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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slotmouth's picture

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

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.

Ham-bone's picture

What's wrong with this chart?

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

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

Headbanger's picture

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

Duh!

Ben Ghazi's picture

"What's wrong with this chart?"

Too Christmasy Bah Humbug!

starman's picture

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

knukles's picture

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

NoDebt's picture

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

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/

gdiamond22's picture

Looks like the equation for QE and BTFD

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.... 

Bernoulli's picture

My estimate of 2014 US GDP: -2%.

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

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.  ;)

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.

NOTaREALmerican's picture

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

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.

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.    

Bear's picture

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

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.

replaceme's picture

What is GDP, do they have an app?

overexposed's picture

Gotta love those Fun-DURR-mentals!

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.

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.

oklaboy's picture

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

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?