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US Economy Shrank By 1% In The First Quarter: First Contraction Since 2011
Weather 1 - Quantitative Easing 0.
Spot on the chart below just how high the culmination of over $1 trillion in QE3 proceeds "pushed" the US economy.
Joking aside, while the realization that nobody can fight the Fed except a cold weather front, is quite profound, in the first quarter GDP "grew" by a revised -1.0%, down from the +0.1% first estimate, and well below the -0.5% expected, confirming that while economists may suck as economists, they are absolutely horrible as weathermen. This was the worst print since the -1.3% recorded in Q1 2011.
Bottom line: for whatever reason, in Q1 the US economy contracted not only for the first time in three years, but at the fastest pace since Q1 of 2011. It probably snowed then too.
The breakdown by components is as follows:
Some highlights:
- Personal consumption was largely unchanged at 2.09% from 2.04% in the first estimate and down from 2.22% in Q4. Considering the US consumer savings rate has tumbled to post crisis lows at the end of Q1, don't expect much upside from this number.
- Fixed investment also was largely unchanged, subtracting another 0.36% from growth, a little less than the -0.44% in the first estimate and well below the 0.43% contribution in Q4.
- Net trade, or the combination of exports and imports, declined from
-0.83% to -0.95%, far below the positive boost of 0.99% in Q4. - The biggest hit was in the change in private inventories, which tumbled from -0.57% in the first revision to a whopping -1.62%: the biggest contraction in the series since the revised -2.0% print recorded in Q4 2012.
- Finally, government subtracted another -0.15% from Q1 growth, more than the -0.09% initially expected.
So there you have the priced to perfection New Normal growth (inclusive of "harsh weather", which obviously has to be excluded for non-GAAP GDP purposes), which also now means that in the rest of the year quarterly GDP miraculously has to grow at just shy of 5% in the second half for the Fed to hit the "central tendency" target of 2.8%-3.0%.
And now we await for stocks to soar on this latest empirical proof that central planning does not work for anyone but the 1%.
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Giddy Up!!!!!
Get the Orville Redenbacher and let's watch the markets go higher!!!!!
Quick, break some windows!!!
Ban weather!
Since 2009?
http://www.forexfactory.com/#graph=52545
Next up "Belgium" puts through 140 billion in buy orders on the S&P.
Time to lower interest rates! Oh, wait ....
Begs MOAR QE !
Get to work Federal Government
Stagflation bitchezzzz!
Look at these zerohedge goblins cheer with glee as our economy falters. May I remind the children on this blog that this is reality and it is very serious. Our government has failed to invest enough in our economy and we as the citizens bare responsibility for that. The mature people are trying to figure out where our government can invest in order to help out economy recover from this setback, while immature, narcissistic ZH day traders gloat over being “right”.
What we need right now are trained and accredited experts!
It's all because of bad weather...in Syria, the Ukraine, Afghanistan.....
QE is criminal. Prosecute the perps and quit central planning. This is deliberate.
The reason ZH'ers cheer this isn't because they think they're right. They all think the same bullshit that once the economy goes into super depression gold and guns will be worth millions. One ounce of gold will buy them the entire state of Rhode Island. This is why they're so hostile to other asset classes, we all know it. It's never going to happen "stackers", stop listening to Schiff and Jickards, gold is not going to be worth $100,000's. And the irony here, even if it was all you did was preserve your wealth jackasses! lol I'm going to enjoy all of you being "right" about the economy, because the other half of your formula is completely wrong, good luck.
If loving the QE is wrong, I don't want to be right.
Don't have any gold huh? You'll probably be all right with cash. You may want to pick up a wheelbarrow or two. Good luck,big guy.
With degrees and everything!
There we go. So according to MDB we need even bigger government to spend more money that we don't have. Oh yeah, that reminds me that the reason why durable goods orders were up yesterday is because the war mongers in wdc just bought another $18 billons worth of nuclear submarines! I love how this destructive government invests tax payers money. This is really a great advance for society. I mean thinks about all the good things you can do with 10 nuclear submarines!!! I guess that this is what MDB calls development!
http://davidstockmanscontracorner.com/pouring-keynesian-waste-into-davy-jones-locker-yesterdays-18-billion-upside-surprise/
I can compare the Federal Government with a spendthrift wife who truly believes she saved money by purchasing 2 dresses at $75 instead of 1 dress at $50, because the second dress was half off. Fucking instanity.
