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Here Comes Stall Speed: Barclays Cuts Q2 GDP Forecast To 0.6%

Tyler Durden's picture




 

It was only a matter of time before Wall Street, overoptimistically hockeysticking everything as always, slammed its wrong Q2 GDP forecasts following the earlier miss in Wholesale Inventories, which printed at -0.5% on expectations of a +0.3% increase, and down from a downward revised -0.1% (was +0.2%). That time has arrived, with Barclays the first to slash its already stall speed 1.0% Q2 GDP forecast by a whopping 40% to 0.4%. Looking forward to the imminent revisions from Goldman and, of course, Joe "Almost as good as Groundhog Phil, almost" Lavorgna.

From Barclays:

US Q2 GDP tracking: Down four-tenths to 0.6% on decline in wholesale inventories

Wholesale inventories declined by 0.5% m/m in May, significantly weaker than our forecast (+0.2%) and the consensus (+0.3%). In addition, growth in April was revised down to -0.1% from +0.2%. This subtracted 0.4pp from our Q2 GDP tracking estimate, which now stands at just 0.6% q/q (saar).

And here is Goldman:

1. Wholesale inventories declined 0.5% in May (vs consensus +0.3%). Inventory growth in April was revised down three-tenths to -0.1%. By category, auto inventories?which had made solid positive contributions to inventory growth in recent months?were flat, while machinery declined 0.7% and nondurable goods fell 0.8%. The wholesale inventory-to-sales ratio declined to 1.18, its lowest level over the past year.

 

2. In light of slower-than-expected May inventory accumulation and the downward revision to April, we reduced our Q2 GDP tracking by three tenths to 1.3%.

 

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Wed, 07/10/2013 - 10:35 | 3737273 Headbanger
Headbanger's picture

Wow, that high, huh?

Wed, 07/10/2013 - 10:40 | 3737294 Beam Me Up Scotty
Beam Me Up Scotty's picture

Our economy will be like the 747 that crashed in Bagram.  You can bet they had the throttles smashed into the instrument panels and the engines roaring as they crashed into the ground.  Their "economy" stalled too.

Wed, 07/10/2013 - 10:42 | 3737310 Headbanger
Headbanger's picture

Nahh... I think it's more like a 747 running out of fuel (Fed hopium) and doing a flat spin into some "granite clouds"

Wed, 07/10/2013 - 10:47 | 3737326 DeadFred
DeadFred's picture

It's cute how your avatars bang themselves to a pulp in unison when they're next to each other.

Wed, 07/10/2013 - 11:19 | 3737475 Doubleguns
Doubleguns's picture

The british empire is beating us. They are at 0.9%. That should say it all. 

Wed, 07/10/2013 - 11:43 | 3737614 JPM Hater001
JPM Hater001's picture

They're just better liars

Wed, 07/10/2013 - 14:51 | 3738460 Manthong
Manthong's picture

hmm.. I guess some folks do not understand the dynamics of latency in spinning up a turbine.

Wed, 07/10/2013 - 11:47 | 3737626 mickeyman
mickeyman's picture

It's okay, the crash only killed about 1% of the population on the plane.

Wed, 07/10/2013 - 14:58 | 3738498 Manthong
Manthong's picture

just wait till you see what the Malthusians and Guidestone dudes in the PTB have in store  :-)

sorry.. that's just crazy talk from the late morning caffiene beverages

Wed, 07/10/2013 - 10:35 | 3737274 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

That's why H2 is going to be so much better ?

Wed, 07/10/2013 - 10:35 | 3737276 eclectic syncretist
eclectic syncretist's picture

Predicting what the lie will be?  wtf?

