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Why Financial Reporters Are Clueless: They Copy And Paste Keynesian/Wall Street Propaganda

Tyler Durden's picture




 

Submitted by David Stockman of Contra Corner blog,

This morning’s Q1 GDP revision might have been a wake-up call. After all, clocking in a -2.9%—-cold winter or no—it was the worst number posted since the dark days of Q1 2009. Well, actually, it was the fourth worst quarterly GDP shrinkage since Ronald Reagan declared it was morning again in American 30 years ago.

Stated differently, 116 of the 120 quarterly GDP prints since that time have been better. Even when you adjust for the Q1 inventory “payback” for the bloated GDP figures late last year, real GDP still contracted at a -1.2% annually rate.

Still, within minutes of the 8:30AM release, the Wall Street Journal’s news update did not fail to trot out the “do not be troubled” mantra. Not only did “…early second-quarter data indicates the economy has improved this spring as warmer weather helped release some pent-up demand” , but the reader was also advised in a declarative sentence that the US economy’s real growth capacity is far higher, implying that Q1 results were some kind of freakish aberration:

…growth over the first six months of the year likely fell below….. the U.S. economy’s longer term growth rate of just over 3%.

Well, here’s real GDP since the turn of the century. The average real growth rate is about 1.8%—-barely half the cited figure.  So where does the 3% growth rate for “potential GDP” come from, then?  The answer is that its Keynesian writ, and the pretext for the Fed’s endless monetary “accommodation” .

 

 

But doesn’t an actual 14-year trend trump theories that have become self-evidently irrelevant and macro-models that have been chronically wrong?  In fact, the 3% potential GDP growth narrative is mocked by the fundamental arithmetic of true economic growth—-which is to say, labor hour gains and capital investment.

During 2013 the private business economy generated 194 billion labor hours—the same figure as 1998.  Likewise, real investment in productive plant and equipment assets since 2000 has barely inched forward at a 0.8% annual rate—-or by less than 30% of its pre-2000 trend rate. In light of these virtually zero growth fundamentals, how could the Keynesian 3% potential GDP expansion model be presented as an axiomatic given?

So too with the winter weather bugaboo.

Residential investment …..fell by a 4.2% pace in the first quarter, revised from the previous estimate of a 5% fall. The housing market rebound, an important growth driver earlier in the recovery, was derailed in late 2013 by cold winter weather and rising mortgage rates.

Well, winter must have started in October.

 

 

 

When the daily narrative is this lame it is no wonder that our happy talk financial system drifts toward the wall. The Cool-Aid drinkers have simply lost touch with reality.

 

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Thu, 06/26/2014 - 15:14 | 4899153 Harbanger
Harbanger's picture

The Media Rules The World.

Thu, 06/26/2014 - 15:17 | 4899183 localsavage
localsavage's picture

This is all OK because the MSM just copy and pastes this administrations BS and reports it as fact.

Thu, 06/26/2014 - 15:27 | 4899233 TeamDepends
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Shrinkage due to cold, cold winter.

Thu, 06/26/2014 - 17:01 | 4899693 TexasAggie
TexasAggie's picture

The MSM must have had their balls and ick exposed to the weather to account for the real shrinkage. 

Thu, 06/26/2014 - 16:39 | 4899606 Ignatius
Ignatius's picture

All MSM narratives are tightly controlled.

Propaganda and lies are the order of the day.

Thu, 06/26/2014 - 15:19 | 4899192 orangegeek
orangegeek's picture

there's this little thing called the internet that has changed that

 

MSM is over for many

 

and then there's ZH - mopping the floor with all the bullshit finance sources, at no cost to the user  - it doesn't get any better

Thu, 06/26/2014 - 15:29 | 4899237 DaddyO
DaddyO's picture

The internet has been wonderful for turning the tide on the MSM and their controllers.

It's important to note who owns the AP, Gaurdian and other assorted outlets.

Let's just say most of us don't belong to that tribe.

