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The Avalanche Of Q2 GDP Downgrades Begins
With all eyes firmly focused on the dismal Q1 GDP print and summarily dismissing it as 'noise', backward-looking, 'weather', and 'exogenous'; today's worrying spending data has sent the serial extrapolators among the sell-side economist herd scrambling to downgrade over-exuberant Q2 GDP expectations (five so far). One glance at this chart is all one needs to know about the "bounce back" in pent-up demand spending (that is not there). As Bank of Tokyo-Mitsubishi's Chris Rupkey told Bloomberg, "Don’t start betting on those 3% GDP numbers yet." This only trumped Goldman Sachs 'oh-so-embarrassed-again' Jan Hatzius who slashed his exuberant 4% Q2 GDP growth estimate to 3.5% (for now).
Five so far...
Goldman Sachs: We reduced our Q2 GDP tracking estimate by five-tenths to 3.5%.
1. The May personal spending report was weaker than expected. Personal income grew +0.4% (vs. consensus +0.4%) in May. The core wages and salaries component grew 0.4%. Other personal current transfer receipts grew a strong +1.9%, related to the Affordable Care Act. Personal spending rose a smaller-than-expected +0.2% (vs. consensus +0.4%). Back-revisions to previous months reflected the large downgrade to Q1 healthcare spending found in yesterday's GDP revision. As a result of spending growing less quickly than income, the personal saving rate increased three-tenths to 4.8%.
2. The available data on healthcare spending in Q2 has not been consistent with the way we assumed the Commerce Department would continue to account for the Affordable Care Act, which would have resulted in a boost to growth.
Action Economics: Q2 GDP 2.5% from previous 3% expectation
Today's U.S. reports included an expected 0.4% personal income rise in May, but with a surprisingly weak spending trajectory through April and May that followed huge downward Q1 revisions revealed in yesterday's GDP report to leave a substantial downgrade in our growth estimates for Q2. We now expect a 2.5% (was 3.0%) real GDP growth rate in Q2 with an anemic 1.5% (was 2.7%) clip for real consumption as consumer caution has apparently increased.
Bank of Tokyo-Mitsubishi: "Don’t start betting on those 3% GDP numbers yet"
"Consumer spending was knocked back big from 3.1% to the slow-growth zone of 1% yesterday for the first quarter," he wrote in a note. "The second quarter bounce from the cold winter weather is not yet evident as spending is running just 1.2% through May. Don’t start betting on those 3% GDP numbers yet, but the report on July 30 will have the annual benchmark revision so the story could still change."
Barclays: 2.9% annualized Q2 growth, down from 4%
"On balance, this report suggests a more modest rebound in Q2 consumption growth following a softer Q1 than we had previously expected."
TD Ameritrade: cut to 3% from 3.6%.
"While there is plenty of scope for upside surprise on the inventory build and net exports on the quarter, the risks at this point tilt to 3.0% or lower rather than higher."
So it appears that Q2 GDP hope-fest is about to the same way as the over exuberant Q1 GDP expectations...
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Paging Mr Holme, Mr Sherlock Holmes. Please meet your No Shiat Sherlock Party in the lobby.
It appears the unicorms crapping skittles and belching sunshine are afraid.
Govt will release whatever number it needs to keep things going
yeah...don't worry we have a non-factual "sentiment" indicator tomorrow to save us all from reality
Oh GTFO with that crap Max!
The Gubmint can't do fucking SHIT about keeping anything going now!
And in case you haven't noticed.. it hasn't been working too well lately either!
We're fucked! So get used to it.
HB, Ponzi's can go on for a long time. Agree that the US is screwed. But when?
When it does go BOOM it's going to be vicious.
With us corporations buying their own stock to support their p/e and the central bank, who has a vested interest in the us economy, buying stocks worldwide, the us stock makets could keep going higher or flat. Either way, it may not tank for a couple more qtrs.
This article is wishful thinking. Hedging is a decent bet at this point anyway, lock it in.
Well, yes, but then there is that other reality:
"The Bond Guys Usually Get It Right."
10 year down to within smelling distance of 2.5% again.
You can do this in Zaire...but not in the USA...there's too much liquidity, innovation and mobility.