Is it really cheaper to keep her?
One consideration is her taste in dresses....
Million, you assume that the asshats here on ZeroHedge are US citizens. More than a few of the contributors are Russians.
Million, you assume that the asshats here on ZeroHedge are US citizens. More than a few of the contributors are Russians.
MDB you are such a moron! The government has failed to invest? Is that theory on why all socialist countries fail? The economy is going down...because the invest too many overpaid workers and too many projects while taking too much of the people's money! I guess you can't understand anything than that troll's Krugman...NYT communist manifesto of spend more regardless of merit! Hey can we build another field of wind turbines or solar panels that operate 25% of the time. Or maybe you can suggest another soon to fail battery or solar panel company?
You are the most consistent troll. My hat's off to being able to provoke response after response. LOL.
No kidding. Over and over again he fools you people.
MDB: you crack me up.
indeed, it's very serious.
But who exactly do you claim "bares" the responsibility for that?!?! "WE AS CITIZENS"?!?!? wtf.
you can't be real. I think you are an algo. An algo that was programmed to never use the word "bear". not even as a verb.
I think he baring it all on his web site.
Were you "bare" when you typed this MDB? Mind your naked shorts! ;)
MDB, are you a Bildeberger? No, well, maybe a Hamburger?
MDB, you fail to appreciate that the corruption, fraud, and paralysis in Washington is so bad that it can no longer be fixed. The only way this is going to be fixed is with another major crisis. That seems to be the only thing that gets their asses in gear. If you have another viable solution, Let's hear it. I would be the first one to support it. However, with half the population on some kind of government assistance, the politicians seeking re-election in November will only vote to spend more money they don't have. The dollar needs to crash to wake those idiots up. More debt, more regulations, and higher taxes will only make it worse. Just look at France.
You made me laugh twice this time:
1) just 'cause you're you, and
2) bare
he had me at zh goblins...
Until the all knowing "government" can control and "invest" in the weather, I guess we're all screwed.
Newsfash: The government can't "invest" in anything. This would imply that profit and loss calculations are taken into account to direct and allocate capital, instead of crony political connections, size of campaign contributions, fraternity alma maters, etc...
Liquidity Trap, Homey
You are silly, everything in DC and NY are super great. The coke and hookers are a great buy. After all, NY and DC are the US.
The 29.5 hr/wk job economy is just starting to get rolling.
Is this going to be the summer of recovery?
Obamacare tax bill + postal rate increase + internet sales tax + Snowden leak and plunging of IT companies + unemployment rate = some serious Main Street slowdown
yes, any day now; buy the dip!
No, it's Recovery Summer 6.0 since 2.0, 3.0, 4.0, and 5.0 all failed.
Screw it! Let's go full libtard. TARP, GM, cash for clunkers times 10!!!
Great idea! Time for TARP II .... CASH-4-CLUNKERS II ... OBAMA STIMULUS II ....
I'm never going to beat my Obamacare thesis-validation-in-24-hours mark, but 9 days ain't bad either. http://thebullelephant.com/negative-interest-rates-perpetuate-depression/
Too much HAARP? Not enough HAARP? I'm sure once they master the weather modification system paired with the correct amount of Trillions in fiat shit paper then everything will be perfect in the world and we'll all be saved by the master minds of central economic planning and weather control.
Heyyyyyyyyyyyy, Wow....new government agency right there, ay???
The Bureau of Central Economics and Weather Control. They can merge NOAA with the IRS or some psycho bullshit.
Their Orwellian slogan will be: Weather = Taxes
HAARP was always such a bullshit conspiracy story.
And now they're shutting it down. That must be depressing.
http://rt.com/news/161672-haarp-closure-weather-experiments/
So wait...if it was a conspiracy theory and didn't exists, then how they hell could it be shut down when it never existed in the first place. You argue with the logic of a five year old girl.
