Economy GDP revised down to negative 2.9% first quarter

[fskimospy]

Sure it does. GDP growth in the US will generally be between what say +/-5%. It would be exceedingly rare for it to be outside of that range.

So being off by 3% is a pretty shitty estimate when your range of possible values is so small.

GDP revised down significantly. Dow up 43 points.

How exactly do you make money trying to guess what irrational people will do?

Because over longer periods the market reflects underlying economic trends. If the market is currently mispricing itself due to belief in reports that you believe to be useless, that's obviously an opportunity for arbitrage.

So again, when will you mint your first million using your amazing knowledge of economics?

Dumbass.

 

[nehalem256]

Because over longer periods the market reflects underlying economic trends. If the market is currently mispricing itself due to belief in reports that you believe to be useless, that's obviously an opportunity for arbitrage.

What does that have to do with the worthlessness of the 1st GDP estimate?

 

[fskimospy]

What does that have to do with the worthlessness of the 1st GDP estimate?

Because the markets react to GDP estimates. Since you know they shouldn't because they are worthless, you can take advantage of that.

For the third time, when will your first report on your riches be coming out, economic genius?

 

[Jaskalas]

GDP revised down significantly. Dow up 43 points.

How exactly do you make money trying to guess what irrational people will do?

The Dow has proven itself decoupled from the actual economy for some time now. All the Feds need to do is print loan a little more, and it skyrockets. Its value appears largely based on easy money.

Think of it as a commodity of the 1%. They are doing rather well under current economic policy, rest of us... not so much.

 

[TheSiege]

Can we not argue over if the numbers are cooked or changed for political reasons. This was actually a decent thread before people starting claiming fraud.

 

[spidey07]

The obama recession continues. Next up they'll try and say it was the severely cold winter caused by global warming that caused it. Couldn't possibly be obamacare and this admins economy killing policies.

 

[JockoJohnson]

Bush's fault.

 

[realibrad]

The obama recession continues. Next up they'll try and say it was the severely cold winter caused by global warming that caused it. Couldn't possibly be obamacare and this admins economy killing policies.

I'm not fan of Obamacare, but I dont think the effects have been large enough to be measurable yet.

 

[Daverino]

The Dow has proven itself decoupled from the actual economy for some time now. All the Feds need to do is print loan a little more, and it skyrockets. Its value appears largely based on easy money.

Think of it as a commodity of the 1%. They are doing rather well under current economic policy, rest of us... not so much.

The Dow is a measure of the value of the companies that populate it. It's not an estimate. . . it's an actual. If you're looking at a benchmark as a predictor, you really don't know what a benchmark is for.

 

[boomerang]

The obama recession continues. Next up they'll try and say it was the severely cold winter caused by global warming that caused it. Couldn't possibly be obamacare and this admins economy killing policies.

Hey, you're way off base and I've got to call you out on it. The problem is Bush and the Republican controlled House.

I don't want to have to do this again so let's get it right from now on. We're still in the Bush economy and will be until late January of 2017.

 

[Kwatt]

Can we not argue over if the numbers are cooked or changed for political reasons. This was actually a decent thread before people starting claiming fraud.

I no longer believe a discussion about this is ever going to be possible.

Seems like there is more concern in fixing the blame than discussing the problem....


.

 

[Kwatt]

Good thing GDP numbers are:

2.) don't vary to that degree

Corect me if I am misunderstanding the #'s please.

Org. est. -1 latest -2.9. Is that not a 190% mis?

Is that considered close?

Thanks

.

 

[fskimospy]

Corect me if I am misunderstanding the #'s please.

Org. est. -1 latest -2.9. Is that not a 190% mis?

Is that considered close?

Thanks

.

That wasn't the original estimate, and analyzing it like that would be silly anyway. Additionally, this result is notable due to the fact that it is much larger than is normal.

Does that help?

 

[glenn1]

Because the markets react to GDP estimates. Since you know they shouldn't because they are worthless, you can take advantage of that.

For the third time, when will your first report on your riches be coming out, economic genius?

Let's test your economic intelligence. Why do you, Eskimospy, think the market went up after economic reports showing a negative GDP revision?

 

[nehalem256]

Because the markets react to GDP estimates. Since you know they shouldn't because they are worthless, you can take advantage of that.

Worthless. As in you don't know if latter estimates will be higher or lower or in fact the same.

 

[Kwatt]

That wasn't the original estimate, and analyzing it like that would be silly anyway. Additionally, this result is notable due to the fact that it is much larger than is normal.

Great, I can't even get the number right.

Does that help?

No

What was the org. #?
How should #'s be analized?
With so many making decisions based on the est. Is larger than normal good or bad?


Thanks

.

 

[shira]

Let's test your economic intelligence. Why do you, Eskimospy, think the market went up after economic reports showing a negative GDP revision?

I think the markets are going up today because they went DOWN significantly yesterday on advance reports that the 1st-quarter adjustment would be really bad.

With one additional day to reflect on the numbers, the markets are now realizing they over-reacted yesterday.