ZH is without peer in terms of financial reporting, although I will say that the last few months have seen some disheartening trends in quality, scope and focus.

That's my .02 anyways...

DaddyO

Thu, 06/26/2014 - 15:39 | 4899293 Save_America1st
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That's why the MSM wants a "fairness doctrine" again in order to wipe out any truth in broadcasting on the radio, cable, tv, internet, etc.

That's why the globalists want to shut down the internet or institute draconian laws that prohibit free flow of information or ban you if you defy their "rules".

That's why the so-called "alternative media" of the internet is actually the REAL media and has taken over all the truth outlets that the lame-stream media has shit upon and wasted along with what credibility they may have had up until about 10 years ago.  The MSM is now the has-been media and real media is what used to be the so-called alternative media. 

We all know this very well now.  So the next questions will be:  Can they keep it true?  Can the new main-stream media stay true to the principles and values of truth in reporting and not be corrupted by their growing strength and not get corrupted from within by the has-been media scum, the politicians, and the globalists who will dangle rewards of massive wealth in front of those people to lure them away from the truth.

If they stay strong and never waiver then good.  If they allow themselves to be overtaken and corrupted then kiss everything you knew goodbye because that'll be the last time we see truth in media on this planet ever again.  If the internet is allowed to be taken over or taken down it'll be like going back to the dark ages. 

Just as the scum of the Earth would like it to be. 

Thu, 06/26/2014 - 15:29 | 4899244 CrashisOptimistic
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Another of many reasonably good comments you have made. 

Look, people, look the fuck around.

They clocked in this number after trillions of monetary stimulus, trillions in fiscal stimulus and a supposed oil boom.  This number is **given** unprecedented stimulative events -- and it was still disastrous.

It's Not Going To Get Any Better. 

Economics is bullshit.  Oil is everything.  Absolutely fucking everything.  Oil drove the 20th century and did we all think that it would pump with nearly zero effort forever?

It's all going to fail.  You're not going to be told anywhere but here that it's going to fail, in fact, the MSM will tell you the future is blinding bright.

It's not.  Oil drives it all and it is in decline.  Stimulate and pretend all you want.  It's all going to fail.

Thu, 06/26/2014 - 15:53 | 4899362 Eyeroller
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When?

Will they be able to keep the house of cards together before Barry leaves office?

Thu, 06/26/2014 - 16:06 | 4899432 CrashisOptimistic
CrashisOptimistic's picture

Why do you need to know when?

Thu, 06/26/2014 - 15:30 | 4899245 Rainman
Rainman's picture

And Corporati rules the Media .... dressed it up for ya.

Thu, 06/26/2014 - 15:15 | 4899162 Comte d'herblay
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"Financial reporting" by clueless liberal arts majors who don't know a supply from demand, is an oxy MORON.  

 

It's like the comics.  Some truth in the humor, complicated by mostly jive. But with the laughs. 

Thu, 06/26/2014 - 15:26 | 4899220 crazzziecanuck
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John Ralston Saul wrote that reality was not in the world, it was in the measurements made by professionals.

And the professionals here are paid so they never disappoint whoever signs their paycheques.

Thu, 06/26/2014 - 15:15 | 4899167 optimator
optimator's picture

Just add what the FED prints/wires to the GDP number and its "fixed" again.

Thu, 06/26/2014 - 15:17 | 4899178 Seasmoke
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The 20 worst Qs, were all during Recession-Depression.

Just not #4 Worst.

Thu, 06/26/2014 - 15:18 | 4899187 buzzsaw99
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It isn't Cool-Aid, it's Kool Aid. Actually it wasn't Kool Aid either it was Grape Flavor Aid, but continue bashing the pitiful reporting of others as before. :roll:

Thu, 06/26/2014 - 15:28 | 4899230 disabledvet
disabledvet's picture

I think the Kool Aid dude just smashed through the Party again.

This number was only a surprise to the dopes who believed in last years number...which also turned into a huge miss.

