disruption has subtracted around ½ percentage point from second-quarter GDP growth. We expect this hit to reverse fully in the next couple of months, and this could add ½ point to third-quarter GDP growth. Moreover, some of the hit from higher energy costs is probably also temporary, as crude prices are down on net over the past three months. But the slowdown of recent months goes well beyond what can be explained with these temporary effects.

One piece of fresh evidence comes from the New York Fed’s Empire State survey for July, which showed another sub-zero reading for both general business conditions and new orders (see Exhibit 2). And while the Empire State is still clearly in mid-cycle slowdown territory, final demand growth has slowed to a pace that is typically only seen in recessions. This is illustrated in Exhibit 3, which shows that real final sales to domestic purchasers—that is, real GDP excluding inventories and net exports—has grown at an estimated rate of only ½% (annualized) in the first half of 2011. There is only one precedent for such a weak demand growth pace outside the immediate vicinity of a recession.

One key question in coming months is whether final demand recovers to the 2%-2½% pace that is probably necessary to keep GDP growth near trend and prevent the unemployment rate from rising more noticeably. Obviously, we have no hard information about Q3 in this regard yet, but Friday’s preliminary consumer sentiment index for July from the University of Michigan was highly discouraging. The index fell to the lowest level since March 2009 (!) and is now back in territory normally associated with a contraction in real consumer spending and overall final demand (see Exhibit 4). Admittedly, consumer sentiment does not have much forward-looking value, and it is possible that the extensive media coverage of the negotiations around the federal debt ceiling has depressed sentiment. If so, agreement on this issue—which we believe may be coming closer—could lead to a rebound in sentiment. However, we would probably need to see a substantial improvement to undo the dramatic message of Exhibit 4, and to avert further downgrades to our GDP growth estimates in Q4 and 2012.

Unfortunately, our confidence in the growth forecast remains relatively low. The “bugbear” is that we are still unsure about the precise reasons for the slowdown in 2011 to date, which is sharply at odds with our expectation at the end of last year that growth would accelerate in 2011. Logically, the explanation presumably has to involve a combination of a) unforeseen shocks from the Japan earthquake and the oil market, coupled with b) more vulnerability to these shocks, because c) the housing and credit market downturn is weighing on private-sector balance sheets for even longer than we thought. But the relative importance of these issues is exceptionally difficult to sort out, and it makes a great deal of difference for the outlook.

The weaker data on economic activity have clearly raised the probability of renewed monetary easing by the Federal Reserve. In his monetary policy testimony this week, Chairman Bernanke’s main argument against renewed easing was that inflation is now significantly higher than it was in the summer of 2010. Indeed, the core CPI for June released on Friday showed a pickup in the 6-month annualized inflation rate to 2.5%, clearly above the “mandate-consistent” rate of 2% or a bit less. However, we may well have seen the highest inflation figures. Exhibit 5 shows that underneath the surface, both the “median” and “trimmed-mean” indexes—statistically based measures of underlying inflation that may be preferable to the better-known core CPI—showed a notable slowdown. Therefore, we still expect core inflation to slow substantially on a sequential basis over the next year.

Moreover, if the economy returns to recession—not our forecast, but clearly a possibility given the recent numbers—Fed officials would undoubtedly ease anew even if inflation is close to their target. Indeed, Chairman Bernanke laid out the possible options for such a move in his monetary policy testimony this week, namely a change in the forward-looking language in the FOMC statement, a cut in the interest rate on excess reserves, and—last but certainly not least—an increase in the size and/or composition of the Fed’s balance sheet.

 

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Fri, 07/15/2011 - 21:52 | 1461454 baby_BLYTHE
baby_BLYTHE's picture

they're begging benny for more QE heroin 

Fri, 07/15/2011 - 21:55 | 1461459 HungrySeagull
HungrySeagull's picture

They know they want more, but how little is there to have?

Fri, 07/15/2011 - 23:26 | 1461602 66Sexy
66Sexy's picture

Goldman: they have the credibility of obama...

lips moving but dont hear what they sayin

Fri, 07/15/2011 - 21:56 | 1461461 Calvin Jones an...
Calvin Jones and the 13th Apostle's picture

But the market drop hasn't been all that much.  It probably needs to get below 11,000 before The Bernank even warms up the helicopters.

