And Wall Street Does Its Traditional "Nobody-Could-Have-Foreseen-This....Nobody" Dance

Tyler Durden's picture

Here are some of the first sell-side and media perspectives on the abysmal Q2 GDP. And of course, nobody could have foreseen this huge collapse in the US economy. Nobody.

 Standard Chartered

  • "There is absolutely no good news in this report and one would really hope that it will focus the minds of those in Washington on resolving the debt ceiling issue as soon as possible."

Faros Trading

  • "Today's disappointing U.S. GDP data confirms what we have suspected for some time: the end of QE2 will be do to the U.S. economy what a lawnmower does to green shoots. With QE2 now ended and government spending in check given the ongoing debt negotiations, we reiterate our view that the U.S.'s light at the end of the tunnel lies in having a weaker dollar, at least until exports can recover and the U.S. fiscal position can be put back on track."

FTN Financial

  • "What is worrisome is that each month in the quarter was weaker than the month before. We are looking at another slow quarter in the third quarter but still positive so no recession....At this point growth is so close to zero and confidence is more important than it normally is and the distraction of the debt ceiling fight could make a big difference. A government shutdown would have a big impact as well."

Tradition Energy

  • "I think that with GDP, we were we were looking for a little higher rates. I think it's a little disappointing, so the (oil) market is coming under pressure. I think some of the pressure in the market was already in there because of worries about the debt ceiling and some worries about a possible downgrade of Spanish debt.
  • "The (oil) market has been trying to expand to the bottom area of the trading band for the last few days. Whether or not we're going to see any kind of a freefall I think remains to be seen but it looks like the market is under pressure.
  • "The key point is going to be $95 a barrel, if we get down around those areas because that's where we've basically held for the last couple of weeks.
  • "The smaller growth is not a positive sign and the oil markets are reflecting that with the 50 cent sell off we just saw."

BNP Paribas

  • "Markets have been under pressure last few days as the U.S. debt talks stall, technically weak. More bad news for the markets, the GDP number missed estimates. Petroleum and equities extended their losses.
    "Oil markets are watching Tropical Storm Don but it is not expected to be a major weather event, missing most petroleum infrastructure."

Raymond James:

  • "The face value is certainly not great. The second quarter disappointed, but the first-quarter downward revision is more disturbing. It advances the pangs of concern. The debt ceiling nonsense is not going to help us. We're already in an economy that is subpar."

     

    "Glancing through it doesn't look like anything is really out of line with what people were expecting for the second quarter... Gasoline price increasing from $3 to $4, that really slapped the consumer back considerably."

Solaris Asset Management

  • "Everybody expected GDP to be weak for the second quarter, estimates had steadily come down, but this is a pretty shockingly low number. The revision to the first quarter is even more shocking."
  • "Clearly this is evidence of a mid-cycle slowdown. The only question now is do we see a pick up in the second half and so far the economic data to date doesn't suggest that."
  • "You might have some analysts come out and talk recession, talk about a double dip. Right now none of the forecasts even come close to that but this is weak data"

ITG

  • "The economy is weak, and it's going to stay weak, and it's going to stay weak for a while because we are in the process of deleveraging and this is what deleveraging looks like. To get the economy moving forward the way it should requires a reform of the tax code that will lower rates and broaden the base and favor investment over consumption. Efforts to try and put Humpty Dumpty back together again to have the economy we had before is not going to work.

     

    "I'm not going to say there can't be any growth in the second half of the year. Remember the fiscal stimulus has petered out. You don't have the Fed's QE2 pushing liquidity into the system and you have slower growth globally. It's hard to add these things up and say that the U.S. economy is going to accelerate in the second half of the year."

Commonwealth Foreign Exchange

 

  • "Very weak number in GDP. The headline was well below forecast and surprisingly we saw very large downward revision to Q1's data. So it looks like a lot of this was driven by a sharp falloff in consumer spending in the second quarter, which only rose by 0.1 percent. Overall, a very weak number. The dollar is kind of choppy at this moment. It appears to be holding steady against the euro and coming off against the yen. We've seen yields in the U.S. fall pretty dramatically. We're seeing a little bit of flight to safety and that might ironically provide a little bit support for the dollar."

