Bad News Is Good As GDP, Claims Miss Pushes Futures Higher; Five States' Data "Estimated"

Tyler Durden's picture

Update: so much for the kneejerk reaction sending futs higher on the bad data: USDJPY dragging everything down now.

Just when there was some concern that the US economy was no longer imploding at the usual pace, we get confirmation that nothing is actually better, following the one-two punch of weaker than expected Q1 revised GDP data, printing at 2.4% on expectations of an unchanged 2.5% print driven by a revision in Private Inventories (from 1.03% to 0.63% of total GDP, offset by a plunge in imports sliding from -0.9% to -0.32%). Personal Consumption posted a tiny increase from 2.24% to 2.40% which can only mean the consumer overextended themselves in Q1 - perhaps it is about time to ask the question of how consumption in the "sequester" and tax-hike quarter was the highest since Q4 2010. Additionally, initial claims increased from the as usual upward-revised 344K to 354K, on expectations of a 340K print. But fear not: what both these data points showed is that any fears that the monthly Fed flow may slow down from the $85 billion monthly to a ghastly $75 billion or, heaven forbid, a tiny $65 billion monthly increase in the Fed's balance sheet, may be deferred. End result: futures jump higher. Because it is a Bizarro Ben, or Benzarro for short, market after all.

GDP broken down by components:

As for claims, the holiday-shortened week prompted the Labor department to 'estimate' claims from 5 states (Virginia, Wyoming, Hawaii, Minnesota, and Oregon). The 354k print is a miss from expectations of 340k for the worst combined 3 weeks in over 2 months. The gentle downtrend of claims appears (though noisy) to be finding a limit here as the 4-week-average ticked up yet again. The total number coollecting benefits rose by 63,000 to 2.99 million. California topped the initial claims list.


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Terminus C's picture

Es' tim' a' tion...

The new normal: we make shit up as we go, and you will be bullish.

GetZeeGold's picture



Bad is good. Wrong is right. Up is down. Black is white.


Welcome to the dope show.

Stuck on Zero's picture

Yep.  This is just out from Goldman Sachs.

Keep Buying Equities



EscapeKey's picture

I believe the full line should have been

Keep buying equities... we're selling.

King_of_simpletons's picture

Fools gain legitimacy thusly. Then, New Normal begins. Age of Idiocracy sets in.

FL_Conservative's picture

Futures might be up on the GDP/U-3 releases, but I think the S&P will finish the day down.  The bull energy is rapidly decreasing in this market.  IMO, the set up for a significant decline is in place.  It's like the smell of rain that is approaching.

LawsofPhysics's picture

Yes, the "smartest people in the room" need to find the greater fool.  Remember it isn't a "profit" until you sell.

The time bomb continues to tick as the yield on the 10-year treasury bond has been above 2.0% for far too long;

kill switch's picture

Bad news= QE injection continues,,,,nothing to see here move along move along..

spine001's picture

Translation--> Sell, Sell, Sell...

Headbanger's picture

Here's Cramer's sound board for the full effect:

PiltdownMan's picture

Great. Consumers borrow more, save less. and commercial construction spending crashes.


Good news? Not according to this guy.

WayBehind's picture

Most jobless are no longer eligible for unemployment benefits so they dont count. ... the number will continue to decline ...

IridiumRebel's picture

See then? The number is getting lower so we are doing great!

Offthebeach's picture

Just finished remodeling a house. Client is ancient, and retiring in a month from the US Census. He says the survey's are junk. GIGO. The field staff are lazy, lying hacks. Imagine the performance of the post office, only they don't deliver mail.

Silveramada's picture

10 yrs Boom bonds, japan bonds ready for explosion...captain benny and co just jumping in the safeboats...

otto skorzeny's picture

CNBC shitheads are blaming GDP miss on sequester.

GetZeeGold's picture



Did they happen to mention we need a sequester on steroids if we have any chance of pulling out of this crap?

Lendo's picture

We're not paying it back.  It's mathematically impossible with the government we have.

If rates go up to just 1% we default..

GetZeeGold's picture looks pretty bad. Just don't do something stupid and try to save yourself by purchasing precious metals.

Lendo's picture

LOL, people get so upset when I talk about buying ammo and junk silver.  So I kindly remind them that Bartertown doesn't accept fiat anything.

spine001's picture

To help all of us think. My advanced finance professor nicely demonstrated to us that debt from a solvent company is NEVER paid back, unless the company finds it advantageous to do so. Therefore, it is a given that a Country will never ever pay back its debts. The way to think about it is cash flow. Can the US generate the cash flow necessary to service its debt, while still servicing it? That is the question, only focus on how much gets in versus out. The total amounts are meaningless, thus the focus of economists to look at debts as % of GDP, which is NOT the correct measure, only a false (in my mind) approximation.