The big one will be the next one because while GDP might be considered "in the past" forecasting the next print sure isn't.

The market knows something because rallying on said news tis a bad omen indeed. "Dark Pools of DB"? The whole thing is a "Dark Pool"???

Have the Germans ever rebuilt that building?

Thu, 06/26/2014 - 15:22 | 4899210 Bunga Bunga
Bunga Bunga's picture

California had one of the best winters ever, warm and sunny.

Thu, 06/26/2014 - 15:26 | 4899226 Kirk2NCC1701
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These days, more so than ever, it's all about making it to the top of the Infotainment Industry.

You just need the right demographic packaging, some looks, a few good lines and positivity -- while networking and fluffing like crazy at the right parties.  You may even want to change your last name or marry into one.  And you've got it made.

Thu, 06/26/2014 - 15:26 | 4899227 madcows
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I met a self proclaimed Keynsian at a BBQ a couple weeks ago.  We were all having a nice time and he just came out.  started talking about how Keynes was promoting his theories in the 30's, but they didn't listen.  Then, BAM.  WWII.  WWII was Keynes in full action.  everybody had a government job.  this worked for the US, Japan, Europe.  everybody.  Government is the spender of last resort... and the US just hasn't spent enough...

I just got up and left.  17 trillion in debt and we haven't spent enough.  oh, and every nation came out of the war in great financial shape.  holy fuck, you can't make this shit up.

Thu, 06/26/2014 - 15:30 | 4899246 insanelysane
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Did he show up with empty tupperware containers in case there happened to be leftovers???

Thu, 06/26/2014 - 15:48 | 4899330 SmallerGovNow2
SmallerGovNow2's picture

LOL, that was some funny shit right there i shit you not...

Thu, 06/26/2014 - 15:58 | 4899391 lasvegaspersona
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Advise your Keynesian friend to borrow heavily to consume. Saving is a sin.

Thu, 06/26/2014 - 15:27 | 4899229 alien-IQ
alien-IQ's picture

This is the US stock market: Reality has no place here.

We have indexes for "hope" and "confidence" for fuck sake. Does that sound like a market that gives a shit about reality?

Thu, 06/26/2014 - 15:28 | 4899232 insanelysane
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Worst recession, worst recovery, worst winter, worst <input>

Thu, 06/26/2014 - 15:56 | 4899241 SameAsItEverWas
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This is nothing other than the age-old divide between science and religion, n'est pas? Or blind faith versus open eyes.

95 years ago in the U.S. it was the battle over whether the entire world was created in 6 days or if it took forever.  Tennesse v. John Scopes, William Jennings Bryan v. Clarence Darrow.

500 years ago it was about whether or not this earh was the center of the universe; and there were plenty of people back then who thought the earth was flat and not round.  Galileo was kept under house arrest for heresy.

These days people who tell the truth are either ignored as kooks or if they make themselves a pest they're murdered or framed and imprsoned, like Col. Scott Ritter, USMC, who had the nerve to challenge the WMD crock as pretext for deposing Saddam Hussein and ended up in PA state prison for soliciting sex with a minor.

Be careful, folks!

Nu, So what else is new? 

I'll tell you.  The "Ministry of Truth" envisioned by George Orwell in the book he originally titled 1948 was a centralized function of government controlled by the state.  I've been doing a tremedous amout of reading on sociological theories of government and I cannot find anyone who anticipated that this type of control need not be authoritarian and directed from above as Orwell had it.  Orwell did not anticipate that "private sector" journalists and academics would VOLUNTARILY all join together to present a world view to "the public" that was entirely false.  It's mind boggling to think about that.

I'm presently wearing a 9/11 Inside Job t-shirt and sitting in a student union building writing this with my laptop connected to the internet on a 1 GB/s ethernet wire plugged into the wall and using a proxy server far far away to post this anonymously and because of the "non-PC" stickers on my status-symbol Panasonic CF-52 nobody on this college campus dares to speak to me because I'm a threat to their entire worldview. 

