In Which We Learn That US GDP Actually Contracted In The First Quarter

Tyler Durden's picture

Curious why after inexplicably turning red earlier today (because as everyone knows in the New Normal selling is largely forbidden and the Caracas stock market is the model to imitation), the DJIA is about to turn green again and press on new all time record highs? Simple. Following the earlier disastrous construction spending report which feeds directly into the GDP calculation, banks promptly revised their Q1 GDP estimates. To negative.

To wit from Goldman:

Construction spending rose 0.2% in March (vs. consensus +0.5%). Private residential construction increased 0.8%, led by a gain in the more volatile multifamily category (+4.4%). Private nonresidential construction rose a soft 0.2%. Commercial construction continued to be a drag (-1.7%), offset by a decent gain in the smaller transportation structures category (+5.3%). Public construction continued to trend down, declining 0.6%. In addition to the modest disappointment in March, total construction spending was revised down by three-tenths in February (to -0.2%) and two-tenths in January (to -0.4%).


This morning's construction spending numbers were weaker than those assumed by the Commerce Department in yesterday's initial estimate of Q1 GDP growth. We reduced our past-quarter tracking estimate by two-tenths to -0.1%.

And of course, the always wrong, if always entertaining, Joa Lavorgna:

That this is happening as TSYs are soaring, should only make one smile even more at the constant, overt manipulation that the stock market is endlessly laboring under.

Looks like not even Obamacare managed to push the US economy out of its first "harsh weather"-driven (say that with a straight face) contraction in years.

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NidStyles's picture

This is after they started counting "creative things" and "intangible things" as part of the GDP as well, so in reality it actually contracted closer to 5%. 

Obchelli's picture

Oh this is very bullish didn't you know that - just for very reason it contracted 5% if it contracted 10% we would be soaring now. Stock market (not the economy) just reached escape velocity... Market is in orbit now and not comming back to earth in our lifetimes. Unless Meteor hits it with probability of 0.00000000000001%

Jadr's picture

The market will not reach escape velocity until the super volcano explodes.  The Russian analyst discussing the situation in Ukraine said that the eruption of the super volcano would fulfill the desires of the western elites.  Just think of how much money would be spent on construction.  It would be very bullish for the markets.

Darkdoc's picture

I think that is about the elites finally getting to declare martial law in a country where almost everyone owns a gun.

That's what they have tried to figure out how to do for the last few decades.

durablefaith's picture

Their plans are open secrets on this...

1) Deny funding to harden infrastructure against EMP

2) Open the southern border, disable the baloon system which was eye in the sky on immigration

3) Train with Chinese and Russian troops on US soil for keeping the peace mission (confis cough cation ahem)

4) Sanction Russia so hard it walks away from USD and china joins them in solidarity thus crashing the USD and economy with the axis of evil to blame

5) Triggered by earthquake, sunspot, computer virus, volcano, and some HUGE terrorist event carried out by homeschooled kids with a pressure cooker and some NON-GMO seeds which causes widespread power outages and cell phone and internet outages while various peace keeping activities are carried out on us soil to round up the rest of the troublemakers

6) As dissidents are hunted around the globe and eliminated, rounded up by internment resettlement specialists, the media proclaims that capitalism and nationalism has failed us, if only we had global government this would never happen again...

Which should take us to about 2025 - Global Governance Project Completed thanks to what the elite like to call the Obama Moment


On September 20, 2010, a report was presented jointly by the US National Intelligence Council and the EU institute for Securities Studies. It was called ‘Global Governance 2025: at a critical juncture’ .

Mr Giovannie Grevi, former research fellow EUISS, made a telling comment about his goals for global governance and his fear was that the world between 2010 and 2025 would be “business as usual, barely keeping afloat kind of scenario wherby we don’t have a crisis that is big enough to rock the boat.”

Banning Garret, moderator, and Director of the Program on Asia of the Atlantic Council proposed a solution to risk of not making sufficient progress towards the desired 2025 Global Governance ouctome:

“Is this a timeline problem?…If we move ahead more quickly, see this as an urgent problem…these outcomes are less likely.”

Mr. Alvaro De Vasconcelos, Director of EUISS wrapped things up with the  following:

We have an American President that is in favor of multilateralism. Is this window of opportunity to stay there forever? I am not sure at all. This is a very particular moment because of the pro-multilateral appraoch of the United States, and this, what we have called the Obama moment, is a window of opportunity for Europe and certainly for the other rising powers if we want really to move to a more effective multilateral system."

jeff montanye's picture

if this is the obama moment "for Europe and certainly for the other rising powers", does that mean europe is a rising power?

and, either way, has the most recent nwo project in the ukraine gathered much support from any (other) "rising power", with the exception of israel?

and, then again, has israel perhaps reached its noonday moment?


svayambhu108's picture

The population si defenitely outgunned, planes/drones/hellicopters 

ArkansasAngie's picture

Oh Boy.  It's a wreck and we're in it.


NoDebt's picture

Train wreck.  It's horrible, but you just can't look away.

Lendo's picture


If you're a poet and write a poem, it's considered CapEx.  We had a dismal GDP print and that's even after the .gov moved the goal posts to make GDP look larger than it is.  Don't even get me started on how worthless of a metric GDP is..

lasvegaspersona's picture


it is not so much the things they count as the things they IMPUTE. Counting makes you show your work. Imputing allows them to just make numbers up.

For instance: who could argue  about how  much mortgage payers would have paid in rent?...see?....just plop that number into the equation and you can keep us out a depression for another 6 years....counting is for the young and the energetic.

NidStyles's picture

Lets be fair, you and me both know that those assholes don't actually count anything. 