Fri, 07/15/2011 - 22:25 | 1461506 baby_BLYTHE
baby_BLYTHE's picture

agreed.

No way they launch it right away. They will wait, just like they did between QE 1 and QE 2.

I, however, expect QE3 to exceed $600 billion.

We will see generational high inflation rates within the next few years.

Fri, 07/15/2011 - 22:37 | 1461517 Id fight Gandhi
Id fight Gandhi's picture

Sure thing!

Goog, cmg, Nflx, lnkd all momo tech will keep soaring from Benny bucks!

Sucks To work a real job for money. If you can find one.

Fri, 07/15/2011 - 21:56 | 1461460 ghostzapper
ghostzapper's picture

but, but . . . . becky quick told us those greens shoots would be fully developed by now

Fri, 07/15/2011 - 21:57 | 1461464 Calvin Jones an...
Calvin Jones and the 13th Apostle's picture

The only green shoots are in The Oracle of Omaha's pants when Becky interviews him.

Fri, 07/15/2011 - 22:43 | 1461525 Helena Bonham-Carter
Helena Bonham-Carter's picture

There is ne'er a king christen could be better bit than I have been since the first cock.

Fri, 07/15/2011 - 22:46 | 1461532 foxmuldar
foxmuldar's picture

WTF? lol

Fri, 07/15/2011 - 23:38 | 1461623 slewie the pi-rat
slewie the pi-rat's picture

[Enter a Carrier with a lantern in his hand]

  • First Carrier. Heigh-ho! an it be not four by the day, I'll be
    hanged: Charles' wain is over the new chimney, and
    yet our horse not packed. What, ostler! 645
  • Ostler. [Within] Anon, anon.
  • First Carrier. I prithee, Tom, beat Cut's saddle, put a few flocks
    in the point; poor jade, is wrung in the withers out
    of all cess.

[Enter another Carrier]

  • Second Carrier. Peas and beans are as dank here as a dog, and that
    is the next way to give poor jades the bots: this
    house is turned upside down since Robin Ostler died.
  • First Carrier. Poor fellow, never joyed since the price of oats
    rose; it was the death of him. 655
  • Second Carrier. I think this be the most villanous house in all
    London road for fleas: I am stung like a tench.

First Carrier. Like a tench! by the mass, there is ne'er a king
christen could be better bit than I have been since
the first cock.

Sat, 07/16/2011 - 11:20 | 1462010 cosmictrainwreck
cosmictrainwreck's picture

ROFL.... slewie, ye have, prithy, out-done ye-self

Fri, 07/15/2011 - 22:38 | 1461518 Id fight Gandhi
Id fight Gandhi's picture

Only green shoots are the over grown grass on vacant homes rotting on the market.

Fri, 07/15/2011 - 21:57 | 1461462 ghostzapper
ghostzapper's picture

green*.  damn first post i flubbed it. 

Fri, 07/15/2011 - 21:58 | 1461465 caerus
caerus's picture

Triple top...wait for it...

Fri, 07/15/2011 - 22:02 | 1461471 ghostzapper
ghostzapper's picture

agreed. 

Fri, 07/15/2011 - 22:10 | 1461479 caerus
caerus's picture

Good man...

Fri, 07/15/2011 - 22:12 | 1461483 buzzsaw99
Fri, 07/15/2011 - 22:17 | 1461493 caerus
caerus's picture

lol..lthe colonel...with his wee beady eyes...

Fri, 07/15/2011 - 22:24 | 1461505 Troublehoff
Troublehoff's picture

why... won't ... this wig... come off :)

Fri, 07/15/2011 - 22:13 | 1461485 dick cheneys ghost
dick cheneys ghost's picture

"The “bugbear” is that we are still unsure about the precise reasons for the slowdown in 2011 to date, which is sharply at odds with our expectation at the end of last year that growth would accelerate in 2011"................

 

they are "lying" about "lying"......

Fri, 07/15/2011 - 23:21 | 1461593 Fazzie
Fazzie's picture

 Im going to pull a number straight from my ass. 1.2 % GDP.

 There, I did it and you didnt have to read a thousand words of deceptive psuedo-science and charts.