This means they can't ever stop the QE's, which means bye bye dollar as a reserve currency. Oh boy these next few years are gonna suck.
The standard of living of the middle class can only be increased with true economic growth (inflation adjusted). Our economy is about 30% smaller than it was in 2007. A stagnant economy causes increased wealth concentration, as rentier wealth extraction grows while everything else shrinks.
Long story short, begin the countdown to a modern day Bastille.
Cool. Go long knitting needles.
I would say, "long guillotines" but because we are so distracted in America, I now say, "long LOLcats"
I bet the government could increase sales of debt if they commissioned the Kardashian girls to wear string bikinis and promote buying Uncle Sam's debt on the idiot box.
and canned food.
I think most Americans are already long on guns & ammo (still can't find any decent 22lr copper-clad around).
Not most, just the tiny minority who understands there's no such thing as too much re: guns and ammo, especially ammo.
The Federal Reserve wants a slow controlled dollar demise and subtle inflation.
They will panic and close banks (bankster panic holiday) and cease transactions when the dollar comes apart suddenly.
look one big fault of most on ZH is we want logic and data to determine outcomes...there is no data that is not corrupt, the logic of past decades is nullified by the elites need to project positive outcomes, simply put: lying.
you will go mad, applying logic and reason and any past investing expertise to these markets or MSM or .gov propaganda, moar is always less, less is moar, unemployed are redisignated as not looking for work...moar debt is income, moar stock and bond highs as the economy.
"This means they can't ever stop the QE's, which means bye bye dollar as a reserve currency. Oh boy these next few years are gonna suck".
http://renegadeinvestor.co.uk/is-the-feds-taper-about-to-reveal-more-clearly-than-ever-that-fiat-currencies-are-doomed/
Don't worry... Obama is so intelligent, insightful and powerful, he will save us all.
No, declare WAR on Weather.
The system is unable to take negative feedback, the result is clear
GDP doesn't matter to the Fed, as they believe that's the politician's job to take care of. What matters more is that the big banks are losing money fast, and the best way to turn that around now will be to bring the markets down so that volatility and trading volumes go up. This will drive the Fed to tighten the money supply until a correction occurs IMHO, although I am not short yet.
http://online.wsj.com/articles/banks-raise-caution-flag-on-trading-14012...
http://online.wsj.com/articles/big-profit-engines-for-banks-falter-14013...
it is just the weather
Good thing we are not going into another ice age.....
http://coldsun.net/
This may be a good read for all those interested in global warming and solar cycles.
The author used NASA's data to arrive at a different conclusion in 2007, NASA has since revised their data to match this author's conclusions.
Kinda makes you go Hmmmm
DaddyO
You silly man. Surely people driving their cars around is WAYYYYYYY more powerful than that sun thing. /sarc
Good to see yields ticking higher on this news, because that makes sense.
"Already priced in."
Now all we need is 3 straight quarters of 4.33% growth and we'll be at everyone's estimate of 3% for the full year.
next stop 2.25
Oh, it gets better than that! To hit 2% full-year we need to do 3% every quarter for the rest of the year. To hit 1% growth full-year we'd need to do +1.67% every quarter for the rest of the year.
I'm thinking two-oh or high-ones full year is not out of the question.
Haha sorry I meant the 10yr.
Serves you right for throwing a % number in front of an economist without identifying it! My brain goes straight to numbers like GDP, labor force participation, productivity gains, change in average hourly earnings and stuff like that.
you dont think that the fed will unload some of their excess inventory before then?
I don't even know what is going on anymore. I actually think the fed will raise rates just out of the sheer act of fighting off the Japanese implosion that is currently underway, and I don't think that will work
No need to worry. Recovery Summer, version 6, will be here soon.
Source? Contraction even after cooking the numbers? Even after all the government spending?
Quick! Fix those numbers now.
Someone in the permanent government finally had it with Oblammy; so letting a little truth leak out to scuttle the 2014 election???
