Q 1 final GDP craters at -2.9%.
Pretty simple, imho.
If GDP= C + I + G + (X − M)
Then as you approach a balanced budget, GDP goes negative because government spending is the only thing that offsets the lack of private demand and investment.
Demand is punky because the bottom 80% are losing ground and have no wage pricing power, if they have jobs.
Investment is lousy because corporations know their end demand is crummy and so they use their money to buy back their stock and pay themselves bonuses.
I'll let the cracker barrel economists chew on that.
Maybe the stock market goes up on this because it means mo-ah QE.
Also I'll join in with the conspracists, a little, and say they probably threw everything negative but the kitchen sink into Q1 (and all that bad weather!!!) so as to print a positive number Q 2 and thus avoid an "official" recession.
The dealis, though, that growth is cruddy here and its cruddy everywhere, even China.
And assets are not priced accordingly, and a lot of risk measures such as VIX and Put/Call show historic complacency.
That was quick. It was a "one off" event.
Growth is excellent!
BTW, I'm sure that the Socialist Kenyan Muslim in the WH will be glad to stick with that line as well, as long as it holds.
But this is mostly about rich white folks whistling past the graveyard, hoping to snag a few more bucks before the ghosts come out.
Yup. The GDP should be renamed as the Government Domestic Product, because deficit spending is doing yeoman`s work in keeping the trains on schedule. With the talk of "inflation" perhaps Wall Street is starting to trickle on us a little bit. It would make sense that if QE went into equities, at some point profits would be taken and a little spent, with the realization that "you can`t take it with you".
what'd I tell ya
"In brief: Goldman just boosted their Q2 tracking GDP from 3.8% to 4.0% because Q1 GDP imploded."
I'll knda go with that but remember you heard it here first- +2.9% of 0 growth for the first half. Which won't matter when it comes out because expectations will have been pre-dampened and there will be a new story being pumped.
-.5, 0, +.5, +1, I don't care. Still below stall speed.
Re: what'd I tell ya
If you sucdeed in starving the beast I'd suggest also learning how to go short grains as far as as you can.
Which has risks, as well.
But that didn't stop the patriots on Concord green, or The Greatest Generation when the Germans bombed Pearl Harbor...........
Also with one less wisdom tooth might loose something in my future postings?