 My analysis (no pun intended) is better than Goldmans braniacs who just had to be be paid record bonuses or we would sadly lose their talents, and heres why.

 

 1) Its honest. I admit that its just a wild assed guess.

 2) Its more accurate than Goldmans original forecast, in fact any number from 0 to 4 has about the same odds of being as good as GS finest.

 

   Now wheres my 5 million in taxpayer subsidised salary and bonuses?

Sat, 07/16/2011 - 00:18 | 1461656 Sambo
Sambo's picture

In some dark smelly place...

Sat, 07/16/2011 - 01:36 | 1461732 cj51
cj51's picture

perfect. with y'all the way. btw, wheres my 5 mil.

 

Sat, 07/16/2011 - 12:08 | 1462056 The Real Fake E...
The Real Fake Economy's picture

well said Fazzie.  been making a similar argument for years.  

Sat, 07/16/2011 - 00:20 | 1461655 knukles
knukles's picture

Still unsure...

Still fucking unsure?

You have all of the fucking information needed, all of the finest systems at your disposal, you work a firm populated by the smartest guys in the world (own words, by the way, smartest guys in the world) you produce financial results so consistently grand that you'd best be the smartest fucks in the whole fucking world or knee up to your asses deep in material confidential non-fucking-public information and....   

           ... you're still fucking unsure?

Does this not then place all financial analysis produced and disseminated by you into the real of suspect.  If not able to produce a reasonably intelligent forecast, let alone a cogent analysis of past, historical events, should the reader conclude that the forecast is indeed reflective an otherwise hidden agenda, which might be promoting your own singular interests?

Oh never mind, because with no doubt, your answer would be that you're fucking unsure.

Sat, 07/16/2011 - 10:52 | 1461990 slewie the pi-rat
slewie the pi-rat's picture

well, you wouldn't want him to be wrong wouldya?

Fri, 07/15/2011 - 22:14 | 1461486 Troublehoff
Troublehoff's picture

I'm so sick of this BS.

Who thinks that a stress test indicating that several banks require more capital means anything in a world of FIAT.

'Capital' is pieces of paper allocated by misguided (at best) individuals. The banking system means shit.

 

I'm so sick and tired of this game. There are no rules in this game, just the rules that the fucking powerbrokers make up as they go along...and the markets still try to second guess, and factor, and speculate... but it's all BS...

 

There is no wonder. The space program is dead. Every fucking inch of this planet has been explored, and some of it might yeild commodities given investment. It's allready been bought and sold by the big coorporations, the human mind is sick and bored, and the exploratory spirit of mankind has been subverted.

Fuck this.

Sat, 07/16/2011 - 02:38 | 1461777 StychoKiller
StychoKiller's picture

I hear ya!  Remember these 4 wordz:  All things MUST pass.

Fri, 07/15/2011 - 22:16 | 1461487 Caviar Emptor
Caviar Emptor's picture

...blah blah blah earthquake in Japan....blah blah unusual weather patterns...blah blah those fat, lazy 'Merikans who refuse to shop on credit as they were programmed 

They won't have to push the Fed all that hard to get more juice. It's the only thing left supporting the whole financial construct, not just the stock market (which only reflects the anticipation of further monetary expansion). 

Last summer they were all rose-colored glasses about the economy. This summer they'll try to muscle the Fed by being gloomy. And when the U Mich reaches the low teens Ben will show up dressed as Mr Moneybags

 

Fri, 07/15/2011 - 22:22 | 1461496 nmewn
nmewn's picture

Please don't tell me I'm going to have to exchange "less than expected" for "bugbear".

It doesn't have the same "synergy" ;-)

Sat, 07/16/2011 - 00:47 | 1461613 Fazzie
Fazzie's picture

 All that nauseatingly boring high toned economic pseudo-scientific jargon they love to use when crafting their 100 percent wrong forecasts, is replaced with "bugbear" when proven to be horseshit.

  "Gee we dont know exactly why we were so off, bugbear ya know."

  The real bugbear is these shit for brains asswipes pulling in the millions for these useless forecasts and fully expecting the next forecast to be believed as presumably "bugbear" free.

