Following a barrage of letters from sellside "economists" who used the strawman of lower gasoline prices as the catalyst for either keeping their Q3/4 GDP projections, and in some cases even hiking them, we wonder: after looking at the chart below (which shows the price of NY gasoline), are we going to get some tiny, very modest retractions?
We doubt it. After all, the new strawman for GDP growth will be that Greece now has to tear down and rebuild its partially burned finance ministry. Just think of the externalities to a interlinked, globalized economy. One decrepit building in downtown Athens has to be worth at least 25 basis points to US GDP alone.
And most ironically, after destroying Morgan Stanley's rates desk in the past two weeks, the 30-5 breakeven compression trade is now set to make someone else rich. Alas, it will not be Morgan Stanley.