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Morgan Stanley Finally Folds, Lowers H2 GDP Forecast From 3% To 2%
The firm that was long the biggest bull on Wall Street, Morgan Stanley, with its initial 5.5% target on 10 Years by the end of 2010, has finally folded: "We are downgrading our outlook for second-half growth to 2-2.5% from 3-3.5% previously. This downgrade from above-trend to below-trend growth has important implications for forecasts of the unemployment rate, inflation and monetary policy." Ostensibly it also has implications on rates, with the firm now actively calling for a flattener, just in time for the 10s30s to start creeping out again. Of course, this being Morgan Stanley, nothing is ever easy, and the firm obstinately refuses to see the plunge in H2 GDP as anything more than just a temporary blip: "we don’t think this slowdown will last beyond H2, much less morph into a downturn. In his Jackson Hole speech, Chairman Bernanke seemed to agree that the current economic weakness does not augur a weaker outlook for 2011. We agree. Among the reasons: Downside risks probably will prompt policy actions, balance sheet repair will be more advanced, and we expect net exports to improve in the second half of 2010 and into 2011. In fact, we see no reason to downgrade 2011 and possible reasons to upgrade, especially if policy turns more stimulative." Ok, Richard Berner, your colleague Jim Caron's rates call already lost a ton of people even more money : we will be sure to remind you of the bolded statement on January 1, 2011.
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Have they really thrown in the towel expecting +2.5%?
I think they are still clutching their security blanket (towel).
RALLY TIME!
That just HAS to be great news for equities! 400 points on the DOW by noon on Monday!
Sounds like more Tinkerbell fairytale accounting standards changes will appear for the FASB marked-to-myth beaners, of course headed and instructed by chief beaker Geithner himself.
The pussy needs to got to jail. Meddling with taxpayer dollars to keep bankrupt institutions afloat that your buddies run is downright fraud.
Loser.
Close to 300 bp error in their 10 yr treasury forecast is a joke. Perhaps the biggest in history of interest rate forecasting n a 1 year period. They deserve NO Bonus and are lucky to still be employed. What ever happened to pay for performance?
OMFG. They are insane.
This has *got* to be a "go for broke" where they don't actually believe it (like estimate-up-revise-down reporting by all government agencies). However, I concede truly clueless idiots with strange world views (like "gotta leverage-more Krugman") seem to actually believe their own glue fumes.
http://www.youtube.com/watch?v=GeI5ke0BENw
"looks like I picked the wrong week to quit...."
I love the smell of mind numbing revisions in the morning.
translation:
"If we chose to believe otherwise we would not maintain our employment, social cache, and living standards. With no other option but to continue on this route, we will continue to oversell optimism to our clients who are suckers, and include veiled language to our top tier clients who understand the underlying crises. No one and no competing power structure has yet grown in strength to challenge our complete control over the financial sector, so as of this writing we will continue to sell you the American Dream as it is the path to the precipice of your fear that is inversely proportionally valued to whatever I pretend to analyze at exorbitant fees... "
The SWOF rally in Washington DC has over 500k in attendance, and over 100k viewers watching streaming through Ustream....
Glenn Beck and Sarah Palin .... sigh
At least the apathy is dissipating....
Livestream;
http://www.ustream.tv/restoringhonor#utm_campaign=flive&utm_source=1&utm...
litoralkey:
Do you have any proposed alternatives?
Beck has gone way out on a limb, kinda' like we expect entrepreneurs to do. Succeed/fail all on his shoulders, as he acknowledges. And he's been through the fire.
- Ned
GDP, ELP ( Karnevil 9 First Impression ), Who gives a fuck?? The Fed dont give a fuck.. The Fed is here for one reason and one reason alone... To transfer money out of our pockets into the stock market. GDP? Thats nothing but a harvard term that meant something at one time. Bernanke knows the economy sucks and will do everything he can to improve the Stock market..I mean The economy. Same thing.
No, no, you don't understand - if the consumer becomes 1% of total GDP instead of its current 70(ish)% and the Government becomes 99%, then we're all saved. The Government can borrow as much as it wants via Fed printed money and GDP goes up infinitely. Solved!
DavidC
Thats what Arthur Jensen and i been saying all along. There is no economy, There are no nations, There are no peoples, There is no West. There is only AT&T, IBM, Exxon, GE.
"But ultimately what the bailout does is help those who are concerned about the healthcare reform that is needed to help shore up our economy." —Sarah Palin, explaining the $700 billion government bailout of Wall Street to Karie Couric, CBS News interview, Sept. 24, 2008
I think that America's problems are not with Congress or the Fed or government but with people who vote for people like Palin. How do I vote for new voters?
Become an ex-pat.
I think that America's problems are not with Congress or the Fed or government but with people who vote for people like Palin. How do I vote for new voters?