Fri, 07/15/2011 - 22:22 | 1461498 RobotTrader
RobotTrader's picture

Don't worry, next week there will be a plethora of:

- Upgrades of chip stocks on "train is leaving the station" calls

- Forecasts of "V-shaped 2nd half recovery in tech spending"

- More "Extend and Pretend" for banks

- So many companies sandbagged their guidance, everyone will be "beating by a penny"

- Obama is definitely going to announce a huge stimulus or jobs bill

All this worry, yet the S & P 500 is less than a chip shot off its 3-year highs

 

Fri, 07/15/2011 - 22:24 | 1461503 nmewn
nmewn's picture

"All this worry, yet the S & P 500 is less than a chip shot off its 3-year highs"

Looks like another double top to me.

Fri, 07/15/2011 - 22:48 | 1461536 Dr. Engali
Dr. Engali's picture

On a longer term chart it's a clear head and shoulders.

Fri, 07/15/2011 - 22:38 | 1461519 foxmuldar
foxmuldar's picture

its too late for a summer jobs bill. Were still waiting for those shovel ready jobs from the first and second stimulus packages. lol

Fri, 07/15/2011 - 22:42 | 1461524 Id fight Gandhi
Id fight Gandhi's picture

There's plenty of shovel ready jobs. Look at all the shit laying around DC that needs shoveling.

Fri, 07/15/2011 - 23:37 | 1461620 Fazzie
Fazzie's picture

 Thats more of a backhoe job and they would hire illegals anyway.

Sat, 07/16/2011 - 23:15 | 1463095 InvalidID
InvalidID's picture

 HA!

Fri, 07/15/2011 - 22:40 | 1461521 Id fight Gandhi
Id fight Gandhi's picture

The wall St peeps will profit as the economy imploded. All the cash you can stuff away, and run to the hamptons.

Fri, 07/15/2011 - 22:42 | 1461523 Caviar Emptor
Caviar Emptor's picture

It's all on Ben. If "Austerity" becomes fashionable, there's nothing supporting the market. Only around 10% of volume is ever held overnight. 75% is "program trading" (read HFT bots trading with each other to give the appearance of "action") and the rest is day traders. 

Fri, 07/15/2011 - 23:04 | 1461565 The Grifter
The Grifter's picture

Huge stimulus will happen next week, LOL.

Triple bogey in the works for Robo coming up.   FORE!

 

Fri, 07/15/2011 - 22:24 | 1461500 Yen Cross
Yen Cross's picture

  Didn't GS cut the 2nd half to 2-2.3%? Even if the Q-3 numbers are so, they still undermine Chair Satans 3-3.5 % for the 2nd half... I love the White House /Wall Street divergence ...  Now we can see which side of the yield curve to play...

Sat, 07/16/2011 - 02:20 | 1461766 Libertarian777
Libertarian777's picture

Yee of little faith.we will have 4.2% growth. I read it in Owebama's 10 year budget projections. Our president would never lie to us! He's the king! If we just leave him and the bernak alone, their $16 trillion in deficit spending ... I mean investment, over the next 10 years will bring dividends. I mean look at Libya. Our investment there is sure to bring many dividends to shareholders of companies like lockheed martin, XE, Boeing and our other 'made in America' companies. Not to mention all the goodwill we're building over there. Our high precision smart weapons don't explode if they detect civilians nearby. In fact our latest generation weapons can read thoughts and the DNA of children and instantly determine if theynwill become terrorists. You know what they say, a fatherless child just becomes a terrorist when they grow up so best to get em while they're young.

Fri, 07/15/2011 - 22:44 | 1461528 foxmuldar
foxmuldar's picture

Unemployment remaining at 8.75 at end of 2012? I would like to think that if thats true, then hopefully it would be enough to get voters to send Obozo packing. However by then Obozo will have waved his magic wand and all the Illegals now in this country will be allowed to vote. Not that they don't already vote.

Fri, 07/15/2011 - 22:54 | 1461546 JLee2027
JLee2027's picture

Do you really the current unemployment is only 9.2%? They can juggle the numbers to say what they want, so yeah it's possible.

Sat, 07/16/2011 - 02:29 | 1461773 Libertarian777
Libertarian777's picture

Unemployment will be 6% and CPI will be 2.0% exactly.

