So Which Is It: iPhone 5 Now Blamed For Q4 GDP Drop

Tyler Durden's picture

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.

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Cognitive Dissonance's picture

Hard as it may be to believe, the buffoonery has only just begun.

<We ain't seen nuttin' yet.>

GetZeeGold's picture



I blame it on Samsung really.

Skateboarder's picture

It's eventually Timmy Cook that will get the blame. "He took a company of immense power and secrecy and flushed it down the loo." Although we know that's not the case entirely.

LongSoupLine's picture

I agree Cog...


Hey, wait...I've a great idea!  Just mint a fucking Trillion iPhone 5 Coin.


Fuck, I could be Nobel eCONomist!

Lohn Jocke's picture

We need iPhones to be more elastic.

glenlloyd's picture

Well....with the discussion of a 'trillion dollar coin' I have to believe we're moving in the 'buffoon' direction.

Although I think you're right, we ain't seen nuttin yet...

WhyDoesItHurtWhen iPee's picture

I wonder if a 'trillion dollar coin'  bounces very high in a coin toss?

Xibalba's picture

Sure it's not gun related? (iPhone 5 leads to run on ammo?)

GetZeeGold's picture



You can buy an iPhone on any street corner.......ammo........not so much.

pods's picture

What about if you bought ammo FROM your iphone 5?


Cognitive Dissonance's picture

Working the problem. Please hold.

<Congratulations! You're just won an all expenses paid vacation to FEMA Camp # 382. No need to pack because everything you need will be provided during your extended stay. The bus is on it's way to your GPS coordinates at this moment. Enjoy!>

Nihilarian's picture

Not enough iPhone 5 screens have been broken...

geoffr's picture

The broken iPhone screen fallacy?

geoffr's picture

The iPhone is assembled in China. It's made all over the place, but mostly in Asia.

Acet's picture

Don't forget all the US input that went into the new iPhone, like all the R&D to create that 5th row of icons or all that US-based management know-how that went into choosing which Asian sweatshop is responsible for manufacturing which bit or into assembling the best possible compensation board so as to maximize management income.

This stuff is simply priceless!

AccreditedEYE's picture

In a world where they've made a "Geithner Model", why bother even getting worked up? Should we expect people to be held accountable or actual facts to move any given price? Just buy, just buy.

Water Is Wet's picture

You're trolling too hard.  Chill out.

AccreditedEYE's picture

Sorry. So f-ing sick of this bullshit. Sit around and wait for a "reality" that never and will never come. Idiots chat up yachts on CNBS while we have record numbers suffering globally. I'll calm it down a bit.

caimen garou's picture

so super storm sandy is out of the picture too?

ebworthen's picture

Nine months post Sandy it will be the spike in birth rate, and welfare rolls, and SNAP/EBT costs.

They'll milk Sandy for Home Depot and Lowe's too, saying people had to wait until Summer/Fall 2013 for good weather to fix and build.

Then, on the one year anniversary, the Moms will show up with the babies at memorial events and meet the out of town construction workers and there will be a spike in condom, wedding cake, and iPhone 6 sales (what with the new sexting/EBT/Chase combo app).

Dr. Richard Head's picture

I guess 128 million (over 40% of the population) receiving a government check just isn't enough.  Paper brings propserity, so we have that going for us. 

NotApplicable's picture

"Well, ain't that America?"


francis_sawyer's picture

So [to Paul Krugman]... Are we supposed to break our fucking iPhones & order new ones, or NOT?... Make up your goddamned mind!

TWSceptic's picture

First aliens have to attack Foxconn, then break the iphones. Jeez do we have to explain everything?

francis_sawyer's picture

Fuck man... I don't have a PhD... I'm just trying to keep up...

lizzy36's picture

Can`t believe a silly trinket like an iphone can have this type of influence on GDP. 

Further evidence that majority of yanks are merely sheeple who want the latest status symbol that will help them be identified as wealthy and hip. 

Bernanke wins, he wants you consuming and indebted. 

ParkAveFlasher's picture

Yanks only?  Because the Brits don't live under an even greater oppression, right?

fuu's picture

"Can`t believe a silly trinket like an iphone can have this type of influence on GDP. 

Further evidence that majority of yanks are merely sheeple who want the latest status symbol that will help them be identified as wealthy and hip."

Or the GDP calculation is hopelessly FUBAR'd and gamed like everything else.

Acet's picture

It's very simple to boost GDP numbers by understating official inflation figures.

Nominal GDP is calculated in dollars but inflation means that the same things translate to more dollars each year, so the nominal GDP is corrected using official inflation numbers to produced the real GDP which is then published.

If the official inflation figures are fiddled to be less than real inflation then the result is that the nominal GDP is corrected down by less than the amount needed to offset dollar devaluation from inflation, so published (supposedly-) real GDP figures will be pumped up by inflation. The result of this process is then sold to us by the media as GDP growth.