So that's why there are no academic historians who have written about all the changes since Y2K and the 100 years of perpetual war for perpetual peace as being a huge fraud and the fact that the US is not evil empire in world history.  Anyone who can see the reality is afraid to speak of it.  They're terrified!  Who knows? Maybe I'm a spy from DHS.  I know there are people here who know it's all a lie, but unlike the dissidents in Stalin's Russia who risked the gulag to spread samizdat truth ... here the only people willing to speak to me say things like "you're probably not even Jewish you know" as if it makes any difference if some of my ancestors were "Khazars" and converted in 1070 AD.  If they talked to me about Zionism and its evils I'd tell them that Israel is an illegal state which has nothing to do with me and that just because there are people who claim to be Jewish who do evil things does not mean that all Jews are born evil and that's that.

And then there's the "Sovereigns" who don't understand the their precious Constitution was a tool of oppression from the very beginning and that the creation of DC was part of the settlement of the Civil War, whichh if they took their principles seriously the Sovereigns would realize that they'd be on the side of J.C. Calhoun and SC seceding to protect their God-given right to keep their property in the form of slaves.

Thu, 06/26/2014 - 15:57 | 4899383 Jackagain
Jackagain's picture

The so-called scientists of the day thought the Earth was flat.

It is He who sits above the circle of the earth,
And its inhabitants are like grasshoppers,
Who stretches out the heavens like a curtain,
And spreads them out like a tent to dwell in. Isa. 40:22

How long ago did the scientist figure out that the universe was expanding?

 

He stretches out the north over empty space;
He hangs the earth on nothing. Job. 26:7 

 

Atlas anyone?

Thu, 06/26/2014 - 16:16 | 4899497 nodhannum
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Science as in "The Static Universe Model" that said there was no "Then There Was Light"?  Science as Margaret Sanger's "Eugenics" and her associates donation of the T4 program ti the Nazi's? Science as in the phony extreme scare about DDT which after being banned ended up with the biggest genocide of third world people due to Malaria (quietly put back on the market by the UN in early 21st century)?  Science as in the "Silicone Implants cause...fill in the blanks...later found to absolutely phoney and agaion quiety put back on the market but not after bankrupting dozens of companies?  Science as in the "Global Warming" scam now unraveling.  Scheister science backed by money grubbers and medicine men will give religion a good name.

Thu, 06/26/2014 - 15:30 | 4899247 AcidRastaHead
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I particularly like the phrase "... winter weather bugaboo"

Thu, 06/26/2014 - 15:30 | 4899248 madcows
madcows's picture

Joe Biden:  "you gotta spend (aka borrow) money to keep from going bankrupt?"

https://www.youtube.com/watch?v=LHFEcyUNBjg

Thu, 06/26/2014 - 15:47 | 4899324 insanelysane
Thu, 06/26/2014 - 15:54 | 4899366 lasvegaspersona
lasvegaspersona's picture

Sorry but ignorance and laziness are usually the correct answers (kinda like 'C' on a multiple choice test) but in this case I have to go with 'maintaining morale' and 'lying to hide the awful truth'. -2.9% is kinda almost huge. Simply dismissing it rather than screaming 'holy fuck' on live TV is too much of a difference in behavior to attribute to 'biz as usual' laziness. We are clearly seeing orchestrated information handling. This is better than Prada and Isvestia at their peak. We should be proud....we are finally beating the Ruskies at their own game.

Next....War is Peace...

Thu, 06/26/2014 - 15:56 | 4899378 Al Huxley
Al Huxley's picture

I heard on the news that the reason the market has reacted positively to the -2.9% number is that 'there's an expectation that things can only improve from here' and in the same report 'it's baffling, because other than the bad numbers being reported, the economy as a whole is doing really well'.   I thought I was listening to The Onion.  The fact that these assholes actually get to broadcast that kind of ridiculous shit says a lot about who they're owned by and working for.