IFR Economics

  • "The advance estimate of Q2 GDP of 1.3% annualized falls short of a 1.8% market consensus, and with Q1 revised down sharply to a meager 0.4% increase from 1.9%, and more negative revisions further back, the picture is of a recovery that has lost momentum after a promising spell in late 2009 and early 2010. Yr/yr GDP has slowed to 1.6% in Q2 from 3.5% in Q3 2010. The main reason for the Q2 disappointment was that consumer spending (which is 70% of GDP) managed only a 0.1% increase, some of the weakness there temporary due to supply shortages in autos but even excluding autos underlying demand looks weak. Within the consumer spending breakdown durable goods fell by 4.4% but the rise in non-durables was only 0.1% and services rose by only 0.8%, the latter broadly consistent with real disposable income, which rose by 0.7% for a second straight quarter, restrained by rising energy prices. The savings rate edged up to 5.1% from 4.9%, but with Q1 revised down from 5.1%, was unchanged net of revisions."

Miller Tabak:

  • Will need to reexamine our growth estimates for the second half” after 1Q and 2Q GDP data, writes fixed-income strategist Adrian Miller at Miller Tabak Roberts in client note.
  • “Growth remains a significant concern,” Miller writes
  • Economy “continued to experience significant drag from the decline in government spending as Q2 recorded an additional decline of 1.1% in public spending led by a -3.4% decline from state and local governments,” Miller writes
  • Still, he notes “We saw some positive signs of growth toward Q2, such as business spending and net exports”

Bloomberg's TJ Marta:

  • GDP data shows U.S. consumers are on their backs with 0.1% personal consumption growth weakest since recession
  • 1.3% 2Q growth driven by rising inventories, trade; without those, growth only 0.5%
  • Rising inventories not a good sign; suggests consumers not buying as much as retailers
  • Can’t rely on trade going forward given global central bank tightening and moderating global growth as well as austerity measures in much of Europe and the U.S.
  • Suggests yields may fall further going forward; a “bull flattening,” with longer yields falling faster than shorter maturities, similar to Japan during its “lost decade”

Jefferies:

  • “Q2 GDP came in well below expectations, and Q1 was revised from +1.9% to 0.4%.
  • Q2 GDP is much weaker than expected, and history looks bleaker out the back window,” writes Ward McCarthy of Jefferies & Co. in client note.
  • He plans to revise his GDP forecast lower because “the trajectory of growth going forward looks bleaker”
  • “The bottom line is that the economy now and previously was weaker than data had suggested was the case,” McCarthy writes
  • The U.S. continues to dig out of a deep hole, but we are making significantly less progress than it previously appeared to be the case,” he writes

From Goldman Sachs:

.... (for now)

 

As for the humor from Joe LaSagna... we can't wait.

 

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caerus's picture

chicago pmi...wait for it...

slaughterer's picture

Hatzius now capitulates from his "recovery" call.  He just needs to fight back his tears in the GS men's room before he issues his response. 

digitlman's picture

People pay those idiots for their "forcasting"?

 

Wow.

 

kito's picture

economists and weathermen...cant see the storm coming and yet people still cling to their forecasts

A Lunatic's picture

I just love the smell of hopeless change in the morning.

Spirit Of Truth's picture

"economists and weathermen..."

Let's not insult weathermen!


Sabibaby's picture

Can you get a degree in Astrology from an ivy league college too?

 

EscapeKey's picture

Of course they do.

"Could you produce an estimate of GDP growth, which shows a 2.0%+ rate is entirely realistic, so we can sell more fixed income assets into the market"?

snowball777's picture

A youtube video of a youtube video of Fox News.

Grow a BRAIN.

flacon's picture

Here's how it works: Create an "emergency", then pass laws to deal with that created emergency. The laws are never redacted and so when the shit hits the fan they will have all the laws that they ever wanted right at their fingertips. Why else are they waiting for the last minute to decide the debt ceiling raise?

