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CBO "Revises" Its 2014 GDP Forecast, Hilarity Ensues (As Always)

Tyler Durden's picture




 

The gross, in fact epic, incompetence of the Congressional Budget Office when it comes to doing its only job, forecasting the future state of the US economy, has previously been extensively documented here (and here and here and here). This incompetence is in the spotlight once again this morning with the CBO's release of its latest forecast revision of its original February 2014 projection.

And while every aspect of the revised projection has changed, in an adverse direction of course, the punchline is the chart below: the CBO's revised projection for 2014 GDP. It's one of those "no comment necessary" visuals.

Surprising? Hardly. After all the CBO is swarming with indoctrinated Keynesian cultists whose only achievement in life is to be wrong about everything (and then to blame the Fed for not "easing enough"). Here is how the CBO "explains" this 50%+ cut in its forecast in just 6 months:

CBO has lowered its projection of real growth of GDP in  2014 from 3.1 percent to 1.5 percent, reflecting the surprising economic weakness in the first half of the year.

Which as other Keynesian talking heads have already made quite clear was due to snow. That's right: over $100 billion in forecast economic growth "evaporated" from the US economy because it... snowed.

The good news? The CBO refuses to forecast the "harsh weather" for the foreseeable future, and has kept all of its 2015 and onward GDP estimates as is. So when things go horribly wrong to the CBO's forecast, which is 100% guaranteed to happen, the CBO can again blame "surprising economic weakness" because, well, everyone else is doing it.

Those who wish to waste their time can find the source here.

 

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Wed, 08/27/2014 - 11:25 | 5149251 kliguy38
kliguy38's picture

hey ...its an honest mistake..;-)

Wed, 08/27/2014 - 11:28 | 5149265 espirit
espirit's picture

How much did these charts cost us?

I mean WTF - lmao.

Wed, 08/27/2014 - 11:32 | 5149280 NotApplicable
NotApplicable's picture

Incompetence? Tyler why do you provide cover for blatantly criminal activities?

Wed, 08/27/2014 - 11:39 | 5149304 GetZeeGold
GetZeeGold's picture

 

 

It's OK.....that's a hell of a lot of pressure to be under.

 

Mulligans all around.

Wed, 08/27/2014 - 11:42 | 5149321 gmrpeabody
gmrpeabody's picture

Perhaps they could save some money if they didn't use colored charts...

Wed, 08/27/2014 - 12:53 | 5149660 Pool Shark
Pool Shark's picture

 

 

I will offer to takeover the CBO's job of forecasting GDP for the reasonable sum of just $1 million per year.

I guarantee that (just like the CBO) actual GDP will fall within 100% of my projections.

So, what say you?

 

Wed, 08/27/2014 - 13:13 | 5149782 Save_America1st
Save_America1st's picture

Well this should be great fucking news for the CBO and the rest of the Keynesian Creeps:

There's a verrrrry looooong, cooooold winter a comin'....

Wed, 08/27/2014 - 14:07 | 5150100 BKbroiler
BKbroiler's picture

I have a cost saving measure.  Replace the CBO with a dartbboard of GDP numbers and a drunk frat kid, I guarantee higher accurancy.

Wed, 08/27/2014 - 11:46 | 5149340 dontgoforit
dontgoforit's picture

I believe they're on their 6th mulligan and they still aren't out of the tee box.

Wed, 08/27/2014 - 13:45 | 5149968 mccoyspace
mccoyspace's picture

One and Done, baby. Just look at the chart.

Wed, 08/27/2014 - 11:37 | 5149298 Zirpedge
Zirpedge's picture

GDP  is an obsolete relic of the idustrial age. The post industrial era is beyond producing objects and viewing ourselves as consumers. We are world citizens who need to understand our place in the universe and seek happiness and contentment in the manufactured landscape of central planning.

Wed, 08/27/2014 - 11:40 | 5149315 Al Huxley
Al Huxley's picture

OK, sure.  But the polite thing to do is play along and let the economists feel like they're doing something important.  We all have a role to play in the new world order.

