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2014 GDP Forecast Cuts Begin As Bank of America Trims Q1 Growth From 3.3% To 2.8%
While the downward Q4 GDP revisions were inevitable courtesy of the government shutdown scapegoat (making a joke out of the sellside exuberance in late 2012 which had seen 3% growth some time around now,) starting first at Goldman, and shortly after at JPM both of which cut their Q4 GDP forecasts by 0.5% to 2.0%, we had yet to see the persistent bullish bias spill over into 2014. That just changed following an overnight cut by Bank of America of Q1 2014 growth estimates from 3.3% to 2.8%. Certainly, this is the first of many as once again optimism proves unjustified. But who can blame it: after all there will have been "only" 5 years of QE, and the Fed's balance sheet will be only $4 trillion at December 31, 2013, implying a S&P of 1800.
From Bank of America:
This week’s budget agreement was good news for the economy and confirms our baseline forecast. We had expected an agreement right before the October 17 deadline with no new fiscal austerity in the package, and that is exactly what we got. We have made a minor change in our GDP forecast: we continue to see just 2% 4Q GDP growth, but we have cut 1Q back from 3.3% to 2.8%. This reflects offsetting factors: government spending will bounce back in 1Q, but with new budget deadlines we expect mild confidence headwinds to persist into the quarter. Our Fed call remains the same, with a $10 bn tapering in January and with a later move more likely than a sooner move.
Looking ahead, the broad story remains the same. Growth in the last several years has been held back by three factors: structural healing in the private sector, fiscal austerity and confidence shocks. Looking ahead, confidence remains at risk but the structural healing is well advanced and fiscal drag drops significantly. At the same time, we think inflation is likely to remain below the Fed’s forecast, with abundant spare capacity in the US and globally, soft commodity prices and a strong dollar. This implies a super-slow Fed exit. We don’t expect QE to end until next November and we don’t expect rate hikes until the end of 2015.
The budget agreement sets three new deadlines. First, another bi-partisan Committee will be formed and is supposed to come up with a “grand bargain” by December 13. Second, the new continuing resolution will expire on January 15 and there will need to be a new agreement to avoid another shutdown. Finally, the new debt ceiling is on February 7. Let’s look at the likely outcome from these three deadlines.
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The income tax revenue from the 29.5 hour jobs will be a boon.....don't discount that!
The media is is furiously making shit up to convince the public that the stock market is going up because of Chinese growth.
well... that may not be the real truth...
IT'S BECAUSE I POSTED ON FACEBOOK THAT MY DICK GREW 260% WHEN MY WIFE LICKED IT!!
DOW TO THE MOON BITCHEZ!!
What he said. Moon bitches, but im going to add another bitches!
MOON BITCHES BITCHES
to the moon, Alice
to the moon.
infinite economic growth eternally bitches
I thought it was because of Obama's brilliant economic theories that should give him the nobel prize???
My forecasting tool is my flushing toilet bowl. It hasn't been wrong yet.
Who gives a shit, they make it up as they go.
Worthless.
That's true right up until reality runs them over and crushed them like a bug.
This should be worth a 300 point rally. /sarcasm.
If there is no law against upward revisions to GDP expectations, then why are all revisions downward?
slooooow motion economic collapse. its called getting in front of the event to make it look like you know what is going on so you can say "as predicted' on your resume.
BWAHAHAHAHAHAHAHA
JUST READ THAT SCHWARZENEGGER WANTS TO RUN FOR PRESIDENT IN 2016!!!
AND I BET HE'LL PROBABLY MAKE IT!!!
HAHAHAHAHAHAHAHAHAHA
Here ya go:
http://www.dailymail.co.uk/news/article-2465713/Arnold-Schwarzenegger-lo...
With Jesse Ventura for VP! That would work for me!
headbanger, wtf, you mean arnold who never kept a single promise to the voters?? oh i get it it's a joke.
Schwarzenegger wasn't born in the US. I don't think he can be President.
Time for another dose of Ritalin Bobby.
Ritalin, with a thorazine chaser.
Good mental hygiene is only a swallow away.