Wed, 07/10/2013 - 10:36 | 3737281 kliguy38
kliguy38's picture

I'm shocked

Wed, 07/10/2013 - 13:26 | 3738094 OneTinSoldier66
OneTinSoldier66's picture

Me too. I mean, we have just got waaaay to much free market capitalism, respect for individuals right to choose, and invidividual responsibility going on around here. /s

Wed, 07/10/2013 - 10:40 | 3737290 Sudden Debt
Sudden Debt's picture

that reminds me of those truckers on the highway that ARE SPEEDING TO PASS EACH OTHER BY WHERE 1 DRIVES A CRAZY 0,7 MILES A HOUR FASTER THAN THAT FUCKER ON THE RIGHT!!!!

and you get to enjoy that fast and furious game in the traffic that's pilling up after them...

Wed, 07/10/2013 - 16:06 | 3738796 lunaticfringe
lunaticfringe's picture

Those fuckers drive me insanely mad. Once I followed two truckers side by side for 20 miles. 

Wed, 07/10/2013 - 11:11 | 3737293 CaptainSpaulding
CaptainSpaulding's picture

In the mean time, Barclays card is always there to help me with my Apple purchaces ( Interest free ). Thanks Barclays. You were always there when i needed you

Wed, 07/10/2013 - 12:12 | 3737747 JFKFC
JFKFC's picture

Fuck yeah dude. Got my 27" iMac with that card.

Wed, 07/10/2013 - 10:40 | 3737297 Cursive
Cursive's picture

TD,

Should be 60% cut to Q2 forecast

That time has arrived, with Barclays the first to slash its already stall speed 1.0% Q2 GDP forecast by a whopping 40% to 0.4%. Looking forward to the imminent revisions from Goldman and, of course, Joe "Almost as good as Groundhog Phil, almost" Lavorgna.

Wed, 07/10/2013 - 10:45 | 3737319 DeadFred
DeadFred's picture

I'm going with typo door #2 "40% cut to 0.6%". I wonder what the prize will be for the winner?

Wed, 07/10/2013 - 10:59 | 3737386 Cursive
Cursive's picture

@DeadFred

I think you're right.  Cut to 0.6%.  I'm waiting for the future revision to -0.4%.....

Wed, 07/10/2013 - 10:41 | 3737304 TheMayor
TheMayor's picture

This is wrong.

>Barclays the first to slash its already stall speed 1.0% Q2 GDP forecast by a whopping 40% to 0.4%

If it is 1.0% and they cut by 40%, then the result is .6%.

Why don't you just send me every article before it is published and I will edit them all for you.

Wed, 07/10/2013 - 10:58 | 3737378 Smegley Wanxalot
Smegley Wanxalot's picture

"Why don't you just send me every article before it is published and I will edit them all for you."

 

Funny, Bernank was saying the same thing.

Wed, 07/10/2013 - 11:10 | 3737439 mess nonster
mess nonster's picture

I'm glad others caught thisas well. I know I have only a modern day public school education, but even to someone like myself, this jumped out at me. in the big picture though, I suspect this kind of math is partly responsible for the trouble we're in.

Here is REEAL math, used by bankers:

https://www.youtube.com/watch?v=omyUncKI7oU

Wed, 07/10/2013 - 10:42 | 3737308 darteaus
darteaus's picture

If the US economy is at stall speed, then the world economy is about to hit the sea wall.

Wed, 07/10/2013 - 11:26 | 3737443 Mentaliusanything
Mentaliusanything's picture

Why, the US Economy was built on debt and margin stealing sicophants. The heart beats but the brain is dying. One day you will wake up and realize you, to quote Charlton Heston "blew it up"

What do you get when in search of profit you export your education, export your inflation, export your jobs and export arms... blow back baby.

 It appears nothing was learnt from Bizintine,Rome, England and now America.

Tis a death of attrition. Rome would have prospered if it stayed within is borders, same for the English, you need to go back to tired but happy full time workers who keep a balanced check book and build a 54 Chevy. The World will buy it, fuck me they are still running and mine gets the looks and would turn a Hyundia into flat plate. Build it and they will come. Bring it home

Wed, 07/10/2013 - 10:49 | 3737328 McMolotov
McMolotov's picture

Was it over when the Germans bombed Pearl Harbor? What happened to Goldman's massive GDP erection yesterday? We're not saved by the hockeystick?

