Any time Wall Street tells you something, ignore it. Case in point: the historical "consensus" forecast of Q2 GDP. We have presented this chart before, most recently as pertains to Q1 GDP, although when it comes to unmasking Wall Street's broad incompetence, repeated showings never hurt. And the chart speaks volumes not only to just how much more "insight" those experts have into the future of the economy (none, but that doesn't prevent them getting multi-million bonuses at the end of every year), but also that any hopes of a Q3 and Q4 economic rebound will be imminently dashed. Below is the dramatic(ally wrong) history of Q2 GDP consensus forecasts, one day ahead of the first estimate of the official data release which will now most likely come well below a contractionary level in real terms.
Or seen on a continuous basis:
For comparative purposes, below is what this chart looked like back in April, together with our commentary from back then:
In the meantime, here is what Q2 GDP predictions look like. In good old "he who defects first" fashion, we predict that it will be Goldman once again to be the first desk to downgrade both Q2, H2, and FYE GDP, to be promptly followed by David Kostin cutting his S&P 2011 forecast from 1,500 to 1,300. After all the time to set the stage for QE3 is fast approaching and who better to load up on commodities in advance than the world' second largest hedge fund (the largest of course being the Federal Reserve).
And you thought only dot com projections had hockey sticks in them...
We doubt we have to explain what we think will happen to the chart of Q3 consensus forecast, but for those who have not been reading Zero Hedge over the past year, we are fairly confident in a sub-2%Q3 GDP print when all is said and done.
Unless, of course, we get one thing in the meantime: another round of quantitative easing, which is the sole culprit for the recurring GDP distortion.
h/t John Lohman