 


House Rules Committee votes to give Boehner "maximum flexibility" to alter debt limit bill By: Philip Klein | Senior Editorial Writer Follow Him @Philipaklein | 07/28/11 9:07 PM

Short of votes to past the current version of House Speaker John Boehner's bill to raise the debt limit, Republicans on the Rules Committee voted to give their leader "maximum flexibility" to bring any negotiated changes to the House floor immediately.
"We were expecting a vote this evening, but obviously the votes weren't there," Rules Committee Chairman David Dreier, R-Calif., said as midnight approched. In order to make sure Congress is able to meet the Aug. 2 deadline to raise the debt ceiling, Dreier said the committee needed to give Boehner so-called "same day authority" that allows him to alter the bill as needed to win over the remaining votes, without having to go through the Rules Committee process each time.
Democrats on the committee seized on reports that the reason Republican leadership didn't have enough votes was that conservative members were opposed to the new money for Pell grants. They accused Republicans of blaming students for the nation's debt woes.
"As of right now, it's apparent we don't have the votes for a number of reasons," Dreier said, declining to address the Pell grants issue. He said there were "different issues for different members."
Rep. Jim McGovern blasted the Republicans' procedural move, calling it a "martial law rule." He said Dreier himself used to refer to it that way.
"That's when I was in the minority," Dreier responded candidly, to laughter.
The rule was agreed to 8 to 4.
The House is scheduled to open at 9 a.m. tomorrow, with no votes expected earlier than 11 a.m.

Read more at the San Francisco Examiner: http://www.sfexaminer.com/blogs/beltway-confidential/2011/07/house-rules-committee-votes-give-boehner-maximum-flexibility-alte#ixzz1TVHSDm3M

 

Gohn Galt's picture

Some high grade fear mongering with a touch of subliminal suggestion.

Wow, officers will now have full authority to issue warrants and or act without one.  Paperwork is such a burden and we all know how much this inconveniences our Judges.

And there's more, now Yogi will have all of those rights too. 

http://www.opencongress.org/bill/112-h324/text

Thorlyx's picture

hoocoodanode ??????????

Bob's picture

BWAHHAHAHAH!

Esso's picture

Criminy. I saw it, and I'm just a mechanic, more or less.

SheepDog-One's picture

Yea I saw it coming too ever since the first panicked cries of 'Hand over the blank checks or else!' screams from Paulson, and I along with anyone else who could plainly see it coming was called insane, racist, terrorist, know-nothing, etc.

Fish Gone Bad's picture

SAW IT???  Everybody saw it.  That is what makes this low flying mess all the more special.  Everybody saw it coming a long way off. 

Bwahaha WAGFDSMB's picture

What are you saying? This was already priced in? BTFD?

A Lunatic's picture

Time to shut up and eat your fucking peas!

>sarc<

Peter K's picture

OBAMANOMICS has it's good side. We are all getting poorer together. And in absolute terms, the rich are getting poorer faster.

 

Caviar Emptor's picture

Not my fat frineds, bro. They never had it so good. 

Dr. Engali's picture

I've got news for you. The rich never had it better.

SheepDog-One's picture

So everyone says 'This shows we're collapsed, although no one could have seen it coming, NO ONE....so now get busy DC and print some more trillions out of thin air'.

ArkansasAngie's picture

Now is the time to break the bank(s) ... literally.  The charade of we're doing this for your benefit is horse manure.

The reset button won't do the trick.  We need to wipe the harddrive and reinstall the operating system.  Sorry you are going to loose your pictures if you didn't back'em up.

SheepDog-One's picture

Screw a re-boot, we need to smash the control machine completely, and rebuild from scratch.

Cash_is_Trash's picture

Well I happen to be a gallows-maker.

I also charge half a gold ounce to execute each Wall St. banker.

I knew my talent would be needed someday.

Crisismode's picture

.

 

I'll do it for one-tenth a gold ounce for each Wall St. banker.

And I offer quantity discounts.

