11:34 am ET
Jun 25, 2014


Why the GDP Report Stinks, And Why Nobody Cares

    • My gut feeling is that investors assume that the Fed will step in (or step in more than they already are). Just a hunch.


      It was not widely "known" but widely advertised or spun. Just because every pundit jumped on that bandwagon does not make it fact. Looking at the data closely and honestly, one finds that the incremental winter effect was marginal and only represented slight delays in consumption where there was possibly an effect. In fact, the areas with the least winter effect had some of the worst economic data.

      Moreover, we were told we were heading into a colder winter before the quarter and we were in the colder winter for the entire quarter but predictions for GDP remained elevated. Only in hindsight did the excuses come out.

      The prior YoY % growth data has been showing slower growth. This Q1 contraction is entirely within reason and the winter excuse is just that, an excuse. Really, face up to it: QE and centrally led manipulation of the economy does not work. Corporate cash, through earnings and through repressed rate loans, are being used for corporate buybacks and productivity Capex and not for hiring and not for market expansion.

      Thankfully, for the spinmeisters, increasing inflation is elevating GDP results and hiding the real trends.


    • It is pretty amazing when all this stimulus by the Fed to grow the economy has done nothing but inflate assets as the end result. For players in stocks and real estate it has been very beneficial. For everyone else not so much. However, be warned the equity markets are frothy and continued negative news regarding the economy and corporate earnings will create a severe decline in the financial markets before this is over.

    • As long as the Fed can keep the scam going, you have to stay somewhat in or get screwed like the elderly on fixed income or the working middle class with limited stock. Isn't a country controlled by banks wonderful.

    • No one cares because it's back page material and the press coordinate the noncoverage to protect Obozo.

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