Final Q1 GDP Is A Huge Miss, Personal Consumption Craters

Tyler Durden's picture




 

Remember the key component of the Fed's baffle with BS strategy: namely "baffle with BS."

Following yesterday's epic trifecta of economic growth when durables, housing and confidence data all slammed expectations, it was up to GDP to be the bad cop. Sure enough, following the already disappointing first Q1 GDP revision which revised the preliminary 2.5% number to 2.4%, today economists were expecting an unchanged print. Instead they got a crash to 1.77%. And on what? Why the collapsing US consumer whose true colors have finally come out in the final Q1 GDP revision: responsible for 2.40% of the GDP print in the first revision, Personal Consumption Expenditures tumbled to just 1.83% of GDP. In absolute terms, PCE plunged from 3.4% to 2.6% on expectations of 3.4%. There goes the buying power of the overlevered, undersaved US consumer.

And perhaps just as disturbing was that Fixed Investment, i.e. CapEx, cratered to only 0.39% of the GDP print, down from 0.53% in the first revision, and 0.52% in the prelim. This was the lowest Fixed Investment number since Q3 of 2012.What is worst, is that non-residential fixed investment crashed from 2.2% to 0.4%. In other words, growth CapEx is now officially dead.

Dont worry though: 4 years of QE may not have led to sustainable 2%+ growth, but another 4 years certainly will. Or maybe another 40. At this point does anyone even care?

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Wed, 06/26/2013 - 08:46 | 3694180 thismarketisrigged
thismarketisrigged's picture

and futures go higher on this terrible news.

 

makes total sense.

 

at least i got to witness a santelli rant vs all the fools on cnbc this morning. made it worth it.

Wed, 06/26/2013 - 08:50 | 3694184 GetZeeGold
GetZeeGold's picture

 

 

Thanks for the warning CNBC.

 

Defcon 1.......someone find Cramer.

Wed, 06/26/2013 - 09:59 | 3694424 WakeUpPeeeeeople
WakeUpPeeeeeople's picture

""If you can't dazzle them brilliance then baffle them with bullshit.""

 

Used to see a lot of that in the military and now seems to have found its way into the civil service sector.

Wed, 06/26/2013 - 11:40 | 3695110 SilverDosed
SilverDosed's picture

Good job using the top post to shill for santelli some more. Can we please ban this cnbc shilling fuckstick? Every post he makes is fluffing Santelli and he's got a few other names as well.

Wed, 06/26/2013 - 09:59 | 3694444 Stuart
Stuart's picture

What kind of monkeys do they have working over there calculating these stats.  How can they be off on exports by so much, let alone getting the direction 100% wrong...from adding to GDP in the 1st #s to ending up as a negative to GDP.   I know inflation goes into it but in turn, how can they be so off on that too.  The US reporting is that of a Banana republic.  Add to this spying without judicial review on your own people and then accusing the other guy of espionate...jesus... RIP Credibility.

Wed, 06/26/2013 - 10:12 | 3694492 Jdog
Jdog's picture

Cramer said "revised crap GDP number? who cares, that is in the rear view mirror" lol ok ok I finally caught up the scam, instead of reporting real economic data, they just made up a fake number, then wait 2 months later and revise it down to the real crap number, then everything is fine. who cares it's in the past. lol I got it!

Wed, 06/26/2013 - 08:47 | 3694187 ekm
ekm's picture

Dow cannot drop

It can only crater

Wed, 06/26/2013 - 09:06 | 3694264 DormRoom
DormRoom's picture

HOw can GDP so low, given the wealth effect, when equities have hit nominal all time highs, and so many asset classes are in bubbles.  /sarc.

 

Blowing bubble doesn't help the real producing economy, instead it props, and extends the shadow economy in its tranformation of the real economy to a rentier economy.

Wed, 06/26/2013 - 09:35 | 3694358 CheapBastard
CheapBastard's picture

Irony (from the Ancient Greek ???????? eir?neía, meaning dissimulation or feigned ignorance),  in its broadest sense, is a rhetorical device, literary technique, or event characterized by an incongruity, or contrast, between reality (what is) and appearance (what seems to be).

 

 

http://en.wikipedia.org/wiki/Irony

Wed, 06/26/2013 - 09:46 | 3694389 new game
new game's picture

printing = duct tape!

Wed, 06/26/2013 - 10:02 | 3694460 Stuart
Stuart's picture

As James Rickards recently pointed out the FOMC forecasting prowess is amongst the worst of any body.   This GDP print confirms that.  Why anyone believes the FOMC, there's a sucker born every day.  

