We all know the government’s first reported economic number is manipulated to its best result in order for Wall Street shysters to levitate the stock market with their HFT supercomputers. Then subsequent revisions downward are downplayed and ignored. It’s the American way. This figure will be revised into negative territory over the next few months.

The pitiful reported 0.1% GDP number is a joke. The BEA bozos actually expect you to believe that inflation was only 1.4% over the last year. Their manipulated bullshit figure is even lower than the CPI lie put out by the BLS drones. Inflation is running north of 5%. REAL GDP is in the NEGATIVE 4% to 5% range.

The propaganda peddlers on CNBC are ecstatic about the 3.1% gain in consumer spending. WOO HOO!!!!

It seems the dramatic surge in consumer spending was to pay for the massive increases in health insurance premiums due to Obamacare, the sky high heating bills from the frigid winter, and the 13% increase in gasoline prices. Oh I forgot. The BLS tells us that gasoline prices were falling in the 1st quarter.

How can the talking heads blame the cold winter for the terrible GDP when consumer spending accounts for 71% of GDP and it surged due to the cold weather? Hmm.

So we have an “economic recovery” driven by people forced to spend more for healthcare, energy and food while receiving 0% return on their savings, seeing their real wages decline, and being taxed more by local, state and federal governments. At least there are still those gigantic potholes on every road in my state.

This report was an absolute disaster and PROVES we are in recession. Wall Street will be ecstatic and will levitate to new highs. If Obama can just get World War III started in the 2nd quarter, GDP will soar and economic recovery will have arrived.

GDP Shocker: US Economic Growth Crashes To Just 0.1% In Q1

Tyler Durden's picture

Despite consensus at 1.2% growth QoQ, the “weather” destroyed the fragile stimulus-led economy of the US which managed only a de minimus +0.1% QoQ growth (the lowest since Q1 2011). However, as Steve Liesman noted on the heels of Mark Zandi’s comments “basically ignore this number” – ok then. Spending on Services, however, surged by the most since 2000 – heralded as great news by some talking heads – but is merely a reflection of the surge in healthcare and heating costs (imagine if it had not been cold and if Obamacare hadn’t saved us). As a reminder – this is the growth that is occurring as QE has run its course, as stimulus ends, and as escape velocity nears… if the “weather” can do this much damage to the US economy, should stocks really be trading at the multiple of exuberant future hope that they are?




The full breakdown of GDP components:


If It Wasn’t For Obamacare, Q1 GDP Would Be Negative

Tyler Durden's picture

Here is a shocker: for all the damnation Obamacare, which according to poll after poll is loathed by a majority of the US population, has gotten if it wasn’t for the (government-mandated) spending surge resulting from Obamacare, which resulted in the biggest jump in Healthcare Services spending in the past quarter in history and added 1.1% to GDP …

… real Q1 GDP (in chained 2009 dollars), which rose only $4.3 billion sequentially to $15,947 billion, would have been a negative 1.0%!


It’s curious how the weather impacted (or rather is used as an excuse to explain) everything but government-mandated healthcare spending in the first quarter.

And of course, for all those who correctly point out that mandatory spending on healthcare, also known as malinvestment, took away from spending on every other discretionary item possible, well… you are right.


About That CapEx Spending Renaissance…

Tyler Durden's picture

For all the talk that imminent, inevitable, “any second now” CapEx spending renaissance is getting, we can only assume we are looking at a wrong chart of the change in quarterly fixed income spending that plugs straight into the US GDP calculation. There is no other possible explanation.


  1. If there had been a legitimate recovery back in 2009 to match the narrative, they wouldn’t still be using the word “recovery” five years later.

    The reality is that there was no recovery. There is no recovery. There won’t be a recovery in the future until the policies change.

    The government is too big. It spends too much on the wrong things. It’s taxing and regulating the productive sector into oblivion. Lies and manipulated statistics won’t change that reality.

  2. Pretty hilarious. Were it not for government spending, the economy would have collapsed. The REAL economy, ex-government borrowing and spending, has collapsed. Obama has taxed people to death with 248 new taxes, Medicare taxes, SS ponzi scheme taxes, fees, state and local taxes. And Obamacare is the 800lb gorilla that is devouring productive capital and turning it into crap. Obamacare is going to bankrupt states and individuals, and eventually our entire nation.

    The government is a parasite on our economy, and it’s sucking the life blood out of businesses and consumers with taxes, spending and regulations. Our only hope, as an economy, is for businesses to produce and create jobs. But businesses are fleeing the country to get away from the fascist, parasitic government, parasitic unions, and the 112 million welfare/disability parasites sucking money for nothing.