Wed, 08/27/2014 - 11:43 | 5149329 gmrpeabody
gmrpeabody's picture

Excellent post, Al. We are all being vastly impolite...

Wed, 08/27/2014 - 11:40 | 5149319 dontgoforit
dontgoforit's picture

Teats on a boar hog and all that.

Wed, 08/27/2014 - 11:49 | 5149351 Dr Strangemember
Dr Strangemember's picture

Not sure which is worse, the annual Hurricane Predition # or CBO expectations?  Whichever, why bother???

Wed, 08/27/2014 - 13:52 | 5150010 doctor10
doctor10's picture

In most parts of the USA being so wrong professionally is a pretty quick route to a judge and jury -up on malpractice charges.

Wed, 08/27/2014 - 14:55 | 5150496 SeattleBruce
SeattleBruce's picture

Or at least getting permanently fired.  (I don't think we have the political will yet to actually hold lawbreakers accountable to legal punishment - as we've seen plainly with Obama, Holder, and Bush's crop of lovelies, etc.)  And we know how many bills are written on the backs of these awesome CBO estimates, and how many have been in the past (Medicare, Medicaid, on and on...)  Any wonder the USG over $100Tr. in current and future debt liabilities, with these boys and girls counting?

Wed, 08/27/2014 - 11:26 | 5149254 Pairadimes
Pairadimes's picture

More hockey sticks than the Stanley Cup.

Wed, 08/27/2014 - 11:29 | 5149263 joego1
joego1's picture

CBO "Central Bullshiter Operations"

Wed, 08/27/2014 - 11:31 | 5149268 Lendo
Lendo's picture

Loving the "LOL!" caption for 2014.  

Thit chart will piss many people off.  Especially the jamokes touting the recovery.

Wed, 08/27/2014 - 11:30 | 5149270 Dr. Engali
Dr. Engali's picture

I don't think there is one institution left in this country that isn't  completly corrupted and fucked up. If a big dumb guy like me from Indian knows where things are headed then surely they know the truth as well. Which can only mean that when it's really bad you have to lie.

Wed, 08/27/2014 - 11:32 | 5149281 Grande Tetons
Grande Tetons's picture

Do bears still shit in the woods in Indiana too?

Wed, 08/27/2014 - 11:38 | 5149297 Dr. Engali
Dr. Engali's picture

Sixteen years and I've never seen a bear here. I did see a fine herd of deer this morning and they looked nice and healthy. It's going to be a good harvest this year.

Wed, 08/27/2014 - 11:40 | 5149318 Grande Tetons
Grande Tetons's picture

http://hunt-indiana.com/thread/49700/black-population-moving-closer-indiana

Well, when the show up...pretty sure they will be shitting in the woods. 

Wed, 08/27/2014 - 11:42 | 5149324 dontgoforit
dontgoforit's picture

Or in the yard if the spirit moves them, so to speak.

Wed, 08/27/2014 - 12:58 | 5149697 TuPhat
TuPhat's picture

You probably have bears in the Tetons and the article you posted said they are getting close to Indiana but Texas ain't got no bears and we don't want any.  We'll shoot them faster than we would an alien.

Wed, 08/27/2014 - 12:11 | 5149444 arby63
arby63's picture

Trust only your local gun store, auto repair shop and butcher. Question everything after that.

Wed, 08/27/2014 - 12:19 | 5149485 Dame Ednas Possum
Dame Ednas Possum's picture

Everything is going exactly according to their (TPTB) plan.

Buckle-up for the next great redistribution of wealth up the food-chain.

“In the magical universe there are no coincidences and there are no accidents. Nothing happens unless someone wills it to happen.”

William S. Burroughs

Keep stackin' brethren...and happy boating.

Wed, 08/27/2014 - 11:35 | 5149284 Bam_Man
Bam_Man's picture

With all the pretty red, white and green (and downward GDP revisions), I thought it was an article about Italy. Madonna!!

Wed, 08/27/2014 - 11:35 | 5149292 Bay of Pigs
Bay of Pigs's picture

Just wait until it snows again. The we'll really be in trouble.