Wed, 07/10/2013 - 11:32 | 3737551 SRVDisciple
SRVDisciple's picture

allright! an Animal House reference!

Wed, 07/10/2013 - 10:48 | 3737329 the grateful un...
the grateful unemployed's picture

more people working, GDP falling? sounds to me like productivity is declining (the only real economic indicator in a jobless economy) assume productivity is falling, possible reasons? companies not buying tech upgrades, declining improvement in computing power (moores law), or the lack of fungible alternatives, chicken for beef.

 

http://bullandbearwise.com/NonFarmProductivityChart.asp

 

hmmmm

Wed, 07/10/2013 - 10:50 | 3737339 sbenard
sbenard's picture

Stall Speed! Oh goody!

Stocks should rally 150 points on that news.

Who needs an economy? We have PRINTED prosperity now!

Wed, 07/10/2013 - 10:50 | 3737341 Temporalist
Temporalist's picture

This is nothing that $105 WTI can't fix. (almost $106)

Wed, 07/10/2013 - 10:54 | 3737362 ekm
ekm's picture

pure bullshit

economy has contracted by 2-3% y/y

Wed, 07/10/2013 - 11:02 | 3737397 McMolotov
McMolotov's picture

You're using an outdated form of math. You should be using the new Pretend Math.

Wed, 07/10/2013 - 10:57 | 3737376 sudzee
sudzee's picture

Holly seawalls Batman!

Wed, 07/10/2013 - 11:01 | 3737392 the grateful un...
the grateful unemployed's picture

just a matter of training. Yellen is sitting next to Bernanke right now, as she guides the plane down. as a joke he says, "keeps your airspeed up, we don't want a Sully Sullivan landing here". she thinks, "you drunken bastard, how did they ever let you fly.."

no matter in the JPM flight control tower, thev've already taken control of the plane, through gaps in their backdoor electronics. right now the desk traders are watching the computer land the plane, while the two Fed chiefs spill coffee over their FOMC minutes.

in a centrally planned economy nobody ever hits the rounddown (carrier jargon for the rear of the flight deck) if you're wondering how JPM can hack into the Fed trading desk, then you may wonder if this is a centrally planned economy.

Wed, 07/10/2013 - 11:02 | 3737395 Bastiat
Bastiat's picture

Good thing social media companies don't require revenue or this could have implications.

Wed, 07/10/2013 - 11:04 | 3737406 trillion_dollar...
trillion_dollar_deficit's picture

Just remember that in all their budget projection models, the CBO uses a 2.9% growth figure for this year and a 4.4% growth figure for next year. In the years 2015-17, they LMFAO use 6.0%+ growth figures and 4.0%+ there after in perpetuity. Somehow thats going to happen as the Fed ends QE and ZIRP. And there will also never be another recession again. Obviously.

Wed, 07/10/2013 - 11:05 | 3737409 SheepDog-One
SheepDog-One's picture

No problem! The Schwartz is heavily with Shalom Bernank!

Wed, 07/10/2013 - 11:08 | 3737429 Temporalist
Temporalist's picture

And REITS are clearly showing a housing recovery boom:

REITs Deepening Bond Losses as Leverage Forces Sales

http://www.bloomberg.com/news/2013-07-10/reits-deepening-bond-losses-as-...

 

Wed, 07/10/2013 - 12:02 | 3737701 CheapBastard
CheapBastard's picture

Hey, Temporalist, what are youu talking about? This may be your very last chance to buy that $200k house for $480k, before house prices revert to the norm as mortgage rates rise.

Better grab it before it drops...chance of a lifetime...don't miss out!