But, but the unemployment number says all is well...
Initial claims have normalized..
And NOBODY has a fucking job worth a shit..
God Damn i love this country..
Drainage! Drainage, Eli! Drained dry, you boy! If you have a milkshake and I have a milkshake and I have a straw and my straw reaches across the room and...
i feel like with this, snowden's interview (the fact that that was allowed to air by TPTB is nuts to me), putin's moves, china's moves etc etc, we are getting very dangerously close to something big.
Imagine what the number would be before they gamed the input last year.
scarey thing is if the official number is a decline of 1% GDP the real life number is probably closer to 10%?
Not a good year to lease a new Porsche (for those that would be so inclined).
Bloomberg and Reuters, both are saying, this is transitory ( like the weather) and that I should not worry and that they are already seeing an uptick in numbers going forward.
hmm, not sure i trust them, what do the experts at CNBC think?
CNBC...it's like those half-hour infommercials that run at 4 am. Only it goes on alllll daaaay...
Does this mean there will be printing?
yes, and it's bullish too
Dont worry, just a little bit of inflation will fix it.
minimum wage going up in Michigan... good times are coming...
Inflation. Yes. And at the same time investors are pounding into 10 year treasuries.
Makes total sense...
Many thanks goes out to the MSM - it's 900a Eastern time and still no coverage anywhere.
I guess the MSM's printers have run out of ink and need refill or their newsprint roll shipment is late.
Loving you Tyler!!!!!!!!!!!!!!!
So long as there's no inflation, everything is ok.
Go back to bed... the baby is fine!!1
MOAR STAWKS!
Meanwhile Kissinger protege and former Treasury secretary, pencil dick extraordinaire ,TIMMAH GEETNER is peddling his book on how he saved the US and World economy.
I hope they drive pms down to the dirt. The great print fest is on!
Bitchez, we are going mad max before this shit is over.
IN OTHER NEWS
(Reuters) - Tens of thousands of children unaccompanied by parents or relatives are flooding across the southern U.S. border illegally, forcing the Obama administration and Congress to grapple with both a humanitarian crisis and a budget dilemma.
An estimated 60,000 such children will pour into the United States this year, according to the administration, up from about 6,000 in 2011. Now, Washington is trying to figure out how to pay for their food, housing and transportation once they are taken into custody.
SI SE PEUDE!
MSM will riddle economic sheep on plausible explanations. Work in progress...
"latest empirical proof that central planning does not work for anyone"
Central planning of what?
ZH has centralized planning; they manage their servers, networks, information, blogs, ads, etc. and work to produce a product that meets the demand of 10s of thousands of humans who visit here. ZH plans to work.
The tyranny of modern economics has centralized planning too; they manage their generations of lies and deception to steal from those who do productive work, like ZH. Tyranny plans to steal.
The tyranny of modern economics has centralized planning too; they manage their generations of lies and deception to steal from those who do productive work, like ZH. Tyranny plans to steal.
I am not sure about the reason why that was junked. It seems that some are not reading.
Thanks, Tall Tom. Yeah, my point is that productive businesses have centralized planning and central bankers have centralized stealing.
Just speed readers, I guess. Otherwise, reply as to the reason it got junked.
(WXIA) -- Atlanta Mayor Kasim Reed is among nearly 150 people invited to the 62nd annual Bilderberg conference, being held this year in Copenhagen, Denmark, from May 29 to June 1.
http://www.11alive.com/story/news/local/2014/05/28/reed-to-participate-i...
Incredible right? What used to be considered a made up "Conspiacy Theory" by Tin Foil wearing Craizies is now Conspiacy FACT.
The most Chilling aspect now is these exact same Bilderburg Megloamainicas are now operating out in the open for all the world to see.
Also, disturbing is how these Criminal Psycopaths / Sociopaths are making it seem or "Marketing" it along with the Criminal MSM as a Liegitimate organization.
The World IS watching & these World Meglomainocs should be scared, very, very scared.
Bullish - futures up in premarket
Yep, GDP dumps, futures RIP. WTF.