Wed, 08/27/2014 - 11:38 | 5149301 Al Huxley
Al Huxley's picture

This is terrible!  What if it snows this winter?  What the fuck happens to the economy then?  Damn this weather phenomenon!

Wed, 08/27/2014 - 11:42 | 5149312 Dr. Engali
Dr. Engali's picture

Farmer's almanac says it's going to be a cold one this year.:

 

 

http://abcnews.go.com/Weird/wireStory/farmers-almanac-predicts-nasty-win...

Wed, 08/27/2014 - 11:41 | 5149317 GetZeeGold
GetZeeGold's picture

 

 

What? We just got through winter this summer.....where has the time gone?

Wed, 08/27/2014 - 15:00 | 5150534 SeattleBruce
SeattleBruce's picture

Where's the huge economic surge they promised coming out of that? ;)

Wed, 08/27/2014 - 11:42 | 5149325 Cattender
Cattender's picture

Jesus.. SNOW!?!? OMFG.. that could fuck up Everything for the Entire Year!

Wed, 08/27/2014 - 11:48 | 5149350 dontgoforit
dontgoforit's picture

It's global warming.

Wed, 08/27/2014 - 11:39 | 5149305 reset71
reset71's picture

Is it just me or do the years start running backward on the chart?  I think the CBO be smokin' the strong stuff while on the job.

Wed, 08/27/2014 - 11:48 | 5149327 IOU
IOU's picture

Time travel predicted in the last chart!

Wed, 08/27/2014 - 11:45 | 5149336 TomGa
TomGa's picture

But, but, but Ambrose Evans-Pritchard said the US recovery was underway at 3% !

/sarc

Wed, 08/27/2014 - 11:46 | 5149341 Cthonic
Cthonic's picture

Maybe Ambrose might now more fully appreciate Lars point of view of American economic statistics...

Wed, 08/27/2014 - 11:46 | 5149343 q99x2
q99x2's picture

FRAUD is dangerous not hilarious.

Wed, 08/27/2014 - 15:47 | 5150781 JRobby
JRobby's picture

But when everyone knows it's fraud? Heads nod up and down: "that seems more correct, yes". It's fuck total Kabuki, theater of the absurd. Yes comical.

 

Like brains numbed by novocaine.

Wed, 08/27/2014 - 11:54 | 5149353 John Law Lives
John Law Lives's picture

"CBO has lowered its projection of real growth of GDP in 2014 from 3.1 percent to 1.5 percent, reflecting the surprising economic weakness in the first half of the year."

Don't you see the brilliance in this approach?  They have effectively lowered the bar so the MSM can proudly proclaim GDP growth beat this lowered estimate (if it happens).  Further, if GDP growth is not on pace to beat this lowered estimate, the Ministry of Truth can simply reformulate GDP until it does.  Lowering the bar now makes it that much easier for the Ministry of Truth to fudge the data to get GDP over the bar.  Voilà!  The MSM could then declare this to be more evidence that economic growth has reach escape velocity.  Stawks to da moon!

FUBAR.

Wed, 08/27/2014 - 15:41 | 5150765 JRobby
JRobby's picture

Surprise!

This truly is a moment in history.

Wed, 08/27/2014 - 15:54 | 5150851 SAT 800
SAT 800's picture

Wait'll they see the surprising economic weakness in the second half of the year----then they gone shit themselves. Reality is a bitch when you been dreamin.

Wed, 08/27/2014 - 11:51 | 5149362 dontgoforit
dontgoforit's picture

If they guess within 5% of reality they all get cigars.

Wed, 08/27/2014 - 11:56 | 5149389 Soul Glow
Soul Glow's picture

If they guess above 5% they get golden parachutes.

Wed, 08/27/2014 - 14:58 | 5150523 Phil Free
Phil Free's picture

Otherwise, it's time for golden showers..

Wed, 08/27/2014 - 12:11 | 5149445 johnjkiii
johnjkiii's picture

Hell, if they get the direction right, the get cigars.

Wed, 08/27/2014 - 11:56 | 5149381 Soul Glow
Soul Glow's picture

They are soo good at projections!  Green shoots abound!