Wed, 07/10/2013 - 11:09 | 3737431 Tsar Pointless
Tsar Pointless's picture

EconoDay sees this as being...what's the word? Oh, yeah - bullish!

The draw reflects a big jump in sales, at plus 1.6 percent in May which brings down the sector's stocks-to-shipment ratio to 1.18 which is the lowest since April last year. A low stock-to-sales ratio points to the need for restocking which is a plus for production and employment.

http://mam.econoday.com/byshoweventfull.asp?fid=456369&cust=mam&year=2013&lid=0&prev=/byweek.asp#top

Wed, 07/10/2013 - 11:10 | 3737440 SheepDog-One
SheepDog-One's picture

AH yes! Perfect opportunity to load up on inventory! But of course! 

Wed, 07/10/2013 - 11:28 | 3737518 monopoly
monopoly's picture

Imagine if they had the correct and real inflation rate in that figure. -1.0%?

Wed, 07/10/2013 - 11:43 | 3737611 venturen
venturen's picture

Long Unicorns

Long Rainbows

My broker told me...

Wed, 07/10/2013 - 11:55 | 3737672 Handful of Dust
Handful of Dust's picture

The textile industry is on its knees waiting for a knockout. Clothing has flooded the globe (sort of like the USD) and is coming home to roost with plunging prices. Go to any mall...it's incredible. They interviewed the Division head of Ralph Lauren a few weeks ago on TV who said the clothing industry looks bleak. "Peope don't have the money or don't want to pay full price anymore," he said.

 

They are moving out of "High priced China" to places like "cheaper labor" Vietnam and Bangladesh where a fresh batch of slaves anxiously await them.

[ok, I'm paraphrasing the last part]

Wed, 07/10/2013 - 11:58 | 3737685 Temporalist
Temporalist's picture

Dust I've mentioned this to people too but they don't get it.  It's just another sign that the 70% consumer economy may be gone. 

Wed, 07/10/2013 - 12:10 | 3737688 swedish etrade baby
swedish etrade baby's picture

Herbalife is up almost 4%! I want to see the icahnator!

Wed, 07/10/2013 - 12:43 | 3737860 VanillaSkyGuy
VanillaSkyGuy's picture

This is positive for domestic equities.

Wed, 07/10/2013 - 12:53 | 3737904 ejmoosa
ejmoosa's picture

"I wanted my wife to feel better about herself.  She felt she was a bit overweight, and would not have sex.

 

So every week I would adjust the scale immediately after she weighed herself.  And like clockwork, every week she felt better about her efforts and her confidence climbed.  And she screwed me silly.

 

It was several months later when her clothes started to split at the seams that she figured out somethng was not right.

 

But damn, it was good for me until then.  So if it worked for her, why not the nation".

 

Ben Bernanke's Secret Transcripts 

Wed, 07/10/2013 - 13:39 | 3738145 OneTinSoldier66
OneTinSoldier66's picture

Bullish for a Maria Bartiromo BTD mentality, right?

 

Of course, the price of Gold should go down on this news so that more mining companies go out of business. As we all know, gold is pretty much completely worthless. It's just a barbarous old relic, nothing but a yellow metal, you can't eat it, it doesn't pay a dividend, it's a horrible store of value, a terrible medium of exchange, and you can't print it up out of thin air.

 

Unbacked irredeemable paper money on the other hand is great and wonderful, it can be printed up out of thin air, it pays a dividend, and you can eat it, etc... /s

Wed, 07/10/2013 - 14:36 | 3738424 TheMayor
TheMayor's picture

It has been hours now, you still haven't fixed the 2nd sentence.  I guess credibility is overrated these days?

>with Barclays the first to slash its already stall speed 1.0% Q2 GDP forecast by a whopping 40% to 0.4%.

No, wrong to 0.6%

Wed, 07/10/2013 - 16:15 | 3738827 Youri Carma
Youri Carma's picture

Crash September anyone?

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