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What Q2 GDP Weakness Will Be Blamed On
As we entered Q1 2014, hope was high that this was it - this was the quarter when, with stocks at record higs, employment data improving and a confident Fed tapering, the US economy would reach escape velocity and back we could all go to "believing" in the futures once again. The 2.6% growth expected at the start of Q1 quickly evaporated into a -0.5% contraction in the economy due to "cold" weather in the winter. Of course, the Keynesian-hockey-stick believers have marked up their "been-down-so-long-it's-gotta-bounce-back" Q2 expectations to 3.3% growth... so what could go wrong. One glimpse at the following chart will explain it all - and it's the weather that will be blamed once again...(with 48% of the nation now in drought conditions).
"Just Too Cold" Weather knocked 3 percentage points of growth off the world's largest economy...
Just how much will the most widespread drought in a century knock off the 3.3% hope for Q2?
with 48% of the nation abnormally dry and almost 15% in extreme drought...
We suspect phrases such as "it was just too hot to shop" or "due to unseasonably hot weather, sales of XXXXXXXXXXXXXXXXX were dramatically affected" will be prevalent in Q2 earnings calls...
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Business here, since February , hasn't been this weak for over 3 years. Still no upswing anywhere in the near future. But it's like a perfect game, no one dares mention it !!!
Whether it's the weather will depend on how the consumer weathers the weather.
Ready or not it's whether El Nino comes!
Figure it this way. Q1 dropped by approximately 3% from original forecast to final number and they even got the fucking sign wrong!
Booyah, assholes!
The first couple consists of a pansy and a wookie...,,
and we're supposed to know in from out and who's on top?
http://fbcdn-sphotos-e-a.akamaihd.net/hphotos-ak-prn2/t1.0-9/10252173_24...
I just don't understand why everybody thinks he's gay and she's a he/it/thingie
#LetOurWookieGo
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Wut? ;-)
Unless the writer believes we can eat our precious Fed Banknotes, he could go on saying the drought doesn't matter... What is this bullshit!? NH3 shortages coming to a deserted farm near you. Get ready to starve!
no, get ready to use your prepper foods. why wont you store some food?
It's because they aren't white american, what the previous presidents have been.
You saw what Bush's wife looked at but how many took shots at his wife or his sexuality?
Most are pissed at the sad state of the country and spew nonsense, not knowing who to hate and just they hate all.
ZH is good at wadding through some of the bullshit.
I don't know if Bam-Bam is gay or not- and I honestly couldn't care less where he waggles his willy.
As for the Wookie:
I suppose it's just a guy thing, but contemplating the idea that a genuine, bona fide female of the specie H. sapiens could really be that fookin' ugly makes *my* willy shrivel up and play turtle.
A picture worth a quadrillion words;)
Noticing the same thing. May has been slow. Looking like things will be tight for awhile.
It's that weather!
"In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage."
- John Steinbeck, The Grapes of Wrath, Ch. 25
And it can only get worse. An economy which comprises 70% consumption can only grow via increased consumption. And that is improbable given declining net disposable income and the creation of only part-time minimum wage jobs.
Psst. That abundance story.
Oil is $100+ and has been all year?
Yet another reason to put a bid in the market.
At some point (my view is a year ago) the Fed (tightening) and the economy (contracting) will "Trump" all other matters.
I think this has been true all year actually.
Don't see a crash coming...but I've been dealing with a "good lovin gone bad" problem for sometime now...so it's time to share the bane I guess.
#hot/cold/wet/dry/windy/calm/socio-economics/101.
So far it's been a good year for nail guns. Whodathunkit?
Retail sales figures were down due to a pattern of repeated incidents involving daytime brightness followed by nighttime darkness, which left consumers confused and disoriented.
That and the fact that everyone is raggedy assed broke.
Sssssshhhhhhh! Ixnay on the okebray.
No, come on, we're in the middle of a grand recovery. Don't you watch the news?!
For Five years I've watched the news, same story, recovery, recovery. My TV has worn out in that time.... Oh That recovery.
A new TV does not a recovery make.
.