HAHAHAHAHA, I'LL PRINT YOU A BIRTH CERTIFICATE FOR 20$!!
JUST FILL OUT THE NAME AND EMAIL IT TO EVERYBODY!
http://www.mrconservative.com/files/2013/07/ht_obama_birth_certificate_jp_120301_wg.jpg
Precident. Not saying that Cousin Adulf was born in Kenya and speaks fluent Indonesian but he could sure bench a shitload when he was living in the fatherland. Yup its late and I have drunken too much wine. But... im not suprised. Dau unt mien hamburger.
http://m.youtube.com/watch?v=dE3dVlZ_z5g
Nominate the hulk for vice...
please do not worry
Trim? 3.3 to 2.8, I think that's more a haircut!
The "shutdown" gives them an excuse for lower GDP so they don't have to admit how shitty the economy is under 0bozo.
Toss a minus sign in front of either and perhaps then there is evidence of oxygen reaching viable neural nodes!
"This implies a super-slow Fed exit. We don’t expect QE to end until next November and we don’t expect rate hikes until the end of 2015."
CTRL-P to infinity and beyond.......
So the Main Street economy remains shitty at least well into next year. Which of course justifies the Fed pumping more trillions into Wall Street as they debase our currency. Which in turn keeps the economy shitty which justifies even more largess for Wall Street and so on.
Gee, economics is so much easier than they taught us in college!
What am I missing here? Does Obama not fall under this category as being a foreigner?
red game/blue game fail, open your paradigm to understand they are all the same, foreign,domestic, republican,democrat.
The problem isn't the people in office, it is the office, the system is corrupt, the problem is the system.
This game of projection limbo will have several rounds ending south of 2%, I wonder if those doing these projections use the results of their models or decide what is the lowest politically correct projection.
actually highest politically correct number, to be revised downward after they fail, usual excuse is is unexpected events.
to project the dream of recovery a fable must be told, when the fable fails to materialize a new fable is begun.
we dream by night but spend our days hypnotized by drugs in our food and water and fables in our media.
There is no reality if you own a tv, it is your window into the dream world that shows you how to live,how to think, how to consume.
you are not a citizen you are a consumer.
The banks job is to create a consumer friendly environment by spinning dreams of comfort so that it may more easily rob you.
I heard people yesterday on CNBC prognosticating that the FED won't taper until June.
More likely June of 2027, when a loaf of bread is an even $1 Billion (before tax).
Google just hit $1000 a share..that says it all.....toys for the masses...that is what the USA produces...companies in the ether.....I just don´t think that is a good long term stratigy....
Clear Huge Totem-Poles of FED’s Failing because despite years of QE:
- 10-Year Bond Prices Have Actually gone up – FAIL!
- Even FED’s own Core Inflation doesn’t reach 2% – FAIL!
- Extremely Low Money Velocity – FAIL!
- GDP Declining, growth forecasts constantly cut – FAIL!
Talking about growth forecasts constantly cut http://forum.prisonplanet.com/index.php?topic=231171.msg1446339#msg1446339
Allianz Says Capital Rules Fuel Artificial Risk Pricing
16 October 2013, by Oliver Suess and Noah Buhayar (Bloomberg)
http://www.bloomberg.com/news/print/2013-10-16/allianz-says-capital-rules-fuel-artificial-pricing-of-bond-risk.html
“At some point in time, people will have to give a clear answer. So far the answer is we’re going to grow out of the problem.”
‘Highly Unlikely’
That would mean a country like Germany would need 3% to 4% growth with inflation increasing at the same rate, he said.
Spain or Italy would need growth of at least 5% and “that’s all highly unlikely,” he said.
Economic growth is projected to be 1.8% next year in Germany, 0.6% in Spain and 0.5% in Italy, according to economic estimates compiled by Bloomberg.
Diekmann said so-called bail-in laws, which could enforce creditor losses in bank failures, are discouraging his company from investing in lenders as well.
“Bond prices are not reflecting the risks,” he said.
“Everything that can get bailed in, we have to pull out, be it nations or even the whole banking systems,” Diekmann said.