Midwest Prepper's picture

I'll do it for a cold coke.  Heck, the coke doesn't even have to be cold and if you don't have one to give me, no problem...

eurusdog's picture

I don't know jack shit about how GDP is calculated, but even I can tell you that the mess the last two administrations created were leading up to this. Next quarter we go Negative growth.

I went shopping this mornign for milk and it was down 16 cents a gallon.

SheepDog-One's picture

Im sorry to see people still believing administrations do this. It was started at the turn of the last century, anyone with basic history grasp knows that.

jerry_theking_lawler's picture

Yeah! Deflation.....time for some more bennie bucks into the system. Up $1/gallon...then down $0.16/gallon. we are in a deflationary period, must....print......more!!!

secure your physical gold/silver bitchez!!!

drivenZ's picture

the trend is your friend...haha. 

 

seems like these guys just look at a chart and follow the line out. why go out on a limb and do some real thinking when it's much easier to plot a few points on a graph with a steady growth rate.  

 

Caviar Emptor's picture

Picture this: A government shutdown when GDP is already near zero and each month in Q2 was worse than the previous month. 

Help!

snowball777's picture

TeaPotDomeExpress III: "Mission Accomplished". Heckuva job, Armey.

rsnoble's picture

So in other words you can get better economic views on ZH than all the highly paid economists?  Unbelievable. 

Being someone that used to do a lot of the ebay/auction/craigslist thing I already knew consumer spending is non-existent.  Shit is just not selling like it was.  As I have over 1000 eGay transactions and countless CL dealings I always have a hand on what's going on in the real world: Nothing.

LawsofPhysics's picture

Yes, none of them saw this coming, that is why they are all positioned so well.  Crash the system already, the sooner we do, the sooner compensation will return to folks that are actually worth a shit.  You know, those people that actually provide goods and services of REAL VALUE.  In case you don't understand, I am not talking about paper-pushing financial fucknuts.  Divest of all paper ASAP!

Iriestx's picture

I still say we melt-up green by EoD.

slaughterer's picture

Yup, melt up from 200 DMA today.  Got my SPY weekly calls on the dip below 1284 just now.   Robot-trader eat your heart out. 

Caviar Emptor's picture

Mystery? Hardly....As we've been telling you here in ZH for over 2 years: we're in a DEpression. Never left it. Only thing growing is monetary policy and that's enough to fudge the data with. In real terms nada

rsnoble's picture

IMO looks like the mainstreet and wallstreets orbit trajectory are on a collision course once again.  We'll have to send nukes at the big stinky rock and avert it once again and figure out a solution before it comes right back around.

ljag's picture

Simple. Quit paying TAXES! If you don't have the balls to do this, how are you gonna be one of those 'when they pry my dead-cold fingers off the trigger types that we rant about? Re-boot? Crash the hard drive/OS? Just quit paying them taxes. Fed time in a camp is about as soft a life as you can imagine. So, what's the problem? Starve the beast and problem solved. EOS

johnnynaps's picture

Yeah, but why do i get called a POS for taking it one step further via unenjoyment? I mean, you can starve the beast while i give it gut shots!

Josh Randall's picture

Time for the Bernank to do the NO PANTS DANCE

partimer1's picture

http://www.forcastglobaleconomy.com/Comment081/Comment081.htm

 

I posted this one a few days ago, and this guy is the best forecaster out there.  He was invited to CNBC once before 2007 peak, and I guess he never got invited back. 

r101958's picture

Watch, Chic PMI and UMich Cons Conf will beat 'expectations'.

SheepDog-One's picture

Good well then no QE, as long as broke people are being shown to pay more, and some colleges phone poll found confidence among the unemployed broke people is a tick higher.

Iriestx's picture

Exactly.  They'll fudge some numbers, algo-bots will buy the dip because the newswire is peppered with the word 'comprimise' and we'll melt up green on no volume.

SheepDog-One's picture

Good, again no call for QE if we can have a 1% GDP and markets go up. Obviously all is well and they dont need any more money paid from my great great great grandchildren!

PaperBear's picture

Of course all ZH readers know that a lot of people saw this coming.

A few people have gone so far as to have written books about this toxic debt-based monetary system and these unsustainable booms leading to busts.