That's not what they said on TV.
Have you seen the news lately? It's in Super Hi-Def 3-D Ultravision 9009®. Now that's what I call great news!
Everything on tv is a rerun, so it's Recovery Summer 6.0.
That's sexist referring to Raggedy Anne like that.
Not if the NYT's fires her first!
(I knew I shouldn't have gotten that Cato Institute tat)
Arizona is abnormally dry.
.
The map has West Virginia in moderate drought. Lewisburg WV which is dead center in the graphic is nearly 2 inches above normal in percipitation for the year. I guess NOAA has a "new normal".
I also found it highly unusual for the Texas panhandle (that well known, heavilly forested...almost jungle-like area) to be the epicenter of...a drought...lol.
You are under the impression that a rain forest can't have a drought?
It's rained three times already this year in AZ, that is wetter than normal...
Funny how the weather picks on planned economies.
Good point. It really is uncanny, isn't it?
god wills it
Half expecting to see the "eye robot" from Sim City 2000 hitting the news headlines: "Killer extra-terrestrial robot causes diminished Q3 growth prospects", say Goldman Analysts.
Coincidentally all that needs to happen for recession to strike are majority expectations of a recession to happen and the subsequent behavior becomes a self-fulfilling prophecy. Have you read the WSJ comments section lately? It's like a watered-down Zero Hedge.
Certainly average people are feeling the squeeze, and I doubt they are going to stop any time soon. Please take note .gov, because when you cry wolf and bullshit your citizens often enough, they lose trust in you. At that point nothing you say is going to make a difference.
Clearly, the bureaucrats need to regulate the weather better so the consensus numbers jibe wid the accounting preferences better.
Sigh ;-)
Sometimes it seems that nearly everyone around here is either a government employee, a government pensioner, works in some government-protected industry or is one of their retirees or is on entitlements...
Not many even halfways-profitable small businesses around anymore at all.
Much real wealth has been sucked right out of the private economy, or it has been regulated or taxed to death.
I can't see this ending any way other than in massive price inflation induced not by "rising wage demands", "economic growth" or "consumer demand" but by the sheer volume of paper money chasing fewer and fewer people able to profitably produce actual GOODS.
We'll all be working for the same employer someday. The US Federal Goverment, or one of it's subsidiaries ( which in itself is a joint venture of Black Rock, Goldman Sachs and Berkshire Hathaway).
Half the US population is already drawing a paycheck from them in some form or other. Start liking it.
You'll get your rising prices if all the paper returns. For now, it is still being exported to the rest of the world.
Except for those food prices, which is getting blamed on drought about three monthes before any harvests actually come in.....
Actually I have been doing quite well hauling junk out of rentals and forclosures...wait that is because of government.... well I have to eat crow now it is beacause of gvernment I am doing well...
Actually I have been doing quite well hauling junk out of rentals and forclosures...wait that is because of government.... well I have to eat crow now it is beacause of gvernment I am doing well...
NOOOO!!!! the Economy has Never been STRONGER!!!! (thank you for Believing Sheeple!)
The overheated internet caused by the lack of enough censorship is destroying the ability of carbon credits to further strengthen the economy with more regulations.
EDIT: Would the /sarc tag made any difference?
It is so fucking hot in Los Angeles, never like this I've been here since '78. It's like August already and if it stays like this or gets any hotter there won't be a green plant left by July. It really is too hot to do anything most days lately.
So get medical maryjane and EBT cards.
Live like a prince!
Wear a JayZ 5%er gold medalion, believe in Original Sin.
It can be so comforting, a real boost to one's self-esteem having the small kids look up to you when you teach them a 27 proper inflections of "motherfucker"
Hey!...did you know P Diddlie is a doctor of some description now?
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Guess everyone missed it...he recieved a doctorate on unicorns or sumpin...
http://www.dailymail.co.uk/tvshowbiz/article-2625343/Diddy-says-hes-magical-creature-awarded-honorary-doctorate.html
Yeah, he's a dropout from Howard...but "what does it matter NOW!"...this is unicorns we're talkin bout!!!