    As GDP shows, the host is dying at the hands of the parasites. It’s pretty simple. And don’t forget, the Fed is still printing $65 billion a month just to keep the banks and nation solvent. And as GDP goes negative, the $17.5 trillion debt becomes an even bigger drag on the economy (debt to GDP ratio). The government produces nothing, and takes everything. The government will drain every last dollar of productive income from the producers, and redistribute it to the parasites. The government will run out of other people’s money, and the whole socialist charade will be over.

  3. 2014-04-30 08:55 by Karl Denninger

    GDP: Goodnight

    Now that’s a crap report.

    Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 0.1 percent in the first quarter (that is, from the fourth quarter of 2013 to the first quarter of 2014), according to the “advance” estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 2.6 percent.

    What do we find inside?

    Exports and investment, mostly. These are very bad places to take deceleration as they will flow through to PCE in coming quarters.

    PCE was up 3% (annualized) which compares reasonably well against 3.3% from last quarter right up until you realize that nearly all of it was due to government “social benefits” (read: Welfare in various forms) paid out.

    Non-residential fixed investment was down 2.1% and the bad news was not in structures; it was a equipment (down 5.5%.) Yuck. Oh, residential “investment” was down 5.7% too. Housing is now hosing.

    Exports were down a massive 7.6%; that’s nearly into collapse territory. Imports were also down, but not much — just 1.4%. Note that imports are considered a subtraction from GDP while exports are an addition. The relative balance is going the wrong way.

    Oh, and we’re still spending more than we take in, which means we’re accumulating more debt. So much for the “improving personal balance sheets” that the clown-car brigade likes to cite — it’s been a lie all along, and still is.

    In a word: Meh.

    1. dd

      Who won the bet? Oh yeah. That’s right. ME.

      Tell us all how rich you’ve become as a master stock market investor. I love those stories.

    2. dd

      Tell us how you sold at $72 and avoided the current 22% crash in Faceplant. I’m sure your technical indicators told you when to sell.

  4. Do you have faith in this dried up Alzheimer’s infest hag?


    The Fed held an emergency meeting, which usually means one or more banks are insolvent, big banks, or somebody is dumping massive amounts of treasury IOU’s. A crisis is a’brewing folks. Get your money out of the banks while you still can.

  5. When you consider that the Feds have changed the GDP computation – to make it as favorable as possible – then realize a 0.1% increase is probably a drop in GDP when reported using the old indicators. We’re in negative territory.

  6. You won! As I was clear about all along, I never owned FB. As I said, my target infil was 16 and like a fool I missed it. Short it now. Numbers are impressive but I feel their competitive position is weakening. Also short a basket of bubble internet/cloud garbage.

    I am not a wizard, just a guy grinding out a living.

    I agree with almost all that you say, in some instances I am more extreme than you. For instance, I believe more strongly in false flag events. Why end with the Gulf of Tonga?

  7. I don’t do technicals and never listen to anyone who does. Picking tops and bottoms in volatile, overvalued stocks is pure luck. Admin has rightfully questioned my credentials. I do manage outside and personal money as a full-time job, my only claim to fame is that I am still solvent.

  8. “Admin, … you just talk and write. no action.” —– dd

    “I agree with almost all that you say,” —– dd

    fyi …. they have cures now for Bi-polar Disorder. :mrgreen:

  9. Stucky: almost does not equal all, thus the discussion. The rest is not discussed. You seem a simple man, back to sleep.

  10. Day trader dd

    “Holy shit, Facebook is up another 2.8% today, why did I short it? Why do I trade stocks? Why don’t I do something useful and productive with my life instead of gambling?”


  11. AWD, you have it all wrong but whatever.

    Stucky: good point on sleeping better, you are probably right.

    I am reminded why I left TBP a few years ago. Pretty inane crowd. I love busting balls with the best of them, but you guys responding to me with the day trader accusation within minutes … does that make you a day-blog poster? Comments seem sloppy enough … take care Admin. You write well.

  12. I’m sure dd is an “investment professional”.

    Which is tantamount to a monkey throwing darts….

    “Burton Malkiel got famous for challenging top fund managers to a contest, where he would throw a dart at the list of stocks, and would be the top fund managers. His conclusion. Buy an index fund. Stock picking is a losers game.

    However, a monkey throwing a dart will also beat the s and p 500. Why? Well the s and p 500 is very tilted toward large growth stocks, which are among the worst performers.”

  13. Nice going, AWD. You fuckin’ ran off another fine poster. I’m pretty sure it wasn’t my loving and funny comments.

    Since he’s gone, maybe you can answer this question; how in the hell does someone with such thin skin survive in the wacky world of stock trading?

  14. I have no idea, Stuck. I lose money every time I invest. It’s gambling, and like all gambling, don’t spend more than you’re willing to lose.


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