In short "recovery." So if you're establishing a "debt/inflation regime" governed through the use of "mental weapons of mass destruction" people will still seek out that which allows them to exist...survive...even thrive.
Everyone else playing this "game" simply eats themselves.
I would not be surprised to see a second quarter print of NEGATIVE five or even 7 percent here.
Dang! Just think of the rally -7% would get!
Compter algo do not care....only have but buttons......wtf
Just as turds swirl when you flush.
OK, that is a visual I did not need. lol
but the size of a turd bears no relation to the effort expended in producing it!
Goldman Sachs makes its living pissing on investors and explaining it as rain. That organization is as fraudulent as the US Federal Government. No surprise so many ex-Goldmanites take US government jobs.
Since 2008 I have had increase difficulty identifying where the banks end and government begins.
After Final Revisions, I'm going to estimate .5% growth. They will do whatever it takes to avoid the Recession tag. Or I suppose, they could just rewrite the definition of a Recession like they do with how to calculate Economic Data Reports.
actually q2=q1=-3.0 or less, but you can always blame hot summer and expect q3=8% =)
And there will be Treasury shorts jumping out of windows.
But we need to add in hookers, coke, and illegal immigrant spending and we will get to 3%. BTFD!!
sure not=)
of course you will.
just think about WHY they add hooking & drugs in the base of the math for the gdp... it is only to get positive numbers....
even a 9 years old whould guess that.
i think they already add, but they can do it twice,if you want
And don't forget that the crowd who get income tax refunds got them by the end of the first quarter. Meaning that their contribution to the "consumption" aspect of GDP already occurred before the 2nd quarter. The "delayers" either don't get a refund or are less inclined to immediately spend it.
Not good news for the 2nd qtr.
Here comes monster inventory building, whether you buy it or not is immaterial.
Think chinese ghost cities.
What a surprise
So, effectively for the first six months of the year, the economy will have contracted.
Who will be the first major economist to suggest Recession?
Tyler Durden
I've been saying we're actually in one for over a year.
I know I've been in one for over a year as well. And "these aren't ghost cities" but "ghost monies."
The City must therefore default as the "monies" no longer...if they ever did...exist.
you should add - "live economist"
Never mind with the correct deflator for GDP we have been negative
since 2005.
The emperor is prancing aroud with his dick slapping in the wind,
and everyone is ignoring it,except the rest of the world that is.
Dear Sir,
Is there a way to post warnings before such a acute but graphic imagery?
The spell checker on the MSM teleprompters is irreparably set to convert "recession" into "recovery."
criminal banks issuing lying self serving prognostications about totally fictional fascist gubbermint numbers.
what a bunch of tools. they still expect growth of 3-4% in Q2. get lost.
You have to expect that, without it we would need to recalculate current valuations causing a massive amount of correction in what has been priced in. IF 3 - 4% growth does not occur, that means that the "weather" excuse wasn't real, that the "pent up demand" suggestion isn't real and that of course, easy monetary policies do not always work and the Fed is quickly running out of tools on how to achieve all the value that has been priced into the market.
There was quite evidently wanking in the planking.
We now expect a 2.5% (was 3.0%) real GDP growth rate in Q2 with an anemic 1.5% (was 2.7%) clip for real consumption as consumer caution has apparently increased.
1) Translation = channel stuffing inventory build, which is not real growth.
2) "consumer caution" is laughable. When are consumers cautious about spending. They just don't have the dough or the credit to buy stuff.
There has been no inventory build...which by definition means we have not had a recovery. "Dropping dimes" as they say in Texas.
You have a recovery when you have an inventory build cuz "that shit ain't making money sitting on a shelf." This with zero demand prices must start to fall...collapse even...as "everything gets sent back to the bank again."
California still looks good here. So do a few other places that are so small they just never built up the debt in the first place.
"The people will move to where they can win."
Awesome! NICE job Fed! You've almost reached your 'goals' of complete implosion!
What a shit show! Do you think the US will actually get a positive in Q2?
No. Do I think the US will communicate to the masses that Q2 GDP was positive? Absolutely.
NEGATIVE Q2:
Positive Q2:
the fed can go blank themselves
Wait a GodDamn minute....