Wed, 06/26/2013 - 10:06 | 3694471 Meat Hammer
Meat Hammer's picture

Bulls walk up the stairs.

Bears jump out of windows.

Wed, 06/26/2013 - 12:05 | 3695287 xtop23
xtop23's picture

May 2011 I didn't see Yogi reaching for the window latches....... lotta horns though.

Hell, I even looked at the double-paned glass twice.

Wed, 06/26/2013 - 08:48 | 3694193 spastic_colon
spastic_colon's picture

draghi, front run tomorrow POMO, bad GDP, end of quarter etc etc all adds up to ES 1625 by friday - bottom of november channel

Wed, 06/26/2013 - 09:15 | 3694301 SheepDog-One
SheepDog-One's picture

Gold spraypainted turds is what it's all about now.

Wed, 06/26/2013 - 09:34 | 3694352 aint no fortuna...
aint no fortunate son's picture

and dow opens up 120... just because

Wed, 06/26/2013 - 11:38 | 3695099 SilverDosed
SilverDosed's picture

Still shilling for santelli? GTFO of here.

 

Wed, 06/26/2013 - 11:40 | 3695109 xtop23
xtop23's picture

And that's with R&D etc credits bolstering the tally of GDP.

No problem..... they'll just revamp the revamp of the revamp's revamp in tabulating revamps.

Wed, 06/26/2013 - 08:47 | 3694181 ekm
ekm's picture

propaganda and only propaganda

 

Economy contracted probably by 2-3%

Wed, 06/26/2013 - 08:50 | 3694206 LawsofPhysics
LawsofPhysics's picture

Correct.  Everyone needs to be in capital preservation mode again.  Book profits and come back after the kabuki theater is done.  Remember, the U.S. CONgress needs to fund those liabilites and rates are rising.  

We all know there are no "markets", but there will be real consequences as governments must fund liabilities or face revolutions.

Hedge accordingly.

Wed, 06/26/2013 - 09:01 | 3694241 JustObserving
JustObserving's picture

CPI is understated by 3 to 4%.  Hence growth is overstated by 3 to 4%.  This has been going on for more than a decade now.  Real US GDP is probably about $10 trillion.  On July 1, US GDP jumps by $500 billion due to addition of intangibles.

Wed, 06/26/2013 - 09:11 | 3694290 NotApplicable
NotApplicable's picture

Thank you, accounting!

Wed, 06/26/2013 - 09:25 | 3694329 LawsofPhysics
LawsofPhysics's picture

"Thank you, mark to fantasy accounting!" - FIXED, fuck all the paper-pushers and their political puppets!

Wed, 06/26/2013 - 08:47 | 3694185 fonzannoon
fonzannoon's picture

translation - yields must drop

Wed, 06/26/2013 - 08:49 | 3694204 Clowns on Acid
Clowns on Acid's picture

translation - QE will be dis- tapered....and yields will drop...for the moment

Wed, 06/26/2013 - 08:53 | 3694222 LawsofPhysics
LawsofPhysics's picture

wait for it fonz.  We all know this to be true, but it will not happen while so many are expecting it to or so many are positioned to profit from such a move.  I say bonds keep crashing until August/september, maybe even longer.

Wed, 06/26/2013 - 08:58 | 3694233 fonzannoon
fonzannoon's picture

agreed, the trend is higher. The next short term move is lower yields. At which point I have a feeling a lot of people will be selling into it.

Wed, 06/26/2013 - 09:45 | 3694388 disabledvet
disabledvet's picture

there are a lot of obvious factors for treasury selling right now...none of them having to do with the taper. Japan is in total liquidation mode right now. the yen is tanking again..."all in on JGB's." that means selling treasuries. china is interesting because if they've simply stopped lending period that says to me they're actually going to keep buying treasuries here. obviously i wouldn't be touching the Yuan with a ten foot pole but "at least they can afford to buy treasuries in the first place." not so Brazil, India, South Africa, Venezuela, Canada, Australia, Mexico...i mean this list is getting real long right now. so sure...interest rates have explode higher...but that's for EVERYONE. i find myself asking actually "is this the way forward? bankrupting every Government on earth?" seems rather odd if true. we can't grow the economy at zero percent financing so "trying it at six percent will work way better"? really? anywho equities are up. with everything else getting slammed including gold and silver. mines are getting shuttered. charge offs are off the charts now. "and still they can't make money." bankruptcies sound imminent in the materials space. that sounds very bullish for railroads to me. i'd be a buyer. http://seekingalpha.com/symbol/ksu?source=search_general&s=ksu

Wed, 06/26/2013 - 09:50 | 3694412 new game
new game's picture

disa... says smart money in cash and waiting patiently-true?

