US GDP Growth Was Actually 'Horrible'

[Pyramid5]

Mod Edit, Original thread title: Marc Faber: Report on US GDP Growth Was Actually ‘Horrible’

cnbc.com/id/33549682

“I wouldn’t rely on the GDP figures and I think the market will actually realise that they were quite poor,” Faber said.

The figures, which pleased investors by beating analysts’ consensus expectations Thursday, didn’t give positive signs for personal income and unemployment, Faber pointed out

The Federal Reserve could be set to repeat its mistakes of the past by keeping interest rates at practically zero for a protracted period, according to Faber.

“The risk on interest rates is on the upside and it will surprise you how high they will be in 5 or 10 years time,” Faber said.

“Fed policy encouraged people to further speculate in commodities,” he said.

The rising fuel prices also acted as a tax on people’s income and aggravated the strains on U.S. consumption, he added.

Faber pointed out that there is currently a tug-of-war between the government and corporations and consumers. The government is pushing corporations and consumers to increase leverage, while they try to reduce borrowing in the wake of the financial crisis, he said.

“If you have a drunk and he is drunk, you try to solve his problem by giving him more … this is role of the government. In my opinion this worked very badly,” he said.

Must note that many commentators here are encouraging people to go out and spend

[yoganmahew]

Calculated Risk has a piece on Mark Zandi’s analysis of the effects of government stimulus that backs this up to a degree:
calculatedriskblog.com/2009/ … ssion.html

At least, it backs it up in my view. The growth figure was entirely expected and pretty much entirely due to government stimulus. The government seems to be somewhat backed into a corner as to how much further stimulus it can put in, so it could be that peak stimulation has been reached (ooh-er, missus). If this is the case, then the private sector is going to have to step in. If this happens, you would expect to see increased employment, increased salaries, increased hours, or some combination of the three. This does not appear to be happening yet.

I say yet, because it is not clear where the stimulus is going to. It could be that it will hit the spot, or it could be fiddling around with the elbow…

[roc]

@Pyramid5

Must note that many commentators here are encouraging people to go out and spend

I never heard anyone here say they should borrow or leverage up to do it though.

[Pyramid5]

@roc

@Pyramid5

Must note that many commentators here are encouraging people to go out and spend

I never heard anyone here say they should borrow or leverage up to do it though.

Sorry, when I said here, I meant Ireland, not the Pin

[Mossy_Heneberry]

Peter Schiff’s take on it…

The GDP numbers out yesterday, which showed economic growth at 3.5% in the third quarter, brought a deafening chorus from public and private economists who all agreed that the recession is officially over. With such a strong report, they are happy to tell us that not only has the Fat Lady finished her aria, but she has left the building and is sipping champagne in the bath. As usual, it falls on me to rain on the parade.

Even the giddiest commentators admit that the upside GDP surprise resulted almost entirely from government interventions. But, by pushing up public and private debt, expanding government, deepening trade deficits, and pushing down savings rates, these interventions have succeeded only in putting our economy back on an unsustainable path of borrowing and spending. Accordingly, they have prevented the rebalancing necessary for long-term health. Could there be a simpler illustration of trading long-term pain for short-term gain?

europac.net/externalframeset … ype=schiff

[undertone]

A dead cat bounce?

[lord_vader]

reading the comments on the cnbc are very revealing, as he is anti american wants the end of the world etc

If people are thick enough to believe faber is wrong they deserve to lose their shirts and more

[needle]

@lord vader

reading the comments on the cnbc are very revealing, as he is anti american wants the end of the world etc

If people are thick enough to believe faber is wrong they deserve to lose their shirts and more

Cant see em - where are they?

[What_Goes_Up]

@needle

@lord vader

reading the comments on the cnbc are very revealing, as he is anti american wants the end of the world etc

If people are thick enough to believe faber is wrong they deserve to lose their shirts and more

Cant see em - where are they?

cnbc.com/id/33549682/comid/1#comments_top

[provost]

@Mossy_Heneberry

Peter Schiff’s take on it…

The GDP numbers out yesterday, which showed economic growth at 3.5% in the third quarter, brought a deafening chorus from public and private economists who all agreed that the recession is officially over. With such a strong report, they are happy to tell us that not only has the Fat Lady finished her aria, but she has left the building and is sipping champagne in the bath. As usual, it falls on me to rain on the parade.

Even the giddiest commentators admit that the upside GDP surprise resulted almost entirely from government interventions. But, by pushing up public and private debt, expanding government, deepening trade deficits, and pushing down savings rates, these interventions have succeeded only in putting our economy back on an unsustainable path of borrowing and spending. Accordingly, they have prevented the rebalancing necessary for long-term health. Could there be a simpler illustration of trading long-term pain for short-term gain?

europac.net/externalframeset … ype=schiff

He also has a video up on youtube:
youtube.com/watch?v=OKv1qg-K78o

Phony GDP Growth

[FAUGH45568]

Bottom line iwht the GDP, + figure was due to once off items i.e 8K grant to hosue buyers… cash for clunkers etc…

Typical distribution day yesterday i.e offload to the guy on the street on GDP good news and good chicago PMI…