Yesterday: http://www.zerohedge.com/news/2014-06-25/goldman-boosts-q2-gdp-forecast-... That's Hatzius for 4.0%
Today: "Jan Hatzius who slashed his exuberant 4% Q2 GDP growth estimate to 3.5% (for now)"
That's it. Red Card. Take your seat. You don't get to play anymore due to gross cheating on GDP estimates. Oh - and you CAN bite me!
Fuckers are adjusting odds on y/y GDP faster than bookies at a dog track now.....seriously this is ridiculous. Go to hell you fuckstick bailed out bankster frauds.
We now have entered the "Bipolar" economy where all the trash is shoved in bad quarters and going forward we will have alternating GDP of -5% to +5%. But we will never have two quarters of negative GDP in a row, NEVER.
LMAO watching all the maggots squirm as the heat gets turned up.
"you can change the way things look, but you can't change reality" -Jim Grant
The Middle Class is DOA. I define the middle class as anyone who still has a job but cannot afford to buy their own politician, so guess what? It's You babe.
That's one way of looking at the middle class.
They threw the baby in with the sink in Q1. They will print a positive number , no matter what in Q2. No way they stick a Recession tag on the Mack Daddy.
+100
All those can be cut in half and they would still need revised down.
take Q1 in Q4 and lather, rinse, repeat for Q2
GS was funny - yesterday up to 4, today back down 3.5 - should give that GS Jan Hatzius turd a promotion
what's funniest is that yesterday was the 17th worst quarter in US history and top 25 worst quarters were all in recession, just not this one
you reading this Yellen?? how about you Krugman??? KRUGMANNNNNNNNNN!!!!!!!!!!!
No matter - the final GDP print will be a "beat" of the expectations.
The good news is the top 1% will save us all, through their caring and generosity they will lift us all. The middle class really don't count in the broader veiw, so kill them off.
/sarc
So... bullish for BTFD?
IOW, any asset will do, as long as it sops up all the liquidity spewing and flowing.
The purpose of State and quasi state media and economy planning organs is not to report the reality that is.
It is to explain:
- that 'everything is peaceful in Baghdad'
- destructive consequences of the policies of the State are not the failing, but goals (e.g. inflation is good)
sing with me everything is calm and normal in Baghdad
It's better to work with nominal GDP figures so that a realistic inflation adjustment can be made to determine real growth. The -2.9% 1st quarter annualized real GDP "growth" was -1.7% nominal, and -6.4% real if you use a 5% yearly inflation rate.
There's an election in November. Things will be forced to look good. Obama is already changing all the numbers. What used to be negative numbers are all now positive.
Phase 5 of the skittle defecating unicorns. Bigger and bolder deception.
THERE'S AN ELECTION IN NOVEMBER?????????????
NO SHIT????????
REALLY???????????????????
FUCK ME!
come on guys blizzard conditions have kept to consumer at home and with no electricity they couldnt even shop online! according to CNN money.
aah wait its June.............
But Goldman said the sun will come out tomorrow, tomorrow, tomorrow.
It's only one quarter away!
I'm betting o a 2% initial print to be revised down to 0 or maybe even negative (r-word) by the final. Of course by then everyone will be looking forward to the recovery which will be right around the corner... again.
Everything - and most especially the market - is now a subset of politics - i.e. Umbwee Wee needs a about another year to firmly nail the coffin of USSA shut.
Specifically November mid terms - they will keep it levitated until the than. Even if it is flat provable lies and the economy flatlines in Q2. The print will be +2.5 - 3%.
The Fed is now just an overt tool of the Out House.
It won't be long now before longs in the equity market realise that this patient is d e a d. With valuations sky high the run for the exit will be brutal. As i mentioned yesterday... show me the Buffett Indicator now. It was already off the charts, it will look ridiculous now.
great news! S&P to 2000, DOW to 17000, NQ to the moon!
All I can say with absolute certainty is the first # will be:
1. High
2. Wrong
3. Revised downward multiple times
4. Dismissed as meaningless 6 months hence
I do not see the snow yet, but it seams, that the banks forecast a heavy show storms.
Pardon, a Hurrican season.
why arent we counting hookers and blow? come on guys catch up....