Ain't cultural diversity wonderful.
If I had referred to all of the females of my acquaintance as 'hoes and bitches, I'm pretty sure I'd be orbiting Saturn.., but I was not a "rap artiste."
#MisogynyFirstLady?
But of course, we're cowards, don't wanna talk about it...lol.
John Williams new interview over at USAwatchdog.com is well
worth the time.
His message is get out of the USD now.
There’s no bounce left; and these days we see the devastation in the economy brought about by welfare-state policies.
Today’s George Will column hits right between the eyes the man responsible for much of this damage, Lyndon Johnson. Here are a few graphs from “What LBJ Wrought”:
In 1964, 76 percent of Americans trusted government to do the right thing “just about always or most of the time”; today, 19 percent do. The former number is one reason Johnson did so much; the latter is one consequence of his doing so. …
Twenty-nine percent of Americans — about 47 percent of blacks and 48 percent of Hispanics — live in households receiving means-tested benefits. And “the proportion of men 20 and older who are employed has dramatically and almost steadily dropped since the start of the War on Poverty, falling from 80.6 percent in January 1964 to 67.6 percent 50 years later.” Because work — independence, self-reliance — is essential to the culture of freedom, ominous developments have coincided with Great Society policies:
For every adult man ages 20 to 64 who is between jobs and looking for work, more than three are neither working nor seeking work, a trend that began with the Great Society. And what (Nicolas) Eberstadt calls “the earthquake that shook family structure in the era of expansive anti-poverty policies” has seen out-of-wedlock births increase from 7.7 percent in 1965 to more than 40 percent in 2012, including 72 percent of black babies.
LBJ’s starkly bifurcated legacy includes the triumphant Civil Rights Act of 1964 and Voting Rights Act of 1965 — and the tragic aftermath of much of his other works. Eberstadt asks: Is it “simply a coincidence” that male flight from work and family breakdown have coincided with Great Society policies, and that dependence on government is more widespread and perhaps more habitual than ever? Goldwater’s insistent 1964 question is increasingly pertinent: “What’s happening to this country of ours?”
http://www.nationalreview.com/article/378225/what-lbj-wrought-george-will
Didn't catch Will's article (thanks for the link- I'm gonna read it now), but I've been on an LBJ kick around here myself the last week or two. The "Great Society". Yeah, they just didn't say who it would be great for. Well, actually, LBJ said it himself, but nobody listened. Walked the whole country right into the buzz saw.
Just at golf this very day, we were talking about Urban Renewal, Projects, etc., from LBJ, enslaving the poor black folks, moving them from neighborhoods into hell-holes, destroying the very fabric, culture of their society.
And to this day, the Dumbocraps still think that shit is a great fucking idea.
Talk about enslaving and racial bias, bigotry!
What did ya shoot?
He unloaded his gun beforehand so he wouldn't be tempted to shoot three of his foursome.
Oh...the golf score, sorry ;-)
Watch out for the spring loaded dagger in the one iron;)
Bond got nuttin' on knucks;)
He hasn't seen my MER's virus club sock yet!
Last time I played golf I shot a good bowling score.
You keep score?
My best shots are usually ricochets off trees.
My mom has this device with maybe a dozen beads on her golf bag. She takes a shot and slides a bead down. At the end of the hole she adds em all up and marks her score.
I could drive it a mile down the wrong fairway and the divots I left while putting were a real thing of beauty. Now they pay me not to golf, anywhere, just by showin up.
I'm like the Jesse Jackson of Golf or sumpin ;-)
They get right pissy about that wrong fairway shit, but I never saw anything in the rule book!
I have a dream. We all use golf carts, croquet mallets and balls, and create horseless polo.
The Goff can be saved.
Combine the Welfare State with uber-successful exporting of jobs and the economies of scale of creating money from nothing and why would anyone wonder why this economy has a GM approved quality ignition switch.
Greetings JR
Congress has a faulty ignition switch, as well, Kayman. Trouble is, bankrupt as they are, they also have a Fed-approved credit card with unlimited spending.