Thu, 06/26/2014 - 16:05 | 4899402 Al Huxley
Al Huxley's picture

Also, I don't know about the rest of you, but wow, winter really caught me off guard this year.  I don't recall it ever getting cold in January before, why it was such a shock that I didn't buy anything for months.  I hope this 'cold weather in January and February' doesn't become some kind of recurring phenomenom.  Again, the fact that these assholes can without blinking an eye blame bad economic numbers on 'cold weather in the winter' just fucking boggles my mind.  How low we have sunk...  Actually, why stop there?  Maybe bad Q2 numbers can be blamed on 'unexpectedly dark nights', or 'unexpectedly wet rain'.

Thu, 06/26/2014 - 19:23 | 4900197 Bazza McKenzie
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That's climate change for you.  In reality the world's getting hotter but because of those stark raving mad deniers, the heat has been forced to hide in the deepest oceans.  That's why you're getting cold in January and February.

Give more money to Al Gore and he'll fix it somehow.

Thu, 06/26/2014 - 16:08 | 4899445 lasvegaspersona
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What a predicament for the guessers. If they forecast too high they look silly when they are wrong (except that few remember the forecast months later)....too low and it seems all pesimistic an shit.

I'll bet the next number cannot have a minus sign in fronto f it ...that would require official admission that we are in 'another' recession (defined as 2 consecutive quarters of negative GDP).

Of course the GDP is itself so maleable that I am shocked that they allowed it to be corrected to negative in the first place. It is almost like real numbers were accidently used.

Thu, 06/26/2014 - 16:08 | 4899446 MuleRider
MuleRider's picture

I'd sooner turn a chimp loose in MS Excel and let him run wild with the =TREND() function and listen to that than pay attention to the Keynesian/statist circus and shit-show and their take on what our "potential" is and what the "outlook" should be as a result. 

Thu, 06/26/2014 - 16:17 | 4899502 A Cruel Accountant
A Cruel Accountant's picture

I just fixed my snowblower instead of buying a new one. Not recorded in the GDP and not taxed. Shove that up your GDP.

Thu, 06/26/2014 - 16:57 | 4899672 Cacete de Ouro
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ZH is becoming timid for whatever reason. Failing to go where it might cause some controversy. As if taken over by a minder. Prove me wrong.

Thu, 06/26/2014 - 19:42 | 4900257 DaddyO
DaddyO's picture

Spot on, in my opinion!

DaddyO

Thu, 06/26/2014 - 18:16 | 4899982 Duc888
Duc888's picture

 

 

People really need to turn off the Stupid Box.

 

It really is sooooooooooooooo 1980's.

Thu, 06/26/2014 - 20:50 | 4900501 TeraByte
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Propaganda has always been the favourite, last defence line for failed regimes. They cannot change the reality, but tell instead "raising daily chocolate rations from 30g to 20g". Like in Soviet, some of today´s  establishment must realize, how really terrible many fundamentals are, but obviously it is too late to avoid the fate and therefore mumbling the old mantra continues until..........

Thu, 06/26/2014 - 21:34 | 4900659 AdvancingTime
AdvancingTime's picture

The economic recovery that the media and talking heads have been bantering around does not exist and is just a myth. A manipulated stock market distorted by recent economic policy hides and mask the real truth, in many ways it is ground zero in the war to convince us all is well.

The American people and Main Street will tell you they are far from convinced that it is smooth sailing ahead. Huge weakness in the economy has been shown by numbers that barely get by even after record amounts of stimulus. Fact is if QE or the massive government deficit spending that props up our economy is removed it will fold like a cheap umbrella.

Recent changes in how the GDP is figured , which boosted growth thus reducing the debt to growth ratio, and attempts to spin poor numbers regarding employment have been met with skepticism. More on this subject in the article below.

http://brucewilds.blogspot.com/2013/10/myth-of-economic-recovery.html

 

 

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