One month ago I made this post. On that day our beloved government drones at the BEA announced 1st quarter GDP of POSITIVE 0.1%.
I called bullshit and made these comments:
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.
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.
Well the first revision is out today and guess what? I was right again. First quarter GDP is now down to NEGATIVE 1%. It will be revised down further. The talking heads will regurgitate the bad weather meme until the cows come home, but it was exports that were revised strongly downward. Did bad winter weather across the entire world keep people from buying our products?
The government drones still insist inflation was only 1.2% in the 1st quarter. That is beyond laughable. REAL GDP in the 1st quarter was closer to NEGATIVE 5%. The higher costs you paid for energy, food and Obamacare actually boosted GDP. Now that is fucked up.
For 99.9% of the people in this country we are experiencing a recession. Meanwhile, the stock market reaches new heights as the .1% have rigged the political, economic and financial system to only benefit themselves. Their time is coming. The music is still playing and they’re still dancing. But the music will end – sooner than they expect. Then there will be hell to pay.
US Economy Shrank By 1% In The First Quarter: First Contraction Since 2011
Submitted by Tyler Durden on 05/29/2014 08:49 -0400
Weather 1 – Quantitative Easing 0.
Spot on the chart below just how high the culmination of over $1 trillion in QE3 proceeds “pushed” the US economy.
Joking aside, even if the realization that nobody can fight the Fed except a cold weather front is quite profound, in the first quarter GDP “grew” by a revised -1.0%, down from the 0.1% first estimate, and well below the -0.5% expected, confirming that while economists may suck as economists, they are absolutely horrible as weathermen.
Bottom line: for whatever reason, in Q1 the US economy contracted not only for the first time in three years, but at the fastest pace since Q1 of 2011. It probably snowed then too.
The breakdown by components is as follows:
- Personal consumption was largely unchanged at 2.09% from 2.04% in the first estimate and down from 2.22% in Q4. Considering the US consumer savings rate has tumbled to post crisis lows at the end of Q1, don’t expect much upside from this number.
- Fixed investment also was largely unchanged, subtracting another 0.36% from growth, a little less than the -0.44% in the first estimate and well below the 0.43% contribution in Q4.
- Net trade, or the combination of exports and imports, declined from
-0.83% to -0.95%, far below the positive boost of 0.99% in Q4.
- The biggest hit was in the change in private inventories, which tumbled from -0.57% in the first revision to a whopping -1.62%: the biggest contraction in the series since the revised -2.0% print recorded in Q4 2012.
- Finally, government subtracted another -0.15% from Q1 growth, more than the -0.09% initially expected.
So there you have the New Normal growth, which incidentally now means that in the rest of the year quarterly GDP miraculously has to grow at just shy of 5% in the second half for the Fed to hit the “central tendency” target of 2.8%-3.0%.
And now we await for stocks to soar on this latest empirical proof that central planning does not work for anyone but the 1%.