Get over yourself athena. Back to huffpo you go.
Whenever I see something like that I laugh before I fly into a fit of rage. It's most likely an Obammy voter.
Here is someone, who given two real choices (as ugly as they were), didn't vote for someone who at least served with honor & dignity and attempted to do the right thing, however missguided...like campaign finance reform and a running mate with actual executive level experience.
No, they voted for a social worker, a junior senator, from Chicago of all places. With 180 days experience at the national level. Who was endorsed by the nations enemies. Who picked Joe Biden...LOL...to be a heartbeat away. Who made no bones about picking Larry "Where's My Pillow" Summers as his financial advisor and entertained the idea of picking Paul Krugman. Who appointed a communist as Green Czar. Who appointed someone under investigation for pension fund kick backs as Car Czar.Who appointed a Safe School Czar who most parents would mash into a goo if he came within 10' of their children. Who appointed a tax cheat as Treasury Secretary. Who appointed a scorned, carpetbagging former First Lady as Secretary of State and a Secretary of Homeland Security who's first instinct is to blame America's veteran's.
Barry ran an entire campaign based on a cartoon character...Can We Do It? Yes, We Can (Bob the Builder cartoon). Who lies so poorly he's an embarassment to budding potential liars everywhere and seems to delight in making a fool of himself by taking one vacation after another as unemployment rises and sparring with Supreme Court justices who, somehow, still, have enough dignity & decorum that they would politely decline his offer to intern for them or sweep their walkway.
Another thing.
If I hear one more time about how Boomers have screwed the pooch from Gen-Xer's, Y-er's I will personally remove what's left of their brain and give it to some poor child in Tibet that they are always sqawking about. If they were not so busy holding their pant's up while texting, getting their eyebrows, nose & nipples pierced in between tatoos of peacocks on their asses to actually investigate who the fuck they are voting for we would all be in a better position. If Boomer's suck so bad move out of their basement, get your own place and pay the damn taxes...parasites.
There...I think I'm done.
dude, cleansing breath.
Saul is sleeping cold with his idol. all is good in their world.
We can't cure stupidity, but can make their stupidity clear to all; almost working here after Scott Brown's (our) win.
imho a lot of the excess going to burn off. I was in Chicago this week, everyone on the street (exagete, you get it) had a cell phone in her ear. Me: eyes on a swivel. Now I understand Michelle's anti-fat program-everyone she knows needs a spa.
I'm encouraged with many things I'm hearing, up here in blue MA-a lot of realization that "shoot, that ain't right."
- Ned
(OT, when did the Blue-Red thing switch? MSM did a number on us without any comment.)
Heh.
"when did the Blue-Red thing switch?"
We're all purple now bro ;-)
You see where Rick Scott won down here? Dem's are going to have a field day on his corrupt carcass. At least we got Rubio...that's the big picture.
redneck scum
Obama is an asswipe but Palin, McCain, Rubio and the rethuglicans are worse.
I can't wait for the collapse.
"redneck scum"
Perhaps someday we'll meet under more ideal circumstances.
"I can't wait for the collapse."
Bring your asshat & water pistol so I can recognize you...LOL.
Sarah "GILF" Palin ("Governor") is a moron.
I was thinking on just why the US govt. came out with 2010 2q GDP revision down as they did. The revision was down from 2.4% (which is bad) to 1.6%, with an expected of 1.4%. Now why in the world would they be stating "Summer of Recovery" at the same time revising down GDP???? (Technically, we "are in a recession" because of the unofficial "2 consecutive quaters of negative GDP" has occurred. I wonder why no one is talking about this?)
Why indeed!
My prediction for next 3q 2010 GDP estimate is that it will be 1.8% and r3vised to 2.0%. Why? BETTER THAN EXPECTED and they can extend and pretend a bit longer. I think that GDP 3q 2010 will be negative, but the only constant in this equation is that the US government lies and is in CYA for the TPTB.
Any thoughts?
Cause Dick Fuld learned a painful lesson. If you're going to be making bear taco's for lunch. Season your beef.
http://verydemotivational.com/upcoming/?pid=8466&from=recMap1
'Negative GDP' does actually require a minus sign, not simply to be less than the previous quarter. (So whilst you're probably right that Q2/Q3 will be the start of a new 'technical recession', no one will be talking in those terms until the revisions punch the current fakes down below 0%.)
Officially we have not exited the recession, per the NBER.
http://www.nber.org/
Without any sustained job growth, its will be interesting when/if the NBER gives an end date.
I want their job--predict events like 9 months after they have occurred. - Ned
Wow! Two percent growth for H2? Talk about staring at a half-full glass of water through rose-tinted lenses...
More like a drop of rose-tinted water before it hits the hotplate below.
*pfft!*
Gone.