Alternative Measures Suggest Weaker Economy

Tyler Durden's picture

Submitted by Lance Roberts of STA Wealth Management,


Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Cattender's picture

NOOOOOO!!!!! It's A Fucking RECOVERY!!!!! Goddamn it!!!!!

TeethVillage88s's picture

One Big Problem.

The GDP has to Grow by 5.6% Annually to keep up with Growth of Federal Spending which is now $17.6 Trillion in Federal Debt.

But maybe I am more of a budget kind of guy than the Author of Article.

- Fake, Narrow, Corrupt, low Utility Government Statistics in GDP, Inflation, Unemployment, Social Stability, Future Tax Base, Future Consumption, Etc
- Fake Narrative of the Cost of War, Financial Health of Nation, $17.6 Trillion in Federal Debt, Low Velocity of Money, Eroding Demographics, and meaning of $59 Trillion in Total US Debt

LawsofPhysics's picture

The jubilee will not be televised motherfuckers.

TeethVillage88s's picture

Would that be the one where bankers & Corporations get their Debt Whipped out for free?

Cause Otherwise I guess you mean collapse.

Ben Ghazi's picture

"The Jubilee will not be televised motherfuckers".


Sure it will, on CNBC

"The S&P 500 is down another 150 points today, but we are off the lows of the trading session."

A Nanny Moose's picture

Check your premise.


aVileRat's picture

In a very ironic move, ZH has argued against itself for higher rates (and bond normalization). Well done.

As the fed winds down, and Sept/Oct monetary interventions show a slowing increases in labor demand (stalling return of the us blue collar's to the U-90) the fed will recognize that raising rates will send the building/industrials into a double dip recession. As such, the market will take the sign of limited rate risk as stable policy that will in turn provide it's own confidence for executives to begin considering plant expansion & transaction interest. Margin compression and collapsing demand will force M&A and capital expansion amid the stable enviro to take center stage.

In a roundabout way, that level of stability + market risk of an uncertain future has been (as ZH has well documented) one of the key reasons "animal spirits" have not comitted large capital to more illiquid asset allocation such as long term labor contracts or prolonged bonus programs.

Any attempt to bring bond vigilante actions to the US-T would I suspect force the Fed to enter the market again in order to prevent a EU and JPY led collapse.

If 1987 happens, again, it will come from Inversions or another equally Bone-head move. I suspect that day will come sooner rather than later; if current PAC politics is any true leading indicator of Fiscal policy for October stumps.

Edit: Poster below me gets it, Commodity inflation is going to come from the exogenous shock when people realize Russia & the big white elephants are going to take long-term supply off the table either via Activism or Political greed (Putina). In 1998 dollars, the true price of a barrel of Brent is about 125 if you roll in all the M2 generated since 2003.


Carpenter1's picture

I don't believe for one nanosecond that there is ANY actual growth occurring, therefore I care not to discuss fraudulent govt data.


Big corporations can't show a profit without financial engineering, and can't grow their EPS without buying back huge amounts of their own shares...and you expect me to believe there's growth in the economy? 



dirtyfiles's picture

its only one way or you r the terrorist...

TeethVillage88s's picture

Here is another guy (author) that wants commodity prices to rise.

That is Ass-Backwards. Commodities chart doesn't help.

Jobs are not coming back. Productivity is up due to Computers, Automation, Robots, Off shoring & Outsourcing.

Inflation of Commodities is a threat in view of the Restructuring in the US Labor Market characterized by fewer workers, fewer good full time jobs, more with 2 part time jobs, fewer benefits, fewer durable goods produced, less manufacturing, downward price pressure on Service Job Wages... and on and on.

And Pensions have dried up and are under funded. They are even being forced to reduce benefits to keep the government pension guarantee agency from paying out more of it's already broken budget. Old people have to work, savings are gone, Consumption is down, people are downsizing cars, houses, apartments...

It is not your Grand Fathers Economy. Oh wait yet it is like before WWII.

USA Got Austerity after peaking of Labor Benefits 1970-1980s. 1979 was the peak in Manufacturing. Now the Government doesn't really have to apply Austerity.

We are already downsizing expectations, housing, apartments, and Transportation. Consumer Markets are Shrinking.

MATA HAIRY's picture

you wrote:

Let's do some quick math. Real, inflation-adjusted, Gross Domestic Product (GDP) for the first quarter of 2014 was -2.13% annualized after being revised slightly higher from -2.96%. The first estimate of the second quarter's economic growth was 3.89% annualized. If we average the two together, the first half of 2014 is currently sporting an annualized growth rate of 0.88%. Got it?





But 3.89 + (-2.13) is 1.76. That is the annualized growth rate of the first two quarters. You divided that by 2 and got .88. But it should be 1.76. You should not have divided.

To make up for that deficit from 2.4. the next two quarters would have to be 2.4 minus 1.76 (= .64) above 2.4, which means they have to average 2.4 + .64 = 3.04.


I agree that the establishment is always too optimistic. And retail sales clearly show that we are headed for a downturn, although a recession is probably two years or so in the future.


But your figures here are not convincing.

TheRideNeverEnds's picture

I think we all know that since the economy and the market are inversely correlated these days this is exceedingly bullish for equities.

q99x2's picture


BTFD bitchez.

AdvancingTime's picture

We may soon be forced to face our economic Armageddon. The forces that have driven stock markets ever-higher and upward may be beginning to wane. Many markets became distorted years ago when QE and super low interest rates hit the economy in an effort to lessen many of the missteps of recent years.

This has been more helpful in holding up the underlying value of assets and derivatives it now appears than helping to repair a wounded economy. QE has up to now stopped an implosion of derivatives including the resulting contagion and shock that would have spread throughout the financial system. Unfortunately the economy has not fared as well as these asset prices and in many ways these policies have harmed Main Street. More on this subject in the article below,