The new methodology will be
1. Unemployment = number of people who have resigned from full employment / (number of employed + voluntary resignations)
2. CPI : basket of goods will be adjusted to reflect changing consumer habits. When oil reaches $200 a barrel and milk is $12 a gallon they will be excluded, because people will be walking to work and drinking water so no inflation there. Once water hits $12 a gallon, we will adjust the basket to reflect the lower water consumption since if you not consuming the same amount, then it shouldn't be in the 'consumer' price index should it?

Fri, 07/15/2011 - 22:46 | 1461530 erg
erg's picture

A first post here.

 

"Welcome aboard, I hope you like a fist in the eye."

 

Look, I'm already talking to myself.

 

Ben Berknucklehead

Ben Bernocchio.

 

The list is without end.

Sat, 07/16/2011 - 00:30 | 1461665 knukles
knukles's picture

You ever hear a tune in your head and pretty soon you swear everybody else is singing it too, even though you've been alone the whole time?

I'm still unsure about why everybody else who's not here started singing the same tune in my head.

Equally disturbing.

 

Sat, 07/16/2011 - 00:43 | 1461684 MobBarley
MobBarley's picture

You ever hear a tune in your head, start humming it, then turn on the radio

and there it is, at the exact bar you're humming?

Now the question is, is it that you're picking up the radio waves with

your body, or is your mind overpowering the universe into conformity

with your own thoughts, or is it that subconsciously you've always

known exactly what would happen where and when and you're gradually

growing more conscious of this having lived it all before thing.

http://www.youtube.com/watch?v=wXenEK0h6qg

 

Sat, 07/16/2011 - 00:46 | 1461690 erg
erg's picture

I did a bunch of gravol pills once upon a time thinking there were people in the room that didn't exist.

Sat, 07/16/2011 - 01:37 | 1461531 dognamedabu
dognamedabu's picture

Who pays for these thieves analysis? Even my 10 yo daughter says "Why are money centres such dumb dumbs daddy?" Meanwhile buddy down at the pension fund is going "Holy Fuck! I was fooled again. OK maybe this time they will be right." 

Fri, 07/15/2011 - 22:53 | 1461541 JLee2027
JLee2027's picture

"The “bugbear” is that we are still unsure about the precise reasons for the slowdown in 2011 to date, which is sharply at odds with our expectation at the end of last year that growth would accelerate in 2011"

This proves that a Wharton educaton has become cluster fuck useless. They can't lie worth a damn anymore.

Fri, 07/15/2011 - 22:56 | 1461552 High Plains Drifter
High Plains Drifter's picture

i got this crazy thought tonight. what if they supposedly cannot come up with a budget deal and they do this on purpose , and government checks do not get mailed out. what then?  civil unrest, which they cause on purpose. perhaps they may feel it is time to clamp down......etc.........i was of the opinion, that this would never happen. but i am thinking now, that it could and it might.......and it is allowed to happen for a reason......

Fri, 07/15/2011 - 23:08 | 1461570 web bot
web bot's picture

The United States of America has a retired army of what - 10 Million soldiers? ...all who have had weapons training, hand-to-hand combat training along with massive amounts of weapons and ammunition. An interesting fact, every American President that was assassinated, was done so at the hands of an ex Marine.

Once people believe that there is a threat to their way of life, watch out. The US government knows this - they won't toy with this, otherwise we're looking at massive civil unrest. The 60ies will be nothing compared to what would happen.

Black ops, Bilderberg, FEMA camps all plays into the revolutionary mythology of the US, but the failure of the debt ceiling or financial collapse, which could trigger social unrest is no laughing matter - and the government know it.

Let's hope cooler heads prevail or we're in for a rough time.

Sat, 07/16/2011 - 00:34 | 1461626 erg
erg's picture

MIAC report

 

Edit: Missouri Information Analysis Centre. It doesn't have a fancy name for nothing.

Fri, 07/15/2011 - 23:44 | 1461631 High Plains Drifter
High Plains Drifter's picture

well on the one hand, one would think they would be afraid of this. what if they secretly want it to happen or at least the people who control them? what then?  i think we spend a lot of time thinking that they will get this thing done. but what if by some small chance or whatever, they don't . what then?  it could be time for shtf , as soon as a few weeks from now. when all of the people who are getting government checks stop getting them, this whole country will dissolve into violence.......and in the eyes of some, this perhaps would be something they want. who knows.  maybe its time. i mean, its going to happen sooner or later. why not now?  they have everything ready. it may or may not go according to plan. but the new world order folks have waited a long time and are anxious to start ruling......

