OK Guys and Gals here on ATS, If Y'All remember just The Week Before Christmas (and All Through The House, LOL), we were told that The Economy here
in The US Grew at a Five Percent Rate in The Third Quarter, Big Whoopy for us all, Right?
Well, this little article kinda clears things up for all of us, who care to take a look at what's really going on behind The Manipulated Numbers. It
seems that most of The Increase in GDP was due to increased spending on OBAMACARE!
Now, I know it's Money being spent into the Economy. But Really, this is not Productive Consumer Spending by any stretch of The Imagination. What
we have here is A Failure To Communicate THE TRUTH!
So, does anyone one of us have anything to say about this. To me this is an Abysmal Excuse for So Called Economic Growth.
Mods, I have placed this in The Global Meltdown Section. As always please fell free to move this anywhere you like at your discretion.
Thanks Y'All and Have A Happy Rest of Your Holidays.
Economics / US Economy
Dec 27, 2014 - 12:31 PM GMT
Shah Gilani writes: Sit down before you read this.
It’s going to make your head spin and, worse, change the way you think about what’s real in America.
However, this branch of the U.S. Department of Commerce, didn’t put its gift under anybody’s tree. They put it over all of us.
The gift was headline news that the “third revision” of third-quarter gross domestic product (GDP) showed the U.S. economy grew at a whopping 5%
annualized rate, not the 3.9% rate posted in the “second revision.”
That sounds like good news, right?
Well, here’s what’s scary…
“Ho! Ho! Ho!” said the stock market. Good news is now good news on top of bad news being good news for stocks.
And so, with just enough time before Christmas for the stock markets to react, we got a 5% “print” from the BEA, which pushed the Dow Jones
Industrial Average above 18,000 while the S&P 500 made yet another all-time high.
Too bad the BEA is a Bad Santa. The latest revision was a “put-on.” The folks at the BEA put it over on all of us.
What they did to get to that 5% number – to make us all feel gifted by a robustly recovering economy, to get us to go out and spend spend spend, to
get stocks to soar – was pure prestidigitation. It was pure legerdemain.
It was pure BS.
I’ll prove it to you. Here’s what the BEA posted on its website:
“The GDP estimate released today is based on more complete source data than were available for the ‘second’ estimate issued last month. In the
second estimate, the increase in real GDP was 3.9 percent. With the third estimate for the third quarter, both personal consumption expenditures (PCE)
and nonresidential fixed investment increased more than previously estimated (see ‘Revisions’ on page 3).
“The increase in real GDP in the third quarter primarily reflected positive contributions from PCE, nonresidential fixed investment, federal
government spending, exports, state and local government spending, and residential fixed investment. Imports, which are a subtraction in the
calculation of GDP, decreased.
“The acceleration in the percent change in real GDP reflected a downturn in imports, an upturn in federal government spending, and an acceleration
in PCE that were partly offset by a downturn in private inventory investment and decelerations in exports, in state and local government spending, in
residential fixed investment, and in nonresidential fixed investment.”
In the second paragraph, the BEA says the increase “primarily reflected positive contributions from PCE, nonresidential fixed investment, federal
government spending, exports, state and local government spending, and residential fixed investment.” Then in the very next paragraph, it says that
“an upturn in federal government spending, and an acceleration in PCE that were partly offset by a downturn in private inventory investment and
decelerations in exports, in state and local government spending, in residential fixed investment, and in nonresidential fixed investment.”
How can you have an increase in PCE and the other stuff that was “partly offset by a downturn” in the same stuff the BEA said had increased?
I’ll tell you what’s going on.
Do Look This Gift Horse in the Mouth
The increase in personal consumption expenditures is all that matters. The BEA increased that number so much in the revision that nothing else
Of course, its double-talk matters, but that’s just minor rubbish.
What the BEA gift-givers did in their revisionist juggling act was knock down personal savings by revising savings down over previous months by almost
20% and magically put all that money, about $140 billion, to work in the economy.
And presto, we had 5% GDP growth.
It gets funnier and freakier.
They said most of the increase in spending was on Obamacare. How many people do you know who bought into Obamacare last month?
They said last month we increased our gasoline and energy consumption by a whopping 4.1%. However, I recall oil prices falling almost 50% and gas
prices falling more than 20% since late summer.
And about that PCE increase. We whooped it up spending on what? Christmas presents in July, August and September, long before Black Friday sales and
Maybe we did spend $140 billion earlier than we planned to spend on the holidays. Because we sure didn’t spend much on them.
According to most analysts, we saw disappointing Black Friday sales. And ShopperTrack had expected a $10 billion Super Saturday this year, but
according to that analyst,sales on the last Saturday before Christmas were up only 0.5% from last year’s $9.1 billion.
RetailNext just said spending at specialty stores and large footprint retailers was down 8.9% over the weekend before Christmas versus a year ago. And
traffic was down 10.2%.
We better be shopping online!
Okay, that’s getting ahead of the third-quarter numbers I’m talking about. But you get the point. How could we have spent $140 billion more in Q3
before the holiday season when the holiday season looks like a mini-bust?
Don’t even get me started on home sales.
Just say “Ho! Ho! Ho!” and enjoy the market rally while it lasts. The fabricators in our government bureaus are beholden to the powers that
manipulate us all.
If it’s a feel-good feeling they want us to have, mission accomplished.
Happy holidays… suckers.
Source : www.wallstreetinsightsandindictments.com...
Christmas came early this year, for the market that is, by way of a gift from the U.S. Bureau of Economic Analysis.
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