Until next time,


DeadFred's picture

You should say that a bit louder. From the price action today it looks like too many people missed what you said. For those who like to gamble weekly options to take advantage of the jump from 50 to 62% retrace of the May decline look good to me. But what do I know?

autofixer's picture

I guess economists did not know to factor the sequester in?  CNBS is a bunch of boneheads.

Dr. No's picture

Well, I do believe sequester resulted in a loss of 100M jobs.  So a small decline in GDP would be expected.... 

t0mmyBerg's picture

Well at tleast your number is less than the total population of the US, and probably even less just barely than the total WORKING population of the United States.  For a second I thought you were going to pull a Pelosi and claim that the sequester resulted in the loss of 500 Million jobs.  Btw, the acidly dripping sracasm of the main article above is just plain awesome.  I almost burned myself reading it.

Dr. No's picture

500M or 100M, Pelosi and Maxine Waters battleing for biggest headline I guess.

ekm's picture

Let me copy/paste the following again. Please remember to disregard all government data including Federal reserve data or Federal Reserve meeting notes.

They are all propaganda.



My recommendation:

Enjoy the weather.


Summary of the current situation:


This thing will collapse by presidential executive order only under the following reasons:


1) Multy country currency swaps, thus dollar being avoided

2) Crude oil price

3) Primary dealers infighting as to who's going to survive, unless they manage to lure in pension funds and insurance companies

4) Big lobby inflighting as to who's going to suffer less from the collapse.

5) Iran/Syria attack


Reminder: The gov is a product of elite infighting. The president deals with winner. Right now Pharma and Big banks are winning whereas Big Oil and probably Military Industrial Complex are losing, but gov civil war is not over.


So, again

My recommendation:

Enjoy the weather.


Until those guys settle the score, nothing's gona happen

t0mmyBerg's picture

You know, for any other President to be incompetent and out of touch and failing to do his job when Americans died it would be explosive.  But this pretender channels Reagan in the following way:  Teflon.  I hope we can get rid of him through non-violent means.  That would be best.

ekm's picture

The article is from a military man, not anonymous.


"They" are going after the president, IMO.

Military in counterattack.

LawsofPhysics's picture

While consistent with what I am hearing from myfriends who where former black operatives, unless you know precisely what percentage of the military this is and what their secure resources/assets are, you are talking out your ass.  You can't fix stupid, and there are many sheep among the military ranks, CIA and FBI that still serve the fascists "leadership".

ekm's picture

Fully agree.

100% of people talk out of their ass 100% of the time.



spine001's picture

Again, eventhough you are correct in theory, you are forgettin the fractal nature of the system they are attempting to control. What this means is that they are not able to decide when, unless they trigger it on purpose, which is possible but unlikely as you say. The system by itself will get out of control, it is the nature of the beast.

You may want to read "A new kind of science" by Wolfran

They are loosing control right now as the gyrations of the market demonstrates.

Until next time,


ekm's picture

I agree with you.

I've never ever ever said they'll be able to control it forever.

They will until........they can't.


And I actually think that we're quite close to the ...."can't"....phase.

Offthebeach's picture

The " They, The System, Gov" will not only survive, but prosper. Look at German gov and crony " private " institutions from Bismarck forward. German sheeple? Not so much.
Ditto N Korea, .... The State survives.

Tsar Pointless's picture

EOM ramp in progress. Please do not disturb the bears. They're already disturbed enough with all of this bull.

fonzannoon's picture

But the taper...but the taper.....

IridiumRebel's picture

the horror....the horror....the horror

GetZeeGold's picture



Someday this war is going to end....

surf0766's picture

Global cooling caused this. The second coldest spring ever.

Please send your taxes in.

buzzsaw99's picture

Whether it gets hotter, or cooler, it is still caused by man made global warming. Didn't you get the memo on this?

Yen Cross's picture

     Come have eggroll at "Shity Wok Cafe". I can even lay down for 3-4 hours of sleep without some B/S algofest, blowing out the overnight gains in my trades. Bernanke probably has a smile from ear to ear. This will keep the hawks off his back for another 2-3 months.

      The yields are creeping higher in Spain and Italy again. Their 10s are both over 4%, and the auction results were nasty overnight.

02:10       EUR             Italian 10-Year BTP Auction     4.14%           3.94%      
02:10       EUR             Italian 5-Year BTP Auction     3.01%           2.84%    

IridiumRebel's picture

you don't sleep much, do you?

Yen Cross's picture

      Got to get when the getting is good I/R. Lots of volatility in F/X right now. I'll make up for it over the W/E.

kito's picture

weaker than expected Q1 revised GDP data, printing at 2.4% on expectations of an unchanged 2.5% print.......


.....i guess the govts and corporations arent promising enough money towards pension fund contributions.......................

css1971's picture

Know what should be done? Increase interest rates. That'll make it all better.

Winston of Oceania's picture

Actually after a bit of pain it would...