I Write Code's picture

So every round of golf played by POTUS counts as a billion dollars in GNP?

pods's picture

Take out the governments deficit spending and see where we have been for years:  Bottom bouncing a depression.


dontgoforit's picture

Correcto mundo.  In the shitter.  This is what big, over-reaching, lying POS, ignoramic goverment does to freedom.  Scramble it all up and then crush it with it's own currency and then lie like hell about what you've been doing.

Seer's picture

"This is what big, over-reaching, lying POS, ignoramic goverment does to freedom. "

Let me guess, another "small govts can exist" person, right?

You either get a BIG govt or you get NONE.  Take yer pick (my pick has always been for the later).

Govts do the bidding of the wealthy/powerful.  As growth capabilities have been in decline (since 1971 [well, that's the "moment" it was clear]- all has been smoke and mirrors since then) govt+big business have have to create some wild schemes, bubbles and a whole truck-load of financial hocus-pocus.

Given that our economic system is based on perpetual growth on a finite planet I'm thinking that even if one were to remove govt completely that we'd still be subjected to a bunch of BS (well, when the premise is BS the result can ONLY be BS).

Economies of scale in reverse.  Get used to it...

durablefaith's picture

"when the premise is BS the result can ONLY be BS"

That was better than the article. +100

spine001's picture

Closed ecosystems are very interesting examples of our planet evolution.

Cathartes Aura's picture


As growth capabilities have been in decline (since 1971 [well, that's the "moment" it was clear]

oh snap - isn't that when Nixon pried open the Chinese doors, revealing the "end" of the cultural-revolutionary-purging, and the RedShields slithered in to begin a fresh round of raising up a new "nationstate" of taxable worker-bees?

and oh yeah, fiat free float, yadda yadda. . .

peak amrka folks, meme-baton was passed a long time ago.

MillionDollarBoner_'s picture

So this is bullish...right...?:O(

Vampyroteuthis infernalis's picture

So this is bullish...

No, this is bullsh*t!

SAT 800's picture

I'll say. bullish bullshit. very unusual for a negative GDP to cause a stock market high. Verrrry unusual. something smells fishy here.

Tsar Pointless's picture

Nothing but blue skies ahead for us! The past is in the past.

Optimism for the future is at an all-time high. Unfortunately, at this time, I am not.

fonzannoon's picture

the bond shorts are getting stopped out just in time for the huge NFP report tomorrow. The move up in yields will be violent and representative of the growth Yellen promised was on the way. She will be carried around NYC on bankers shoulders and showered with flower petals. Then she will end the celebration by giving a cleveland steamer onto a pile of discarded bullion.

fonzannoon's picture

I thought that was pretty decent, but I am losing my mind so it's hard to know anymore.

NotAMathWhiz's picture

Cleveland steamer, made me laugh out loud.  Don't worry about the losing the mind bit, I've long thought that sanity was over-rated.  Especially these days on Htrae

mrblah's picture

Yet Europe are the ones that give too much free money away, and collects so little from the working, thus needs to change...

Ribeye's picture


SAT 800's picture

Jesus Fucking Screaming Shitting Christ on a Broken Cross; what the Fuck is going on Here ? Is everybody crazy.? I guess so.

dontgoforit's picture

This is the very essence of that which is driving us crazy. 

spekulatn's picture

What the hell is lavorgnanomics


F'n tool.

jay28elle's picture he takes some 'downtime' from porn to continue his senseless attempts at forecasting/reporting/or whatever pulling stuff out of one's azz might be called.

SanfordandSon's picture

I'm confused, didn't Goldman Sucks say to sell bonds a short time ago???

alfred b.'s picture


     The admin that does the counting doesn't need to account for its that makes much more sense, at least to the bankster society!


mademesmile's picture

Hmm. And I suppose construction spending went down because he housing market is just so hot.

Seer's picture

They're taking a break as they count all the HUGE sums of money that they've been making in the "hot market."

Yen Cross's picture

       At this point does it really matter any more? The whole system of tracking and reporting is so corrupted that it's almost impossible to extrapolate any meaningful information for the average serf.

       Earnings suck, and macro news from other parts of the world also sucks. Yet the markets completely ignore the obvious.I can just see the Q-2 GDP headlines now. " Q-2 GDP improves to +.01% from -.01%, and q-3 estimates are 3.00%"

   I'm a fucking clairvoyant.

Seer's picture

At some point the total disconnect will be realized.  The music will stop.

mademesmile's picture

The average serf doesn't look at the information. I'd wager most wouldn't know what 1st qtr GDP even means, much less if it should be + or -

Seer's picture

And it makes one wonder whether TPTB look at all us "smarter" folks and wonder how we can even think that the GDP has any meaning.

Bottom line: It doesn't matter because it's all a fabrication; therefore, I might suggest that there's a strong possibility that the "average serf" might be smarter in this case...

Bemused Observer's picture

When a 700 page book on economics makes the top of the best seller list, that tells you something. There is an interest in this subject, and those serfs are seeking answers. In a few months, we'll see if these serfs start asking the right questions...(THAT has got to scare the crap out of TPTB...the popularity of a book that reveals all the stuff they hoped was too complex and dry to interest the muppet class._)

NoIdea's picture

Looking for new all time highs this week. All in on MOMOs and new IPOs!!!

motorollin's picture

Meanwhile, I'm long SPAGHETTI-O and AMMO.

I Write Code's picture

Well the FATH is really an illusion too as the currency is debased faster than the Dow can rise.

BeerMe's picture

The Great Disconnect

Hindenburg...Oh Man's picture


"a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters"