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How To Shut Someone Up The Next Time They Blame The Winter For The Economic Collapse

Tyler Durden's picture




 

In a note today, Bank of America economists (after looking at weather data) admit their finding "puts us in an awkward spot today." What did it find? Namely that all those who reran that 2014 playbook, Ethan Harris and other Bank of America economists included, and decided to blame the weather for Q1 GDP crashing from over 3% to under 1%, are wrong or simply lying.

Here is BofA:

Is weather the main reason for recent weak economic data? While we would love to blame the weather for all of our bad forecasts, in reality it is hard to pin down  weather effects. A recent paper from the Chicago Fed—“The effect of winter weather on U.S. economic activity”—is the best attempt we have seen in recent years. They look at detailed data on snowfall and temperature by state and for the nation as a whole. The results show that weather effects can have a significant impact on local employment and housing activity, however, when you add it up for the nation it becomes very hard to quantify. Looking back at the very severe winter of 2013-14 they find that bad weather can only explain part of the weakness at the start of the year.

 

This puts us in an awkward spot today. There is a bit of an urban legend that weather can explain all of the weakness in the first quarter of last year and hence could explain all the weakness today. However, hindsight is always 20-20. In real time, the slowdown last year was a major surprise to economists even though we get data on the weather before we get data on the economy. Moreover, this winter is not nearly as bad as last winter—last year we had three bad months, this year only February was unusually bad (Chart 1). Economic fundamentals point to stronger growth ahead, and that remains our forecast. However, we can’t completely explain the recent weakness and hence there is a risk that growth does not pick up.

So the next time anyone, not just the Fed's Lacker or DB's house comedian Joe LaVorgna, but any other economissed spouts the first thing that comes into their mind to "explain" the economy's unwillingness to grow as per some goalseeked spreadsheet, just show them this chart which shows that three of the four months this winter were warmer than normal, and just put them on mute.

 

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Fri, 04/10/2015 - 10:29 | 5978486 ejmoosa
ejmoosa's picture

Blaming the weather for a seasonally adjusted number that is weak?  Of course that's a dumb idea.

That is what seasonally adjusted means, right?

Fri, 04/10/2015 - 10:30 | 5978498 zuuma
zuuma's picture

because...

Global Warming.

/s

Fri, 04/10/2015 - 10:40 | 5978528 Cognitive Dissonance
Cognitive Dissonance's picture

A scapegoat doesn't have to be human.........or even a goat.

It just has to be plausible, however slight that might be.

Fri, 04/10/2015 - 10:41 | 5978542 813kml
813kml's picture

In that case, it was God's will.

Fri, 04/10/2015 - 10:43 | 5978555 whotookmyalias
whotookmyalias's picture

Oliver North's attorney was thought to be a potted plant at one point by a Senate committee.

Fri, 04/10/2015 - 11:10 | 5978697 Stackers
Stackers's picture

Have to disagree with this one. I experienced it myself. It was not so much the temps as it was the never ending snow and rain.

The northeast was socked by a ton of snow. They almost did not have Boston St. Patty parade due to snow blocking the route

Mid-atlantic got snow they hardly ever see

Texas was wacked by tons of rain and ice storms. Dallas got hit hard a couple of times

 

 

Fri, 04/10/2015 - 11:13 | 5978705 Thirst Mutilator
Thirst Mutilator's picture

You're doing it WRONG...

 

Here's how to do it... diva style is a bonus...

 

https://www.youtube.com/watch?v=0x-fkSYDtUY

Fri, 04/10/2015 - 11:12 | 5978710 NoDebt
NoDebt's picture

Everyone is putting money aside in the first quarter to pay their Obamacare premium/tax in April.

Fri, 04/10/2015 - 13:22 | 5979388 A Nanny Moose
A Nanny Moose's picture

Like Manifest Density, or the Monarchy?

Fri, 04/10/2015 - 10:49 | 5978548 whotookmyalias
whotookmyalias's picture

/s

Fri, 04/10/2015 - 11:08 | 5978679 Element
Element's picture

 

 

Cog, an old goat for you to listen to when you get some time (or a couple of times even):

Conversations with UG, U.G Krishnamurti and John Wren Lewis
https://www.youtube.com/watch?v=fSzzRjJa5o4&feature=youtube_gdata_player

Fri, 04/10/2015 - 10:38 | 5978526 Money Boo Boo
Money Boo Boo's picture

we snowed some folks....

Fri, 04/10/2015 - 10:33 | 5978506 Creepy A. Cracker
Creepy A. Cracker's picture

I was too cold in January and February to order from Amazon.

Fri, 04/10/2015 - 10:40 | 5978536 813kml
813kml's picture

Their drones couldn't handle a few snowflakes.

Fri, 04/10/2015 - 10:32 | 5978507 BandGap
BandGap's picture

COME ON!

Show Joe L's fucking picture so we can revel in all the unused advertising space he might refer to a his forehead.

 

Fri, 04/10/2015 - 10:49 | 5978585 saveUSsavers
saveUSsavers's picture

Joe LaFornicateya and Joe Claptrap Kernen- who's worse?

Fri, 04/10/2015 - 10:36 | 5978514 Oldwood
Oldwood's picture

 If weather was responsible, future data will show an upturn. If we see no upturn or even a worsening of data, we know weather was not relevant.

The problem is not with the predictions or even those gambling on them or selling their book on them, but the fact that the facts, the data that is really measurable in prior periods, is ignored if it doesn't support the theme.

Its global warming, it the economy, it every factor of our lives. They must manipulate us and to do so they must control the message.

None of us knows the future, but we do know the past, which makes it easy to tell the liars from those truth tellers...just look at recent history and use that as our guide.

Fri, 04/10/2015 - 11:05 | 5978667 Grumbleduke
Grumbleduke's picture

here's the ABC in 1977, talking about climate change (not, what you might expect).

 

http://adam.curry.com/enc/20150405195600_abcclimatevideofromjan111977.mp3

 

found at: noagendashow.com

Fri, 04/10/2015 - 13:25 | 5979414 A Nanny Moose
A Nanny Moose's picture

Yikes. I better go produce some GHG

Fri, 04/10/2015 - 10:38 | 5978515 ANestIOS
ANestIOS's picture

when the weather is bad I simply refuse to order anything on Amazon - especially before xmas -

Fri, 04/10/2015 - 10:39 | 5978530 Keltner Channel Surf
Keltner Channel Surf's picture

I usually just poke them in the eye with a leftover X-mas candy cane, but this seems like a more civil, intellectual approach.

Fri, 04/10/2015 - 10:41 | 5978538 Dr. Engali
Dr. Engali's picture

I've never seen a storm where people deidn't strip the shelves of the local grocery store bare. And we have this new invention thanks to Al Gore called the internet to keep commerce flowing. Oh yeah, Al Gore brought us global warming too. Thank you Al Gore, we love you.

 

 

I think I just threw up in my mouth a little bit.

Fri, 04/10/2015 - 10:43 | 5978547 Comte d'herblay
Comte d'herblay's picture

Lemons to lemon-ade department:

 

Find a baby bird and feed it.

Fri, 04/10/2015 - 11:25 | 5978787 Oldwood
Oldwood's picture

Given America's addiction to spending, I can only assume there was a substantial increase in suicides caused by the depression so many suffered during their forcible withdrawal from spending...not to mention all those who simply starved.

Fri, 04/10/2015 - 10:44 | 5978558 Bell's 2 hearted
Bell's 2 hearted's picture

"this winter is not nearly as bad as last winter—last year we had three bad months",

 

yesterday most (of the few who still do) of the chain stores that still report monthly sales reported. I looked at about a half dozen.

 

Weak

 

Despite very nice weather back half of month and early Easter (last year Easter april 20th) which should have meant good sales for march

 

 

Fri, 04/10/2015 - 10:46 | 5978574 Salah
Salah's picture

But the weather was a factor and a big one; and judging from Joe Bastardi's (weatherbell.com) longterm forcast, it will also be so '15-'16.  

SS cycles 22-24 show clear evidence of an impending solar minimum; the last one ended about 1815.  That's 10 yrs before the Erie Canal opened.  We can only hope it is a mere "minimum" (40-70 yrs); otherwise something much worse.  http://en.wikipedia.org/wiki/Solar_cycle#/media/File:Solar_Cycle_Predict...

Fri, 04/10/2015 - 10:47 | 5978576 saveUSsavers
saveUSsavers's picture

eCONomists

Fri, 04/10/2015 - 10:49 | 5978586 TeethVillage88s
TeethVillage88s's picture

Just point to their responsibility in fixing the problem, that the problem is very old like a decade old, or that they should be questioning, investigating, looking at different points of view... like a journalist training to be reviewing the whole matter.

Fri, 04/10/2015 - 10:50 | 5978592 khakuda
khakuda's picture

As Hillary would say, "At this point, does it really matter?"

Weather or not, bad economy news is GREAT news for central bankers who will keep pumping up the tasty global asset bubble so they can get praise from Senators for "getting to work" and so they can get $300,000 speaking engagements and write books.  Doesn't do anything positive for the real economy outside of increasing wealth inequity and  ultimatlely ending up in a collapse but they could care less about that.  It will be someone else's problem.

This country is going to die with this horrible hybrid of centrally planned free market.  Either get back to free markets or become China, but the middle ground is a disaster.

Fri, 04/10/2015 - 10:52 | 5978608 autofixer
autofixer's picture

Has anyone told the parroting propagandists at CNBC how stupid they are?

Fri, 04/10/2015 - 12:06 | 5979008 northern vigor
northern vigor's picture

The Neilsen Ratings did.

 

Fri, 04/10/2015 - 10:53 | 5978612 semperfi
semperfi's picture

Lying is the norm.  Honesty today is perceived as weakness, naivetivity, even stupidity.  I hate liars, wish they would all burn to a crisp.

Fri, 04/10/2015 - 12:40 | 5979188 Cortez
Cortez's picture

Corporations won't hire honest people.  They want people that can follow orders above all else. 

Fri, 04/10/2015 - 10:55 | 5978618 aliki
aliki's picture

i can't wait til we get a negative GDP print right after the summer. that will be fucking priceless. can't fucking wait for the first time in federal reserve history we see the term "el nino" in the fed statement.

janet yellen's press conference: "we are closely monitoring the situations and are in close contact with our partners to the south, the federalis, as to what can be done about the warm weather in the context of managing full employment and corporate demand."

Fri, 04/10/2015 - 10:56 | 5978628 Smegley Wanxalot
Smegley Wanxalot's picture

I for one was going to buy a Bugatti in February, but would only do so if the temperature was above 72° F and there were no snowflakes in the other 49 states, but since that did not happen, fuck the Bugatti and I'll just stick with my 13 year old pick up.

Fri, 04/10/2015 - 11:03 | 5978653 Herdee
Herdee's picture

They must be subscribing to the weather services that the grain traders use.

http://www.cmegroup.com/trading/weather/

http://www.mdaus.com/Weather-Services/Energy.aspx

Blame it on the weather.Nice day today,isn't it?

Fri, 04/10/2015 - 11:07 | 5978681 all-priced-in
all-priced-in's picture

How To Shut Someone Up The Next Time They Blame The Winter For The Economic Collapse?

 

 

I prefer the swift kick to the groin method VS pulling out some lame graph.

 

 

 

Fri, 04/10/2015 - 11:14 | 5978727 semperfi
semperfi's picture

I'd rather give them a knuckle sandwich

Fri, 04/10/2015 - 11:13 | 5978717 Hannibal
Hannibal's picture

The American way: you shoot them.

Comply or Die.!

http://rt.com/usa/248469-florida-shooting-mentally-ill/

Fri, 04/10/2015 - 11:23 | 5978741 10mm
10mm's picture

I for one will never ever encounter someone even bringing up the economy.  Now the Bullshit weather, all fuckin day.

Fri, 04/10/2015 - 11:28 | 5978802 Ban KKiller
Ban KKiller's picture

We beat BofA in one of our foreclosure cases. Judge said no to their motion for summary judgment AND said they don't even have a prima facie case! 

Bank of America is not to be trusted on any level. NONE. If they say anything it is a lie. Yeah, I know, hard to believe. 

Fri, 04/10/2015 - 11:30 | 5978818 Paul451
Paul451's picture

"..can't completely explain the recent weakness..."

 

Bawahahaha. A notoriuosly IDIOTIC statement, even for a banker.

 

Go to Texas and North Dakota and they'll explain it to you. Dumbass.

Fri, 04/10/2015 - 12:26 | 5979112 Urban Redneck
Urban Redneck's picture

For shits and giggles I'll a different perspective on blaming the weather (and climate change) for economic collapse...

If instead of worldwide sea levels rising several inches over the next century due to global warming, the frost lines fall several inches over the next century due to global cooling...

Much of the plumbing that facilitates high population densities will literally collapse (after bursting).  In addition, the foundations undermining human civilization will literally be undermined.  That economic collapse would occur much faster than the glacial pace at which the ice packs expand towards currently warmer terrain.  It's not quite on par with an alien invasion on the Krugman Orgasm Scale, but I'm sure Goldman Sachs will have no problem milking it for billions when their current scams run dry. 

Fri, 04/10/2015 - 12:32 | 5979151 Cortez
Cortez's picture

How come when there is a report with positive results we never hear about how "the good weather really boosted the economy"?

Fri, 04/10/2015 - 16:00 | 5980078 bagehot99
bagehot99's picture

Because when good things happen, Barack Obama did it. You're not keeping up with The Narrative™.

Fri, 04/10/2015 - 15:55 | 5980056 Panic Mode
Panic Mode's picture

You never can shut the government up. Don't be daft. Government always claims their figures are correct untampered, your interpretation and the sources are insufficient.

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