LOOK at the chart! YAY! 1% contraction simply means all the more room to QE and up the numbers go again!
Can we not put future weather liabilities into a bad bank and continuously pump the economy with sunshine..........oh hang on, we already doing that and everythings starting to wilt.
Market going higher because EVERYONE knows it doesn't snow in July
Can somebody tell me what the fuck?
The market is up every fuckin day, GOLD is smashed every fuckin day and we print a negative 1% GDP in first quarter.... over 50 insurgents are killed in Ukraine, Company revenues sucked balls and the 10 Year tresuries are going down. WHAT THE FUCK IS UP WITH THIS EQUITIES MARKET?
Belgium is bucking the trend. Their booming economy is allowing them to buy US treasuries hand over fist. In fact, they are dumping all their gold from ill gotten colonialism to buy MOAR paper promises.
POMO to MOMO
What part of the markets are fully controlled by the Fed don't you understand. Burn the charts, fuck the historical trends. They control it all and can make the markets go up or down on a whim. That's all there is to know.
You know it's bad when even Goldman says the markets are broken.
...and silver is under $19 again.
Dennis Gartman told me privately that I should buy silver in yen terms, then swap it for Facebook stock in Euros.
He also told me that unicorn shit tastes like skittles, so I believe him.
I know this is unrelated, but I just want the NSA to know I spent the last 20 minutes on the shitter, reading a Playboy interview with Quentin Tarrantino from...um, 2006? I didn't look at the pictures. Honest. That's where I was while I left the computer and TV on, so you can cancel that drone strike you fucking Nazis.
You know Dennis Gartman?
Awesome.
Can you get me in touch with him?
Would love to get some advice where to invest.
I'm sure this number will be mysteriously revised soon to be in the green....... .0000000001% There fixed it with some simple manipulation, now we are full steam recovery ahead again.
This is a 'fake it until you make it' economy with absolutely no foundation left.
"except a cold weather front"
Executive Order regulating "weather" next -- more Camelot.
Its the fucking weather's fault
Its the fucking weather's fault
Your vote counts! Make your contribution to the science of Economic Analysis and Forecasting today!
Well, finally a confirmation of a prediction by John Williams of www.ShadowStats.com as seen Recently on Greg Hunter's USAwatchdog blog.
he did call it
Thank god for war profiteering, otherwise the US would be truly screwed!
When in doubt, blow it up.
Always keep in mind that the rosy budget deficit scenarios concocted by the CBO rely on perpetual 4%+ annual growth from 2014 on out.
Do you not have blow and hookers in America?
Look at the component breakdown. What is the one consistent positive its the Personal Consumption Expenditures. This will soon make a slow downward drift from here.
there are no words left to describe this shit.
not only did the ''market'' not sell off after this horrendous gdp number, but it fucking shot up and is now at daily highs.
i am confident that we will see a 60-70 plus on dow and 5-6 pts at least on s&p.
this weather excuse is such fucking bullshit.
just because there was some cold weather, that does not shut down a fucking entire country.
living in new york, there were only 2 days the entire winter where the temps were brutally cold, like cold we rarely see, it was jan 7th and 8th i believe it was when high temps were like 7 degrees for the day, but 25 degrees while cold, is not cold that is not seen.
this weather excuse is just laughable, also, if weather was so fucking bad, why were online sales not up, shouldnt everyone who couldnt go outside to shop because of the ''terrible weather'' be shopping online instead?
And not only would minus 1% a total nightmare number ("would" because in reality it is probably sth like minus 4% excluding Obamacare, QE and numbers fudging and all the stuff we don't know), but I simply can't get my head around the fact that people simply swallow the REVISION from +0.1% to minus 1%!!! That is WAY off.
Layoff Washington D.C.
I will not.
"Atlanta Mayor Kasim Reed is among nearly 150 people invited to the 62nd annual Bilderberg conference, being held this year in Copenhagen, Denmark, from May 29 to June 1."
Bilderberg POTUS candidate?
I have had to wear a flannel shirt to keep warm the last two days.
It's an old one, so it is not bullish.