Nathan Lewis on Forbes.com in a book review article titled “Ron Paul’s End the Fed Condenses a Lifetime of Wisdom and Experience” supports your classic one-liner, just more proof that it’s a drunken, Fed-bought-off Congress that is driving this clunker economy to the wall.
Says Lewis: “Much of his extraordinary term in office revolved around the topic of money, which itself is remarkable. As Paul recounts in his 2009 book End the Fed:
“I have for years sensed a total disinterest in monetary policy by members of Congress as well as members of the Financial Services Committee. … What the Fed and paper money have done for Congress is lead legislators to believe that there are no limits on what they can spend, on what they can propose, and what they can accomplish. They (Congress) really do behave like college students on spring break who are using their parents’ credit cards with no limit. They don’t think about the money. They don’t think about who or what is paying the bills. The ability to do what they want is just taken for granted. They aren’t even interested in looking into the accounting books. But they would hit the roof if the card were ever declined.”
This attitude is reflected in statistics: with the advent of floating fiat currencies in 1971, not only the U.S. but most developed world governments started running deficits in peacetime for the first time. At some basic level, politicians figured that the “central bank would bail them out” with some kind of money-printing. It was all funny-money in the end. It took a while, but Paul says the era of reckoning is upon us now, and indeed the Fed and other central banks are quite busy today either propping up sovereign bond markets that freely-acting investors had abandoned (Europe), or rather forthrightly engaging in printing-press finance (U.S. and especially Japan)….
His daily exposure to the sausage-factory of Congressional policymaking has given him some insights that I think are particularly interesting…
Read the rest of the article
Progressives : "Lyndon Johnson couldn't be the cause! He was a Democrat and Democrats care about the poor! Nah, it's just a coincidence."
From WSJ:
Household debt increased $129 Billion between January and March, the third consecutive quarterly increase. The Bureau of Labor Statistics said that the median household savings rate is ZERO! Did you read that, ZERO!! So much for deleveraging the household balance sheet!
BullyBearish
Savings are so old-fashioned. Let the Fed print "savings". They tell me its a hell of a lot easier.
Just take my estimate, lower by 4 std deviations and you'll have your answer, as long as it is not snowing...
The market will continue to go higher just so long as we fail to meet the necessary economic benchmarks; this way we will know that the future is not yet price in. Upward and onward (to obilvion)!
The first blush of inflation creates the momentary illusion of faster pace economic activity - velocity.
A nice rosy glow in the cheeks. That was Q1 and it still sucked ass.
Q2/Q3 will rip the face off. Out West the Inflation horse has left the barn.
The cost of fighting fires does not count towards GDP? Honest question. And, yes, I know about broken windows.
Fighting fires is Government. It goes to GDP. It's GNI that I worry about.
If the entire planet was on fire, world wide GDP would be incredi...oh never mind ;-)
They have been working on that but Putin will not cooperate and start the shooting.
Maybe he should start, invade, conquer and then pass a law on his new subjects that everyone is required to buy his gas.
Kinda like here, with "healthcare"...its the latest thing ya know ;-)
We have been having a lot of of weather lately.
I expect that we will have some weather tomorrow.
I wonder if the drought will affect shale oil/gas production in Tejas?
Not sure about drought effect.
But I can wager that given majority of locomotive and rolling stock is now committed for crude every other commodity moved by rail is going to be hit with huge increases.
3 years ago 1500 to move a can from SEA to NY. Today 3000.
3% of all rail loads are crude....
Quit making shit up...
"The intensifying drought is a precursor to an intensified Summer Of Recovery (#5). I'm Joe Biden and I approved this deception."
Does anyone remember the Eron commerical where a CEO is at a stock analyst meeting and he blames the weather. Then Eron proclaims that "Eron has created a new market to protect revenue against unfavorable weather." I new that was BS the first time I saw it. 12 months later, the Eron scam comes apart at the seams. Every time they talk about weather and the economy, I smell BS.
Here is the commerical...
Where will the Okies go this time? Both Oklahoma AND California are the two worst hit areas.