Edit: And another possible "driver" is that is that investors are probably thinking that the bad 1st-quarter numbers may slow down the Fed's backing off on QE3.

Remember: Greed and fear. Greed and fear.

 

[Bitek]

Corect me if I am misunderstanding the #'s please.

Org. est. -1 latest -2.9. Is that not a 190% mis?

Is that considered close?

Thanks

.

That's not the proper way to assign error. The %growth is simply the delta between the size of the econ between quarters. The error needs to be applied to that number. Eg $17T +/- 0.3T.

It takes additional time to add up and clarify all the various components of the GDP figure. Same with employment numbers. The markets know this

 

[Kwatt]

That's not the proper way to assign error. The %growth is simply the delta between the size of the econ between quarters. The error needs to be applied to that number. Eg $17T +/- 0.3T.

So, a 3% growth would be 17T * 0.03 and a -3% contraction would be 17T * -0.03.

Thanks for clearing that up.

It takes additional time to add up and clarify all the various components of the GDP figure. Same with employment numbers. The markets know this

I get a big "Butterfly Effect"


.

 

[Daverino]

Let's test your economic intelligence. Why do you, Eskimospy, think the market went up after economic reports showing a negative GDP revision?

I'll answer that because it's easy.

Q1 ended in March. Today is June. The economic contraction between January and March worked itself out of the valuation of the markets months ago. Everyone knew that the economy contracted in Q1 despite the estimate made in the winter of last year. The news today only states that the contraction was worse than people thought.

Regardless it still happened months ago and, as eskimospy said, if this was surprise today there is an arbitrage opportunity because prices and values would not correlate in the markets.

 

[Knowing]

I'll just leave this here.

I'll also note that unemployment didn't drop in May and the rate of people joining & leaving the economy is basically balanced. This leads me to believe that the drop in unemployment in April had more to do with the fall of the participation rate than anything else. Alas, three months is still not "long term" enough to draw pretty strong enough correlations to convince anyone here of anything.

 

[shira]

So, a 3% growth would be 17T * 0.03 and a -3% contraction would be 17T * -0.03.

.

I think this is NOT correct. The figure is for the quarter, extrapolated to a yearly result. So the actual (2.9%) loss for the quarter would be something like:

17T*(1 - (0.971**.25))/4

 

[Attic]

2 negative GDP prints in a row is considered recession. Important given that Q1 print went so negative after it's final revision.

The original estimate for Q1 was for 0.1% growth. It had been revised down until final -2.9% growth.

Why?


This should attract your attention



What they sucked out in the final revision is going to be put back in for Q2 as needed in order to avoid official recession. Q1 was going to be negative no matter what, so they lopped of 40billion+ from the healthcare services contributions for Q1 and just went with more negative. Nice. That sum will be put back in for Q2 in order to give a buffer to ensure Q2 doesn't print negative and signal official recession.

In addition to that you have government under reporting inflation, so GDP is worse than what's being stated. Good times all around.

Perhaps if any of the propaganda artists who work for the department of commerce want to post their thoughts here we can have some real fun.

Cliffs: Guaranteed growth for Q2 though more accounting gimmicks.

 

[fskimospy]

2 negative GDP prints in a row is considered recession. Important given that Q1 print went so negative after it's final revision.

The original estimate for Q1 was for 0.1% growth. It had been revised down until final -2.9% growth.

Why?

This should attract your attention



What they sucked out in the final revision is going to be put back in for Q2 as needed in order to avoid official recession. Q1 was going to be negative no matter what, so they lopped of 40billion+ from the healthcare services contributions for Q1. Nice. That sum will be put back in for Q2 in order to give a buffer to ensure Q2 doesn't print negative and signal official recession.

In addition to that you have government under reporting inflation, so GDP is worse than what's being stated. Good times all around.

Perhaps if any of the propaganda artists who work for the department of commerce want to post their thoughts here we can have some real fun.

Cliffs: Guaranteed growth for Q2 though more accounting gimmicks.

1.) Inflation is not under-reported. It correlates well with independent estimates. This is a common complaint on conspiracy crank sites when their predictions of inflation have turned out to be false. Instead of finding out why their understanding of economics was wrong they pulled an 'unskewed polls' and decided that the numbers were a lie.

2.) Please provide evidence for the claimed manipulation and be as detailed as possible. This is a very serious allegation and should be investigated thoroughly.

What spending is being added back in?
What is the mechanism for adding it back in?
Who is making this manipulation?
How are they doing so without violating the public rules and methods for calculating this data?
At who's behest are they making these manipulations?

Etc, etc.

It's easy to claim the numbers are fudged, but when actually called on to show how this is the case it's interesting how quickly this falls apart.

 

[Daverino]

2.) Please provide evidence for the claimed manipulation and be as detailed as possible. This is a very serious allegation and should be investigated thoroughly.

What spending is being added back in?
What is the mechanism for adding it back in?
Who is making this manipulation?
How are they doing so without violating the public rules and methods for calculating this data?
At who's behest are they making these manipulations?

The Iron Bank of Braavos is doing it. . .