Sun, 07/17/2011 - 16:55 | 1464505 Prometheus418
Prometheus418's picture

I'm going to play Devil's Advocate here.  What if we look at this whole thing a little differently, and assume that the people who are supposedly representing us actually cared about right and wrong when they first decided to enter political life?  

If we run with that premise, it's not hard to see corruption being instilled in these people in incremental steps, with daily compromises and little blows to their integrety until one day they wake up, one by one, to see that all those little things that no one seemed to really notice or care about have somehow stacked up into a huge, flaming pyre of shit that used to be the country they loved.

And as they stand there and watch, they realize that they have to keep playing the game because they have given away everything they cared about, and trying to leave the belly of the beast will lead them to their death.

What could they do in that situation?  What would you do?  I know what my plan would be- I'd push the population to rebel, and hope to slip away in the chaos.  If I was between that rock and that hard place, I would want to lead, but knowing that I no longer could, I would force the hands of those around me, and place my faith at the feet of my countrymen, hoping against hope that there were still enough of Liberty's Sons to stand up against those who have enslaved us all.

How else can you explain it?  They're not bailing regular people out, because they are frankly waiting for us to bail them out with fire and righteous indignation.  When that dam breaks, they can run or they can try to turn 180 and join the rest.  

They are intentionally breaking the social contract, and forcing the equilibrium to shift.  They see the numbers, and run the games- no one is actually stupid enough to believe that they can control 300 million well-armed but starving people for long, especially with a volunteer army recruited from that same population.

Here's an example of the stupidity in action:

http://www.ci.minnetrista.mn.us/index.asp?Type=B_BASIC&SEC={E5C83C62-FE23-413E-A02A-96848ED931AE}

The effects of the government shutdown in Minnesota can't be anything but an intentional punch in the nose to its citizens.  Look at what it did to Joe Six-pack- they closed the parks, they took away his beer, they won't allow him to go fishing.  Was the government ever necessary for any of those things?  Sounds to me like they're picking a fight- on purpose.

This might be a push-back against the NWO- is there any better way that you can think of to rouse and mobilize a civilian militia than to start punching citizens where it hurts?

Or, the current meme might be spot-on, and the shadowy hand wants us to go to war.  Hard to believe, though- look at the men who came out of WWII.  It's not so easy to control someone who has seen and survived hell.

Sun, 07/17/2011 - 16:59 | 1464507 Prometheus418
Prometheus418's picture

Dupe.

Fri, 07/15/2011 - 23:01 | 1461558 Caviar Emptor
Caviar Emptor's picture

Even austere Republicans are in debt up to their eyeballs:

Newt Gingrich's presidential campaign is $1million in debt. Half that debt is for private jets. 

http://www.washingtonpost.com/blogs/post-partisan/post/newt-gingrich-is-the-1-million-man/2011/03/04/gIQAd6UmGI_blog.html

Fri, 07/15/2011 - 23:49 | 1461638 Fazzie
Fazzie's picture

 Austerity, like combat duty and obedience to the law has an opt-out clause for politicians.

Fri, 07/15/2011 - 23:17 | 1461589 slewie the pi-rat
slewie the pi-rat's picture

There is only one precedent for such a weak demand growth pace outside the immediate vicinity of a recession.

LOL---don't let it bite ya in the ass!

nobody coulda forseen this!  nobody!   what is extra-fuked is that, once again, the "experts and economists and banksters and politicians"  are wrong.   dead wrong.    no shit, think about it.  all these over-leveraged TBTF whales (in the vegas/atl city sense) bet the wrong  bull-shit.  again. 

but, consensus was...

uh...wrong?  again?  and it was the same people, basically, via the same media, who dreamed up and sold the consensus.  again.

now, they are gonna tell us how much it is gonna cost, and what they want us to do next.  like freaking vote for them?

groundhog day

and, we're at the place, now, where even the stag- in stag-flation may not be goobermint-guaranteed, anymore.

maybe if they gave themselves another round of raises and benefit increases things would improve.  again.

