What's Wrong With This Chart?

Tyler Durden's picture




 

The consensus estimate for US GDP growth in 2014 has collapsed. 4 months ago, the world of serial extrapolators and mean-reverters prognosticated that 2014 GDP would reach the lofty heights of 2.9%. Today - on the heels of numerous micro- and macro-fundamental realities, consensus US GDP growth for 2014 has been marked down to 1.7%. Is it any wonder US equity markets are within 1% of their all-time highs?

 

Don;t worry though - the Fed is still bullish:

  • *FED'S GEORGE SAYS 2014 U.S. GROWTH TO BE IN 2%-2.5% RANGE

You can't make this stuff up!!

Chart: Bloomberg

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Thu, 07/10/2014 - 15:46 | 4944669 slotmouth
slotmouth's picture

Looks like the normal death cross that we've come to expect with stocks v. gdp estimates.

Thu, 07/10/2014 - 15:49 | 4944682 Say What Again
Say What Again's picture

What's Wrong With This Chart?

The SP500 has not gone up as fast as it has in the past. Just look the 1980s thru 2000. We should be MUCH higher by now.

Thu, 07/10/2014 - 16:03 | 4944731 Ham-bone
Ham-bone's picture

What's wrong with this chart?

NO ARROWS!!!  Complete lack of arrows?  Without them I'm lost...

Thu, 07/10/2014 - 16:12 | 4944752 hedgeless_horseman
hedgeless_horseman's picture

 

 

Thank God I mortgaged the farm to buy the iShares 4X GDP deflator ETF!

\operatorname{GDP\ deflator} = \frac{\operatorname{Nominal\ GDP}}{\operatorname{Real\ GDP}}\times 100

In practice, the difference between the deflator and a price index like the Consumer price index (CPI) is often relatively small. On the other hand, with governments in developed countries increasingly utilizing price indexes for everything from fiscal and monetary planning to payments to social program recipients, the even small differences between inflation measures can shift budget revenues and expenses by millions or billions of dollars.

 

http://en.wikipedia.org/wiki/GDP_deflator

Thu, 07/10/2014 - 18:07 | 4945126 Headbanger
Headbanger's picture

What's wrong is that GDP estimate number isn't negative!

Duh!

Thu, 07/10/2014 - 19:20 | 4945451 Ben Ghazi
Ben Ghazi's picture

"What's wrong with this chart?"

Too Christmasy Bah Humbug!

Thu, 07/10/2014 - 16:07 | 4944761 starman
starman's picture

It's a lovely chart emerald green and ruby reds.I love it. 

Thu, 07/10/2014 - 16:02 | 4944734 knukles
knukles's picture

"Nothing's wrong with it.  As any idiot can see, the forecasts for GDP are too low!"
      -Maria Buttaroma, circa CNBS

Thu, 07/10/2014 - 16:02 | 4944736 NoDebt
NoDebt's picture

Up arrow.  I want my endless compound returns.  "I was promised!"

Thu, 07/10/2014 - 16:51 | 4944913 Silver Bug
Silver Bug's picture

Don't worry, Janet the Dove Yellen is standing by with dump truck loads of money. QE isn't going anywhere. It is here to stay.

 

http://jimrickards.blogspot.ca/

Thu, 07/10/2014 - 15:47 | 4944675 gdiamond22
gdiamond22's picture

Looks like the equation for QE and BTFD

Thu, 07/10/2014 - 15:50 | 4944688 101 years and c...
101 years and counting's picture

"whats wrong with this chart?"  this chart doesnt show the fed balance sheet? this doesnt show the 2020 GDP estimates? this doesnt show US GDP once the US adds sales of blow, blowjobs, etc, etc, etc.... 

Thu, 07/10/2014 - 15:50 | 4944695 Bernoulli
Bernoulli's picture

My estimate of 2014 US GDP: -2%.

Just a wild guess. But I'm being nice.

Thu, 07/10/2014 - 16:06 | 4944749 NoDebt
NoDebt's picture

We only speak in nominal terms 'round these parts, friend.  Nobody wants to hear about no fancy "in-flation" or "GDP deflator" talk from some damned furriner just because you were like some hotshot French Scientist or whatever.  ;)

Thu, 07/10/2014 - 15:51 | 4944697 buzzsaw99
buzzsaw99's picture

irrelevant

Thu, 07/10/2014 - 16:08 | 4944764 AccreditedEYE
AccreditedEYE's picture

All this correction stuff getting long in the tooth... when Uncle Carl comes out and talks about valuations and froth you know the move lower is done.

Thu, 07/10/2014 - 15:54 | 4944707 NOTaREALmerican
NOTaREALmerican's picture

The worse the news the better it is for stocks.  Buy now or be priced out forever!!

Thu, 07/10/2014 - 16:01 | 4944716 LawsofPhysics
LawsofPhysics's picture

Nothing.  With mark to fantasy accounting and no collateral requirements there are no more correlations and such.

"winning"

 

Stop trying to figure this "market" out and simply recognize the truth, there is no market for true price discovery.

Thu, 07/10/2014 - 16:00 | 4944718 undercover brother
undercover brother's picture

NOTHING.  Status quo of astonishing and unbelievable bullshit.    However, one thing we can take away from the chart and from the events of the last 5 years is that Fed monetary policy coupled with daily and/or implied interventions, trumps reality by a very wide margin.    

Thu, 07/10/2014 - 16:03 | 4944744 Bear
Bear's picture

I thought negative growth was a good thing ... FED must up the ante

Thu, 07/10/2014 - 16:29 | 4944837 Oldwood
Oldwood's picture

With the stock market on a constant upward climb and GDP forecasts so low, its just got to go up soon, its just gotta. This is a bullish sign if I have ever seen one.

Thu, 07/10/2014 - 16:03 | 4944745 replaceme
replaceme's picture

What is GDP, do they have an app?

Thu, 07/10/2014 - 16:10 | 4944784 overexposed
overexposed's picture

Gotta love those Fun-DURR-mentals!

Thu, 07/10/2014 - 16:13 | 4944791 crazybob369
crazybob369's picture

Man, that S&P chart looks like me after I overdosed on some Viagra. Don't need to tell you how it will look like once the stuff wears off.

Thu, 07/10/2014 - 16:47 | 4944892 Colonel Klink
Colonel Klink's picture

SQUIRREL!

Thu, 07/10/2014 - 17:07 | 4944953 ShrNfr
ShrNfr's picture

After a Q2 print of (maybe) +1%, you are going to have to go at 4%+ for Q3 and Q4 to get that 2%->2.5%. Ain't gonna happen. More downside revisions for the year.

Thu, 07/10/2014 - 17:22 | 4944991 oklaboy
oklaboy's picture

-2, calling -2,,do I hear -2???????

Thu, 07/10/2014 - 23:19 | 4946161 Homer E. Rectus
Homer E. Rectus's picture

I don't get it. I ain't a phd economist, but when they keep revising GDP more than a month after the Quarter ends, how can we have any confidence that they know what the whole year GDP is going to be?

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