Wed, 08/27/2014 - 11:56 | 5149383 SpanishGoop
SpanishGoop's picture

Was just going to ask how the weather was overthere but then i read the comments.

 

Wed, 08/27/2014 - 12:02 | 5149396 Hal n back
Hal n back's picture

I prefer to look at corporate revenues--which as luck would  have it, are barely positive inclusive of inflation whatever that rate is.

 

when this whole thing collapses most people will be shocked and surprised.

 

gold might not do well only because  who will be left that can afford to buy any.

 

Think about the HNW individuals in highly leveraged funds whether stocks or bonds or real estate. They will all have wished they had bought some of that crappy PM that has gone nowhere and does not pay interest.

Wed, 08/27/2014 - 12:03 | 5149409 Cattender
Cattender's picture

yes.. the Sheeple will say: WTF OBAAAAAAMAAAAA??? LOL!

Wed, 08/27/2014 - 12:01 | 5149405 papaswamp
papaswamp's picture

Thus due to weaker revenue...all that Ocare that was going to be covered, probably wont be, thus an increase in debt (already an increase $965B this FY). Must print moar.

Wed, 08/27/2014 - 13:56 | 5149407 UndergroundPost
UndergroundPost's picture

Ah yes, the snow. Which is why Arizona and Nevada - well known for the torturously cold, blizzardy and economy debilitating monster dumps that so often plague the states from November to April - had their 1.6% and 1.5% growth in Q1&Q2 2014. There's one thing we can count on - the CBO will ALWAYS live up to its name (Congressional Bullshit Office - or Oriface, to be technically accurate.)

Wed, 08/27/2014 - 12:04 | 5149419 nakki
nakki's picture

Time for this country to start counting hookers and blow. That should be worth $500 billion in Washington DC and New York City alone. If memory serves me correctly, we, according to the CBO year 2000, 10-15 year projections should currently have an account surplus. Missed it by $17 trillion. 

Wed, 08/27/2014 - 17:17 | 5151249 Endgamer
Endgamer's picture

“Saving” most or all of the budget surpluses that

CBO projects over the next 10 years—using them to

pay down debt—would have a positive impact on the

projections and substantially delay the emergence of a

serious fiscal imbalance. Yet under most of the assumptions

CBO used, a fiscal imbalance eventually

develops whether or not surpluses are realized. If the

nation’s leaders do not change current policies to eliminate

that imbalance, federal deficits are likely to reappear

and eventually drive federal debt to unsustainable

levels. In turn, those fiscal developments could significantly

slow the growth of the economy.

Wed, 08/27/2014 - 17:18 | 5151255 Endgamer
Endgamer's picture

Yes but what is "significant" really?

Wed, 08/27/2014 - 12:11 | 5149427 Hal n back
Hal n back's picture

saw a report the other day that there are 82 million on medicaid, 51 mil on food stamps. and still have 33 million to be insured probably under medicaid.

add in the 55 mil on soc sec/medicare-thats 115 mil on medicaid and 55 mil going to 60 on soc sec medicare--total 175 receiving benefits with basically no prefunding.

We only have 120 million working full time and not too many of those are on wall street (not enought there to tax at 100% and meet obligations-infact, we could double personal income tax revenues (on everybody paying income tax)  and just about break even for a few years. until interest rates go up at least. However, what do you do about the mid income people earning say 75k a year seeing their taxes double and then they have to cut spending--not to mention higher premiums coming for obamacare.

 

so it comes back to the question of when, not if,  do we have the "oops" moment when we cannot meet payroll. Just like what happens in real companies in financial trouble.

I'd also say some of th eimproved cash flow deficit is duw to the feds deferring paying invpices from vendors and the fed employees pension ala Illinos way of dealing with deficits.

 

numerous routes likely to trigger the oops moment.

 

Wed, 08/27/2014 - 12:07 | 5149429 Zigs
Zigs's picture

Well, it's nice to know this won't impact any budget planning since there is no budget planning.

Wed, 08/27/2014 - 12:14 | 5149440 hairInTheSoup
hairInTheSoup's picture

i'm not sure what keynes (state is providence for the people ie public services shall be public, financial markets shall be regulated etc) has to do with the QE joke (fed is providence for the banksters).

it's like blaming Marx, probably the best economist of history (read "the capital") for Staline murders.

but i could be wrong, those lessons i had on keynes starts to date, so please enlight me.

Wed, 08/27/2014 - 12:11 | 5149455 ejmoosa
ejmoosa's picture

Unfortunately there are only two possible results in their world:

 

1.  Missed estimates >>> pent up demand >>> economy back on track shortly  >>> all is good very soon

2.  Hit Estimates  >>> economy on track >>> all is good

Wed, 08/27/2014 - 12:13 | 5149462 djcando
djcando's picture

Monkeys at a typewriter!

Wed, 08/27/2014 - 12:16 | 5149473 kchrisc
kchrisc's picture

Winston Smith lives!

An American, not US subject.

Wed, 08/27/2014 - 12:16 | 5149475 SheepDog-One
SheepDog-One's picture

CBO....bunch of Capt. Hindsights.

Wed, 08/27/2014 - 12:16 | 5149476 tahoebumsmith
tahoebumsmith's picture

The only word that comes to mind is KEYNESIANS. Why do they continue down this path of failed Economics? By the time the dog leaves the White House, "BO" ,our National Debt will be over 20 Trillion and our GDP will be negative yet there will be some way to justify their total failure...

Wed, 08/27/2014 - 12:29 | 5149550 hairInTheSoup
hairInTheSoup's picture

where the fuck did you people read in keynes writing that QE is a keynes theory ?

Wed, 08/27/2014 - 12:44 | 5149620 tahoebumsmith
tahoebumsmith's picture

Imagine if the 100+ million Americans that rely on food stamps and other Government handouts actually had to get a job or start a business to survive? Imagine if these people actually produced something other then debt? It's called Capitalism and when people produce instead of take it adds money to an economy instead of sucking it dry.

Wed, 08/27/2014 - 12:57 | 5149682 hairInTheSoup
hairInTheSoup's picture

oh you're stuck in demorep paradigm not realising the only parasite in the picture are the feds & the senate & all their mates (& the weapon sellers).

 

ok then i feel for you

Wed, 08/27/2014 - 15:12 | 5150621 SeattleBruce
SeattleBruce's picture

"where the fuck did you people read in keynes writing that QE is a keynes theory ?"

Keynes advocated deficit spending by the government to 'spur' the economy, with corresponding surpluses when the economy was doing well.  (Guess what we never get to the surpluses.)  QE accommodates massive deficit spending..so QE is a massive, perhaps grossly distorted extrapolation of Keynesian theory.  So lamenting Keynesians these days, is to lament the grossly distorted Keynesian theory, imho, although clearly Keynesianism has not worked out well in practice, so some lament can properly be leveled at him for being a polyanna who trusted government could by and large do the right thing.

Wed, 08/27/2014 - 18:17 | 5151484 hairInTheSoup
hairInTheSoup's picture

nothing can work with that central banking system of ours & this fucking reserve rate paradigm; so it's all bs to create the illusion of a debate.

this being said :

ok with grossly distorted but :

my gross understanding is that keynes main aspect of his model is that financial markets should be regulated by the state all the time vs the friedman neo-lib model that intend to prove that financial markets should be totally free of rules & regulation all the time as well (all this based on the sweet utopia hypothesis that information on markets is transparent, i'll get back to that). 

the keynes model is about regulation all the time, not only during one crisis after decades of free unregulated markets, after decades of us government policies following entirely the neolib model... so imo, that's a sufficient reason to just stop with that keynes/neolib debate and see how bs & irrelevant it is.

the model the government follow is neither keynesian, neither neolib : it's all the profit for the 1% and all the losses for the rest.

finally, if the system was not corrupt, i want to add that financial markets would need to be regulated somehow by the state (a state that'd be above banks & for the people - another sweet utopia of mine) for one very simple & straightforward reason (and some years ago in the 90's if my memory is ok, some economist got the nobel price for proving what's follow) : the information on the markets cannot be transparent (which is the card on which all the neo-lib model/castle relies).

Wed, 08/27/2014 - 12:39 | 5149604 Actuary
Actuary's picture

Silly Tyler, same as the MSM, their only job is to get liberal politicians elected and unfortunately for America, they're pretty good at it.

Wed, 08/27/2014 - 12:45 | 5149626 nakki
nakki's picture

GDP is a bullshit statistic anyways. 18% of GDP comes from health care in this country, and will only increase in the coming decades. Unpossible and not a very sound way to spend ones money. Throw in the fact that, according to those who control the purse strings, feel that, the war on terror is only in the first quarter, (neocons love talking about a 50 year war) the GDP to debt ratio will never be better than it is currently. We still spend more than we take in, sooner or later, it fails. They can't print and hold (which they are obviously doing now) just look at M2 (bad for GDP) and they can't let it out (hyperinflation). 

Wed, 08/27/2014 - 12:48 | 5149635 shanearthur
shanearthur's picture

How about this? Like fuel and food toward inflation, the government can just not include the winter months in its GDP projections.

Wed, 08/27/2014 - 15:16 | 5150639 SeattleBruce
SeattleBruce's picture

They'll just call it Core GDP*

*does not include winter months with lots of snow across much of the US.

Wed, 08/27/2014 - 13:34 | 5149909 Dre4dwolf
Dre4dwolf's picture

With such large % swings between estimates , is any of this data even worth anything?

Wed, 08/27/2014 - 13:37 | 5149923 Westcoastliberal
Westcoastliberal's picture

I can explain; they backed out the QE.  There, fixed it for 'ya!

Wed, 08/27/2014 - 14:11 | 5150143 Robert of Ottawa
Robert of Ottawa's picture

The economists did not predict the snow effect and their predictions fell  short. It reminds me of their climate science brethren. They must both be using the same super-dupe-computers and programmers. GIGO.

Whoops I notice I missed the 'R' in "super-duper" but left it that way as it somehow seems more appropriate.

Wed, 08/27/2014 - 14:13 | 5150164 RazvanM
RazvanM's picture

I forecast a GDP reading of 1.85% next year. Anyone wanting to bet?

Wed, 08/27/2014 - 14:18 | 5150199 Joebloinvestor
Joebloinvestor's picture

As long as the SP makes new highs, it doesn't matter.

The stuff dreams are made of.

Wed, 08/27/2014 - 14:25 | 5150237 gaoptimize
gaoptimize's picture

The real "LOL!" is the estimated jump up from the first red bar to the second green bar. How shameful.  I call upon the individuals that do the real analysis that lead to the results that are shit canned, manipulated (assumptions), and altered to turn whistle blower.

Wed, 08/27/2014 - 14:32 | 5150303 yrbmegr
yrbmegr's picture

Well, if cutting your GDP forecast from an increase of 3.1% to an increase of just 1.5% represents incompetence, what do we think of web sites that have forecast 20 of the last 2 recessions and the end of 5 of the last 1 hegemonic empires?

Wed, 08/27/2014 - 14:59 | 5150536 starman
starman's picture

Im not surprised.

Wed, 08/27/2014 - 22:26 | 5152361 AdvancingTime
AdvancingTime's picture

This is more of a prediction than a forecast and predicting the future is an impossible task, a fools errand, full of pitfalls. Still we listen and soak in all that is said, we even spend a tremendous amount of money to gain an edge in knowing what maybe just around the corner. If you step back ten years in your mind, I suspect that things have not unfolded as you might have predicted.

When you see how the world has developed, the twist and turns are most unpredictable. Nowhere is this more apparent then in the economy, whether it is in the areas of interest rates and inflation or the rise and fall of companies. Surprise and awe, highlighted with bouts of shock is what we should expect going forward. More on this subject in the article below.

http://brucewilds.blogspot.com/2013/06/predicting-future-and-hindsight-m...

Thu, 08/28/2014 - 01:07 | 5152654 TheReplacement
TheReplacement's picture

Snow in winter.

In other news,

Bear poops in woods.

Do NOT follow this link or you will be banned from the site!