If you had an ounce of patriotism in you, you would go to WalMart and get yourself a new flannel. Everyone needs to do their part.
Drive your made in Japan car to WalMart, walk on your made in Vietnam Nikes, wearing your made in Malaysia shirt, made in Indonesia shorts, waving your made in China American flag and buy that made in Mexico flannel shirt. Pay with magic money credit card from that New York bank. Buy some food with the SNAP card too.
First deflation, then hyperinflation.
Bernanke said it only happens after wars. The people need to try this PhD bastard for treason, along with Evans and Dudley.
See ZH article "Is this the mania phase?"
Looks like a big YES.
And what about the extended "campaigns" in Iraq and Afghanistan? I guess that they were not wars?
Tax the cold weather! Tax all the cold out of it for the good of the sheeples and banksters! Fucking hot weather FTW. Fuck
THE NEW NORM OF THE AGE : GDP CONTRACTION DIRECTLY proportional to S&P expansion.
FT critique in nit-Pikettying is going through the same evolution. The more wrong you are the more strong is your plutocratic rebuke.
Play on Oligarchy fools as the middle class dissolves into proletariat; and London property goes the other way !
Paul Krugman was quoted earlier saying "we are on the right track - the green shoots are there -- just need a few trillion more barrels of water --- and before you know we will have a jungle with fruit trees and pineapples --- keep with my program - I am Pulitzer - I know what I am talking about"
Real World:
HIGH PRICED OIL DESTROYS GROWTH
According to the OECD Economics Department and the International Monetary Fund Research Department, a sustained $10 per barrel increase in oil prices from $25 to $35 would result in the OECD as a whole losing 0.4% of GDP in the first and second years of higher prices. http://www.iea.org/textbase/npsum/high_oil04sum.pdf
Now what does a 100+ sustained price do?
"this weather excuse is just laughable, also, if weather was so fucking bad, why were online sales not up, shouldnt everyone who couldnt go outside to shop because of the ''terrible weather'' be shopping online instead?"
Absolute proof that "the government" and "the fed" do not run the country as they believe...or if they don't really believe, as they have said/pretended/would like to...
Anyone think Obama policy can turn this economy around?
Does that include the X/Y axis?
Cause it sure as Hell is upside-down.
I love the smell of a phyzz silver sale in the morning.
Smells like...Victory...
Some day this fiat war's gonna end...
https://www.youtube.com/watch?v=bPXVGQnJm0w
Ta Daaaaa!!!!!!
No Income No Demand
No Income No Demand
No, oh fuck it they get it?
but but but Steve Liesman from CNBC said we will get about 4% GDP at least, this can't be right
If we are doing this good with a shrinking economy, we are going to be kicking ass as the economy improves!
It wont this is as good as it gets.
It was sarcasm...
Dow through the roof and GDP contracting! Who wouldda thunk it. Gee I wonder what the problem is? Circular money, gotta love it.
Totally Federal Reserve controlled market. The Fed's "buy everything" is alive and well.
While inflation is becoming more pronounced the Federal Reserve pushes for even more inflation and printing through back-door Treasury purchases.
The Edward Snowden of the bankster crowd that reveals the Federal Reserve's back-door purchases out in the open and their real books will be a hero.
Cue the midlevel banker deaths. This is the "kill the engineer" strategy. Kill the ones that impliment the fraud to keep the secrets.
Belgium will fix it
I can't even find the GDP revised info on Yahoo Finance?? I guess with the markets rallying big, they don't want this info out, which could be a big hit to upcoming earnings reports?? BUY BUY BUY
It's on Yahoo's main page, top story. Whoever put it there will be looking for a new job this afternoon.
According to the story, the harsh winter battered the economy.
1% down and that is with a phoney 1.3% deflator. Inflation is more like 3 to 4% at least. This economy has not grown at all since the last recession. Add in all the Obamacare spending and you get a clear sense of the health of the economy:
-1.0% -2.7% (inflation adjustment) - 0.5% obamacare adjustment = -4.2% (Real GDP)
http://www.youtube.com/embed/0sujnvIV4g4 #1 Cause of Death