Fri, 07/15/2011 - 23:32 | 1461609 lizzy36
lizzy36's picture

Speaking of who could have predicted consesus was wrong again what ever happend to that "Wanger the US in growing like never before" character?

Fri, 07/15/2011 - 23:46 | 1461635 Fazzie
Fazzie's picture

 I miss and ol Harry, and Robotraders posts as well. Its a smokey and the bandit sort of thing.

Fri, 07/15/2011 - 23:40 | 1461627 john milton
john milton's picture

Goodby€ @ll mighty Doll@r and fi@t currenci€s

Fri, 07/15/2011 - 23:45 | 1461632 caerus
caerus's picture

Jesus I dare you to fight the market... Triple top....bitchez...

Sat, 07/16/2011 - 00:05 | 1461649 Hansel
Hansel's picture

Jesus knows Kung Fu.

Sat, 07/16/2011 - 09:19 | 1461925 caerus
caerus's picture

They're breakdance fighting!

Fri, 07/15/2011 - 23:46 | 1461633 caerus
caerus's picture

Double sorry

Fri, 07/15/2011 - 23:56 | 1461642 gall batter
gall batter's picture

it's karmageddon.

Sat, 07/16/2011 - 00:49 | 1461695 MobBarley
MobBarley's picture

It won't marshall law economic emergency under Oblama.

They have a woman handler picked out for yall.

Due in 2012.

Meme introduction, shock jocking the teleprompter,

comes the Palin for what's Ailin'.

You'll vote , assuming she won right, celebrate

then berate, car crash you'll accept, you let her drive,

social insecurity is just down to earthy and

soiled. Slow boiled, turmoiled and oiled up.

It will come to be like Mother Shiptons prophecy.

 

Sat, 07/16/2011 - 01:20 | 1461721 slewie the pi-rat
slewie the pi-rat's picture

really?  that doesn't seem so bad...

damn!  that's the same thing that happened w/ the last guy!

Sat, 07/16/2011 - 05:28 | 1461829 Mentaliusanything
Mentaliusanything's picture

 we are still unsure about the precise reasons for the slowdown in 2011 to date, which is sharply at odds with our expectation at the end of last year that growth would accelerate in 2011.

Bwahahahahahaha. What a load of Bullshite. They havn't got a clue about cause and effect. 

$5million ton those Bozo clowns is like totally a waste of paper

Sat, 07/16/2011 - 07:09 | 1461852 Silverhog
Silverhog's picture

Shades of the French Revolution. These elite can't get a real fix on what is happening with the peasants. So they hire more elites to make educated guesses for them.

Sat, 07/16/2011 - 09:39 | 1461932 Long-John-Silver
Long-John-Silver's picture

Time to Party like it's 1781.

Sat, 07/16/2011 - 08:05 | 1461880 SOLnow
SOLnow's picture

It never ceases to amaze me just how little grasp these analysts have on reality.  More amazing still...that someone would actually pay for this drivel.

Sat, 07/16/2011 - 09:33 | 1461928 Franken_Stein
Franken_Stein's picture

 

Les Hinton, CEO of Wall Street Journal and Dow Jones, resigns

 

Sat, 07/16/2011 - 10:01 | 1461950 geno-econ
geno-econ's picture

Great job opportunity for Bernie Madoff but timing on availability off a bit.

Sat, 07/16/2011 - 10:13 | 1461962 Lmo Mutton
Lmo Mutton's picture

"Below stall speed" is not that bad of a place to be. As long as u r paying attention and intended to b there.

What's that line about wasting a good crisis?

Sat, 07/16/2011 - 11:41 | 1462032 Milton Waddams
Milton Waddams's picture

The economy could grow in real terms, though it may not; it may also fall into a recession which may or may not provoke the Fed into providing more stimulus.  Here is a graph my assistant produced.  It is a reproduction of the exact same graph you can find elsewhere but using different colors.  And another, and another.  Can I have my paycheck now?

Sat, 07/16/2011 - 14:35 | 1462234 PulauHantu29
PulauHantu29's picture

My Econ 101 textbook says war adds to a false rise to the GDP.

So if we subtract all our war spending, what will the GDP really amount to?

Sat, 07/16/2011 - 23:29 | 1463116 AldousHuxley
AldousHuxley's picture

Goldman's real identity... Fiatman

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