Wed, 06/26/2013 - 10:11 | 3694485 Meat Hammer
Meat Hammer's picture

Many of my friends are laughing at me and wondering why I bought gold at $1,700/oz when stawks are doing so well.  They're also wondering why I go into a maniacal cackle when they laugh.  Suckers.

Wed, 06/26/2013 - 08:47 | 3694186 transaccountin
transaccountin's picture

so what was gdp without the money printing?

Wed, 06/26/2013 - 09:47 | 3694396 disabledvet
disabledvet's picture

REEEEEECESSION!

Wed, 06/26/2013 - 11:44 | 3695132 xtop23
xtop23's picture

Shhhh, the administration is watching.

That is the word that must not be spoken.

Better off screaming, "Voldemort!"

Wed, 06/26/2013 - 08:47 | 3694188 the not so migh...
the not so mighty maximiza's picture

does this prove the QE programe failed offically?

Wed, 06/26/2013 - 08:53 | 3694220 Bobbyrib
Bobbyrib's picture

Only to reasonable people. To the Fed, it means more QE.

Wed, 06/26/2013 - 09:49 | 3694406 disabledvet
disabledvet's picture

well...we're going to have it your now. does 40% unemployment without QE sound like an improvement? how about 25% interest rate on that credit card? oh, and that house you though was worth 400,000? it's worth 4,000 bucks now! rah! rah! GO TAPER!

Wed, 06/26/2013 - 12:12 | 3695340 xtop23
xtop23's picture

What kills me is all of that crap about the sequester.

OMG if these cuts go into effect it'll be Aramageddon..... the bond market blew that "savings" up in remarkably short order.

Wed, 06/26/2013 - 10:07 | 3694474 shovelhead
shovelhead's picture

"Proof?...Haha...Proof?

"We doan need no steenking proof."

Wed, 06/26/2013 - 08:47 | 3694189 The Axe
The Axe's picture

The ten year      sorry      I should have        ouch

Wed, 06/26/2013 - 08:48 | 3694190 slaughterer
slaughterer's picture

Bad is still good. 

Wed, 06/26/2013 - 09:54 | 3694419 Cpl Hicks
Cpl Hicks's picture

And Barry is still the One.

Wed, 06/26/2013 - 08:48 | 3694192 ThunderingTurd
ThunderingTurd's picture

Wake the fuck up America!!!!!!! We have nothing to show for the burden government has placed on our shoulders and the shoulders of generations to come. WAKE THE FUCK UP!!!!!!

Wed, 06/26/2013 - 09:00 | 3694238 GMadScientist
GMadScientist's picture

Not true! We got drones, drugs for seniors, and a whole bunch of computers to spy on you, Sparky!

Wed, 06/26/2013 - 09:18 | 3694309 SheepDog-One
SheepDog-One's picture

AH...well that's the marrow of it right there....95%+ of americans deserve exactly what's coming to them and in a way I'm cheering on the Fed! MOAR MOAR!!

Wed, 06/26/2013 - 09:39 | 3694371 salimmk
salimmk's picture

Americans are getting pissed off, I can confirm. About time they start caring about their own lives.

Wed, 06/26/2013 - 10:50 | 3694773 Wile-E-Coyote
Wile-E-Coyote's picture

Wake the fuck up America!!!!!!! We have nothing to show for the burden government has placed on our shoulders and the shoulders of generations to come. WAKE THE FUCK UP!!!!!!

You have just been allocated bed number 15734 in FEMA re-education camp Alpha. Your booking courtesy of NSA holidays; have a nice day!

Wed, 06/26/2013 - 08:48 | 3694196 ArkansasAngie
ArkansasAngie's picture

Government transfer payment will save the day. We don't need no stinking jobs with uncle Obama there to save arses ... Including the banksters'

Wed, 06/26/2013 - 08:49 | 3694197 Obchelli
Obchelli's picture

So that shows they can't even make preliminary calculations 2.4% what was that? almost 50% higher number then real one.... But who cares when they print 2.4% it's great market rallies . Now 1.8% is very timely means MOAR QE - market rallies did they box shorts or what? And one idiot on CNBC is talking now how great things are... 

Wed, 06/26/2013 - 08:49 | 3694198 Tortfeasor
Tortfeasor's picture

When even your imaginary girlfriend is a sow, you've got problems.

Wed, 06/26/2013 - 09:01 | 3694242 GMadScientist
GMadScientist's picture

Could be worse; could be floating in a river.

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