Was in the Wallmart thats accross the street from where I live on Saturday morning. After buying a few things I went up to the get checked out and all four of the express lanes were closed. Nobody minding the registers on a Saturday morning. Had to get in line in one of the regular checkout lines and I didn't need to wait long in that one either to get checked out. It was a bright sunny morning so I would have expected a lot more customers shopping. I guess by now most folks have used up their tax refund money. Can't blame it on any drought here on the East coast cause we had a torential downpour on Friday. Grass is growing faster then I can cut it. I always wondered why they don't build a pipe line from the east coast to the west coast so when we get a load of rain, they can't pipe some of it out to where its needed. Oh I know there's no money in transporting rain to drought stricken areas.
Don't be fooled, you can't call it a drought if the region in question is technically a desert..
"I guess by now most folks have used up their tax refund money."
Working people still give zero interest loans to .gov? I guess we can attribute that to government education.
As far as pipelines, Sam Kinison said it best...
http://www.youtube.com/watch?v=P0q4o58pKwA
...don't live in a desert ;-)
Plenty worse to come this year. That is if the El Nino developing now continues to form. Right now it is forming in a manner more powerful than the record 1997-98 El Nino. It might be that the Pacific Decadal Oscillation is going to make it's switch from the cool La Nina bias of recent years to the much warmer El Nino bias. But even if that is not the case, this El Nino is forming stronger than the 1997-98 event by a wide margine. It remains to be seen if this continues, but record heat trapped in surface and deep pacific waters would be dumped into the atmosphere and all the associated El Nino extreme weather would be in store. California would see record storms and rain fall events, the drought would end, probably in winter. But the flooding could be epic.
There is a long list of weather events that cause damage to agriculture and property that goes along with large El Ninos.
But right now the Jet Stream is pumping record heat into the arctic and Siberia. The coast of Western Siberia on the arctic sea could se 70 degree F in the coming days.
As for the economy. If this happens, food prices will spike off of an already rising level. Social unrest in poor nations would spike along with it. And the US Government could and would blame weather for a less than robust GDP. But then GDP is fake anyways, and not either as strong as reported or reflective of main street economic growth. It is a fake number and reflects fake financial profits to speculators and bankers. America's real economy continues to sink to the crapper and most Americans are seeing wage stagnation or reductions, full time jobs declining along with benefits. More and more people drop out of the worl force and scrounge off of government and relatives. Like 55 year old guys living with their 85 year old mothers, and kid in their 30's staying with Mom and Dad.
Q2 GDP Weakness will be blamed on: Drought or the Russians. Which ever is making the headlines at the time.
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It's gotta be allergies rather than the weather this time. I mean, it's well documented that the rational economic actor will sharply reduce consumption and turn bearish in direct correlation to pollen count.
I remember how the economy use to rock.
Before Al Gore invented weather.
The US was at war with the weather: therefore the US has always been at war with the weather.
I drive an hour to work everyday and listen to financial news on talk radio. You cannot have any report on the health of the economy and busisness in general without mentioning "the weather". This is far worse than the lost airliner coverage and a classic example of if you say it long enough people will believe it. The tie in is the carbon tax that cornholer in chief wants passed. To me this is absolute proof of an agenda at the highest level of government that has nothing what so ever to do with reasonable and responsible government. We are suffering from "economic capture" of our economy and weather has nothing to do with it. Prepare accordingly.
US GDP
Q1 2014 - NEGATIVE
Q2 2014 - NEGATIVE
We may soon be forced to face our economic Armageddon. The forces that have driven stock markets ever-higher and upward may be beginning to wane. Many markets became distorted years ago when QE and super low interest rates hit the economy in an effort to lessen many of the missteps of recent years.
This has been more helpful in holding up the underlying value of assets and derivatives it now appears than helping to repair a wounded economy. QE has up to now stopped an implosion of derivatives including the resulting contagion and shock that would have spread throughout the financial system. Unfortunately the economy has not fared as well as these asset prices and in many ways these policies have harmed Main Street.More on this subject in the article below.
http://brucewilds.blogspot.com/2014/05/facing-our-economic-armageddon.ht...