This seems to be the case at least in the US and UK - people are seeing much higher increases in cost of living than official inflation figures, multiple people complain that official inflation calculations understate the real inflation suffered by people and meanwhile central banks are creating more inflation through money printing. GDP figures for both countries are almost certainly significantly overstated and most likelly in reality their GDP is not growing at all.


AlaricBalth's picture

"Nothing, therefore, needs to be more emphasized than the warning that we should not, like sheep, follow the lead of the throng in front of us, travelling, thus, the way that all go and not the way that we ought to go. Yet nothing involves us in greater trouble than the fact that we adapt ourselves to common report in the belief that the best things are those that have met with great approval, – the fact that, having so many to follow, we live after the rule, not of reason, but of imitation. The result of this is that people are piled high, one above another, as they rush to destruction. And just as it happens that in a great crush of humanity, when the people push against each other, no one can fall down without drawing along another, and those that are in front cause destruction to those behind – this same thing, You may see happening everywhere in life. No man can go wrong to his own hurt only, but he will be both the cause and the sponsor of another’s wrongdoing. For it is dangerous to attach one’s self to the crowd in front, and so long as each one of us is more willing to trust another than to judge for himself, we never show any judgement in the matter of living, but always a blind trust, and a mistake that has been passed on from hand to hand finally involves us and works our destruction."


orangegeek's picture

Yep - more moronic reasons as to why something is happening.


These lumps have to come up with reasons to justify their day jobs.


Dow Jones Daily got its jump yesterday.


More earnings reports please - let's see how long they will hold up - Ben and Barry must be buying up everything they can these days.


US Government owns NYSE and NASDAQ - now that would never happen.  Would it?

ParkAveFlasher's picture

Looks like $1650/$30 au/ag floor has been re-established.  As the Irish say, slainte!

orangegeek's picture

US Dollar is being pushed down hard, but the markets and gold aren't responding in the opposite direction.


Euro has been rocketing too (broke May 2012 high) - still markets are failing to respond.


If the USD were to turn back up ...

busted by the bailout's picture

Hark, I hear the faint giant sucking sound of globalization.

HeatMiser's picture

That's not what you hear its the FAKE FLU EPIDEMIC. The MSM propaganda says the economy is fuck up because of the FLU.

kridkrid's picture

Too bad Perot was a fraud and threw the "debate" on NAFTA... Not that it matters much...our fate was sealed long before Ross Perot.

Joe Davola's picture

See Larry, you cut twice, measure once, then go on some call-in show with prearranged calls to talk your book.

NotApplicable's picture

He seemed such a promising CIA asset too! Certainly made for an interesting horse race (back when I was still of the idiotic "WE have to do SOMETHING!!!" mindset).

krispkritter's picture

That's actually Geithner with his editor. He's 'working' on getting a bigger book deal...

Gamma735's picture

When your big innovation is a slightly larger screen and moving the headphone jack to the bottom of the phone, you are out of innovation.

kridkrid's picture

Don't forget the "do not disturb" feature. Remarkable.

pods's picture

Don't forget the 5th row of icons!

You can now piss away time 20% more efficiently.


Joe Davola's picture

Who needs that, when we've got ZH!

NotApplicable's picture

God forbid one have to scroll to the next screen. Just think of the reduction in healthcare costs not having to treat all of those RSI cases!

Then again, that will reduce GDP...

pragmatic hobo's picture

what this is saying is that the trade-deficit ex-petrol is mostly meaningless.

AnAnonymous's picture

a comment which even the most clueless economists saw right through

'Americans' usually see through their propaganda.

'Americans' usually assess the potential of the propaganda, whether they can monetize it etc

'Americans' are addicted to cheap propaganda.

So when an 'american' turns down a propaganda bit, it means a lot on the quality of it. A lot.

But most of the time, 'americans' are aware of propaganda and fantasy. They are simply unable to operate without it. Quite different.

When you meet a strongly addicted to drugs, looking for a fix for months and that it turns down your stuff, the stuff is merely not good.

kridkrid's picture

You give Americans WAY too much credit. Most Americans remain remarkably bliss and unaware, I believe.

NotApplicable's picture

Bliss is being replaced by stress, as the facade continues to give way, exposing its holder to the reality of their own cognitive dissonance. So they seek out new forms of escapism, such as blaming everyone else for their fucked up life.

So, unless still safely comforted with wealth to support this insanity, awareness is coming, whether they like it or not.

Well, until that's all fixed with wars. Lots and lots of wars.

I think our environment is the political equivalent of the old saying, "Don't stick your dick in crazy!" It might start out as the most exciting thing ever, but the price to be paid in the end is never worth it.