Two years ago, there was nobody more bullish, or more apologetic of the poorly performing US economy than Deutsche Bank's chief US economist, Joe Lavorgna. Case in point: his Q1 2014 "explanations" why every negative print or consensus miss was due to the weather.
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How things have changed: ever since the beginning of 2016 and especially in the last few weeks, while Hugh Hendry has been chugging horse doses of blue pills, Joe LaVorgna has finally discovered the red pill, and perhaps because he has been focusing a little to much on the performance of the stock price of his employer, or for whatever other reason, gradually Wall Street's biggest bull has mutated into its most outspoken bear.
In fact, a quick skim of his recent tweets reveals a mind that is clearly perturbed by the dramatic and sudden underperformance of the US economy.
Growth in employee tax withholding receipts continues to slow through early April, up just around 3% over past year— Joseph A. LaVorgna (@Lavorgnanomics) April 11, 2016
Mar #NFIB small business sentiment edges down to 92.6 from 92.9, the lowest reading since Feb 2014 (91.6)— Joseph A. LaVorgna (@Lavorgnanomics) April 12, 2016
Since the recession, non-demographic factors have depressed the labor force by about 2.5 million workers— Joseph A. LaVorgna (@Lavorgnanomics) April 7, 2016
Although overlooked by markets, annual revisions to wholesale inventories may be another negative for Q1 #GDP— Joseph A. LaVorgna (@Lavorgnanomics) March 31, 2016
The economic data are expected to be mixed, consistent with #economy that is only muddling along— Joseph A. LaVorgna (@Lavorgnanomics) April 2, 2016
Capex spending remains soft: revisions to nondefense capital goods orders ex-air showed a larger decline in Feb (-2.5% vs -1.8% initially)— Joseph A. LaVorgna (@Lavorgnanomics) April 4, 2016
Ratio of business inventories to sales looks way out of kilter. Inventories need to fall or sales need to improve https://t.co/tiMZVMJXO2— Joseph A. LaVorgna (@Lavorgnanomics) March 15, 2016
Feb #durablegoods orders were terrible: headline (-2.8% vs +4.2%) ex trans (-1.0% vs +1.2%) & core (-1.8% vs +3.1%) all worse than expected— Joseph A. LaVorgna (@Lavorgnanomics) March 24, 2016
And then the following tweetstorm from this morning
To be sure, a stunning transformation and yet, just like with Hugh Hendry's inverse metamorphosis, we hope he is ok.
And while we wonder how long until this "new" Joe is proven right about the state of the economy, we also wonder how much longer will Deutsche Bank play "good economist cop, bad economist cop" by alternating between Joe's increasingly pronounced bearishness, and Torsten Slok's relentless optimism. Finally, since the Fed will continue to intervene at critical inflection points as the economy spins out into recession, perhaps the only solution is a cage match between the two economists. Deutsche Bank can keep the pay per view proceeds - judging by its stock price, it needs them.