So Which Is It: iPhone 5 Now Blamed For Q4 GDP Drop
It was only a month ago when JPM's Michael Feroli humorously predicted that Q4 GDP would be boosted by 0.5% due iPhone 5 sales, a comment which even the most clueless economists saw right through, and which we commented on as follows: "don't laugh: yes, US GDP, not that of China where the iPhone is actually produced, but the US where the consumer merely incurs more record student loans to be able to afford it." Well, in a prime example of goal-seeking data to fit reality, here comes that other quite humorous "economist", Deutsche Bank's Joe LaVorgna (recall that Joe is sadly a loser when pitted against the groundhog), who has come up with a slightly different solution: namely that the iPhone led to a drop in Q4 GDP. Step aside Bush, now everything (both good and bad) is the iPhone's fault.
The above is derived from his discussion of today's massive trade deficit surge, driven as we observed earlier, by a spike in imports:
The surge in imports was in the ex?petroleum goods category ($158.9B vs. $149.6B previously). In fact, the increase in imports was heavily tilted toward consumer goods, which rose $4.6B, and to a lesser degree by autos ($1.5B) and industrial supplies ($1.3B). Perhaps the release of the iPhone 5 is boosting the consumer goods category, as cell phones increased by $1.8B.
And since soaring imports lead to a drop in GDP, it means iPhone5 launch -> US GDP drop. In other words, when all else fails, goal seek any variable BS to fit your flawed model.
If there are still those who are confused by why the title "economist/strategist" is the most laughter-inducing of all on Wall Street, this should hopefully answer it.