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Joe LaVorgna Goes From Perpetually Last To First, Cuts Q2 GDP Ahead Of Everyone
Joe LaVorgna needs no introduction: the Deutsche Bank (not pronounced Döuche Bangk) "strategist" is easily the posterchild for Microsoft Excel's goalseek function. As such, he is rarely if ever mentioned among the first 26 tiers of economc analysts (one needs to migrate to Hex from ASCII to catch a reference), as his goal seeking tends to take place only after given the green light by Goldman, Morgan Stanley and BofA (in that order). Which is why it does not surprise us that the strategist has had enough and is now valiantly punching through to the front of the line. The permaungloomer, who for the longest time saw the physical silver lining in the mushroom cloud, has just submited his application to the big boys club by being the first to cut Q2 GDP (and yes, he also finally cut Q1). That said, as expected yesterday, look for everyone to do the same as the hockey stick in US economic activity (once again) fails to materialize.
From Joey LaVorgna:
Commentary for Thursday: The March retail sales report was solid. However, February business inventories were weaker than expected. The net effect is less output last quarter than what we had been forecasting. Consequently, we are cutting our Q1 real GDP estimate another half of a point to +2.8%. Remember that we started the week at +3.8% on Q1 real GDP and then lowered it to +3.3% following weaker than anticipated net exports. We also decided to trim current quarter output by half of a point as well, reducing our forecast from +4.2% to +3.7%. Rising inflation is lowering real output, and the risk is that we may have to trim our second half forecast as well. But for now, we are keeping our Q3 and Q4 projections at 4.1% and 4.3%, respectively. The net effect of the first half 2011 GDP reduction is 0.3% less 2011 Q4 over Q4 growth—we are now at +3.8% versus 4.1% previously. In general, we remain upbeat on the outlook and do not want to make dramatic changes to our forecast. Why? The labor market finally appears to be on the mend, and provided jobless claims stay below 400k in April, we should expect to see the third month in a row in which private employment topped 225k. And, the fact that consumers continue to spend at a reasonably healthy pace is consistent with improving job and income prospects. This was the message gleaned from the March retail sales report which suggests consumer spending grew at least 2.5% in inflation-adjusted terms last quarter, down from Q4 2010’s +4.0% showing.
With respect to the retail sales data, March sales rose 0.4% as autos (-1.7%) were a drag on the headline. Ex autos, sales were up 0.8%, and the gains were broadbased in key discretionary areas of the economy such as furniture (+3.6%), building material (+2.2%), electronic (+2.1%) and restaurant (+1.0%) sales. As expected, high gas prices had the effect of boosting gasoline sales (+2.6%). The only other categories posting declines were miscellaneous (-2.1%) and non-store retailers (-0.3%). Upward revisions to core were particularly large, as auto sales were revised up 0.3% in January to +0.9% and +0.4% in February to +1.1%. The fact discretionary spending remains robust in speaks to the resiliency of US consumers, and an improving labor market should reinforce this backdrop. —JL
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Market is probably going to open up at the lows and then go straight up. It is not likely to see the SPY down 6 consecutive days.
You MIGHT be right, Robo. I think the pain is going to be in the NASDAQ today...and the Roach Motel [SPY] tomorrow. Of course, if 1300 breaks...all bets are off and the freakin' zombie stories will probably start popping up on Drudge.
So are you "fully invested" in this market yet, Robot?
Well there was about a minute of 'straight up', not so much now.
S&P was up yesterday so you've already got your up day for this week. Not sure why SPY does not track S&P performance. Another bankers' scam.
Amazing that anyone would bother to read, let only pay, for this garbage....
they only "pay" with other people's commissions, and there's a reason they call him 'crazy joe lavorgna'
It's fitting he is working for the most dangerous banker in the world...
http://www.spiegel.de/international/business/0,1518,757028,00.html
(for those that haven't seen this already...)
Anyone spending anything is just a reflection of extra walkin around money due to no one paying their mortgage any longer. Certainly they can not claim is due to more people having jobs or higher pay!
Let the insanity begin.
Buy 'em. QE3 baby! Who cares if gas is $5 gas by memorial day? Nothing can cause the sell side to take down 2011 estimates.
And the staring contest begins. At least until the next round of QE. If there are contrarians out there, they certainly are not talking now.
hedge accordingly.
Are these popular GDP predictions corrected for inflation? Official CPI or what?
The last time Obama went to war with Wall Street, the biggest of the taxpayers, the market sold off hard: http://www.hedgefundlive.com/blog/thursday-market-expectations-jamie-dimon-gave-us-a-hint-today
I shuda had more faith in my own topcall.
The two day mini bear market may not be over.
I am seeing a major shift from inflation focus to deflation focus.
I am probably going back to cash and taking my 1.5 percent estimated loss for this round.
Tyler, Thanks for the Hexadecimal Reference in this (now) inferior ASCII world.
obama will help
http://online.wsj.com/article/SB1000142405274870373010457626091198687005...
Joe is a loyal Deutsche Bank employee.
He knows that the to keep his job he has to believe that the Germans actually won at Stalingrad.
Another graduate of the Henry Blodgett Institute, majoring in stock market propaganda.
Posted in error.
We'll see. As more and more Bulltards step up to the plate to take a bite out of the polyanna pie, then get blindsidedly bitch-slapped by the reality of the ponzi, I suspect they will scurry to get their tails out from between their legs and head for the nearest exit. JMHO....
Never underestimate the stupidity of pension-money-funded, momo-minded hedge fund managers. No high is ever too high for the fools to buy in at. Jimmy "BUYBUYBUY"Cramer being the poster boy.
As long as the Euro, gold, and oil don't crash from here, we are probably going to see a violent V-bottom reversal.
Another one?
Lots of that going around.
Bravo Tylers!
Didn't you just bust Joe L.'s b-alls yesterday about being a follower?
No Sell Sider wants to get on the ZH shit list!
This guy is one of the biggest PIMPS ever on tv. A complete sellside sellout asshole. His opinion is worth the tp he can stick where the sun don't shine.
Didn't Jim Rogers state that he is/was 'short the NASDAQ?
Joe Lavorgna is a worthless twit.