Official GDP release:

“Real gross domestic product — the output of goods and services produced by labor and property located in the United States — decreased at an annual rate of 1.0 percent in the second quarter of 2009, (that is, from the first quarter to the second), according to the “advance” estimate released by the Bureau of Economic Analysis.  In the first quarter, real GDP decreased 6.4 percent.

The decrease in real GDP in the second quarter primarily reflected negative contributions from
nonresidential fixed investment, personal consumption expenditures (PCE), residential fixed investment, private inventory investment, and exports that were partly offset by positive contributions from federal government spending and state and local government spending.  Imports, which are a subtraction in the calculation of GDP, decreased . . .

The much smaller decrease in real GDP in the second quarter than in the first primarily reflected much smaller decreases in nonresidential fixed investment, in exports, and in private inventory
investment, upturns in federal government spending and in state and local government spending, and a smaller decrease in residential fixed investment that were partly offset by a much smaller decrease in imports and a downturn in PCE.”

A few other items:

-Federal Spending up a huge 11%;

-Real personal consumption expenditures decreased 1.2%;

-Smaller decreases were seen in business investment, exports and inventories;

-This is the first time we have had 4 consecutive negative quarters of GDP since record keeping began in 1947;

-Real nonresidential fixed investment decreased 8.9%;

-Last Quarter’s GDP was revised down from negative 5.5% to negative 6.4%;

Peter Boockvar notes that GDP fell more than expected as the deflator rose just .2% (vs expectations of a gain of 1%). Had the deflator been in line, REAL GDP would have fallen 1.8%.

Bottomline: An improving, but weak report.

>

Source:
Gross Domestic Product: Second Quarter 2009 (Advance Estimate)
BEA, JULY 31, 2009

http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

Category: Economy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

241 Responses to “Advance GDP = -1.0%”

  1. Wes Schott says:

    http://www.bea.gov/newsreleases/national/gdp/2009/pdf/gdp2q09_adv_fax.pdf

    Real gross domestic product — the output of goods and services produced by labor and property
    located in the United States — decreased at an annual rate of 1.0 percent in the second quarter of 2009,
    (that is, from the first quarter to the second), according to the “advance” estimate released by the Bureau
    of Economic Analysis. In the first quarter, real GDP decreased 6.4 percent.

    The Bureau emphasized that the second-quarter advance estimate released today is based on
    source data that are incomplete or subject to further revision by the source agency (see the box on page
    3). The “second” estimate for the second quarter, based on more complete data, will be released on
    August 27, 2009.

  2. dead hobo says:

    Apologies for the cross post … this was down so far I don’t think anyone would have seen it.
    —————————————————————————————————————–

    gregh Says:
    July 31st, 2009 at 12:31 am

    i’m not sure what to make of the cars issue.

    Reply:
    ———–
    http://www.autoobserver.com/2009/04/goldman-ups-its-2009-car-sales-forecast.html

    Excerpt
    ———-
    Goldman Ups Its 2009 Car Sales Forecast
    April 23, 2009

    Goldman Sachs has increased its forecast for 2009 new vehicle sales from 10 million to 11 million.

    ******************************
    Now, do the math:

    250,000 sales * 52 weeks = 13,000,000 annualized rate.

    10,500,000 / 52 = 202,000

    Implication: a $3500 – $4500 guaranteed trade in on top on massive discounting brought about 50,000 additional sales to the dealers.

    -OR-

    $1,000,000,000 /50,000 = $20,000 => Uncle Stupid paid about $20,000 per car for the marginal increase in business this week. News reports state he wants to overpay for even more cars.

    Economically speaking, Uncle Stupid would have created a better economic effect if he bought the cars outright and gave them away.

    Assume a cost of $15,000 per car

    $1,000,000,000 / $15,000 = 66,666 cars.

    Add 66,666 to the estimated 202,000 sales that would have occurred anyway and the total for the week exceed the actual total by about 18,666 cars. This alternate approach would have reduced inventories even further, added more to the manufacturer contribution margin, potentially put people back to work sooner or given those working something to do, and maybe spurred additional sales.

  3. cvienne says:

    I’ll have you know BR…That since I’ve officially not watched CNBC for months now (and I’m becoming increasingly tired of Bloomberg as well)…

    (Kind of what it must have been listening to Seabiscuit – War Admiral) on a radio…

    You…man…are my first link source for getting this data…I appreciate the timeliness in getting it on the wire…

  4. cvienne says:

    @dh

    What raised my eyebrows was the “double taxation” aspect of this program…I’m going to have to look into that a little more…

  5. cvienne says:

    My first observation on the GDP numbers are that Treasuries are rallying…

  6. dead hobo says:

    BR stated:

    An improving, but weak report.

    reply:
    ———–
    Not really, YTD GDP is .9% lower due to the revision. Even if expectations were met for the current quarter, YTD GDP would be down .5% or .7%, depending on the expectations you are reading. How is any part of that good? That’s like saying the fire in someone’s hair went out just before they hit the ground from the cliff top. Yes, the lack of fire improved the situation from a certain perspective.

    Given the numbers you printed above, all of the GDP increase was due to government spending. (Welfare payments, essentially)

  7. willid3 says:

    if labor is part of GDP, how is it that the GDP isn’t down more considering we have almost 20% unemployment? and along with the mandatory furlough days? and incomes cuts to go with it?

  8. dead hobo says:

    BR, I’m not smart enough to track this through, but maybe you can figure it out or pass it along to someone who can.

    China is said to be spending like crazy to expand credit in China. Basically, reports seem to say that a Chinese credit bubble is forming because of loans being made to create excess capacity. When their credit bubble explodes, how will that affect their purchases of US debt? I suspect it would cause them to buy less credit and cause UST rates to explode. This would have an adverse downstream effect on the people of the US and, later, the rest of the world.

    Comment? Any details to refute an error in an assumption or details to scare the crap out of anyone who reads this?

  9. cvienne says:

    What’s interesting to me was that the IMPORT/EXPORT quotient was a contribution (which was expected), yet the wat in which that came in was unexpected…

    Meaning:

    Imports decreased (expected)
    Exports decreased more than expected (unexpected)

    This basically tells you a few things.

    - The ROW isn’t consuming either
    - The weak dollar didn’t seem to provide much help in that matter
    - Our consumption had to be even WEAKER to make that reading the way it was under those auspices

    Now factor in 2nd derivatives, such as oil, and to me it paints a picture of incredible stagnation…

  10. willid3 says:

    dh, not sure that cash for clunkers was ever going to do much for car sales. every thing i had heard about said it would be ending about week after it started (not sure but i don’t think it lasted even that long). mainly because most tradeins are worth more than 4500 to begin with (unless its really in bad shape or old) and the dealer can resell the tradein. they can’t resell the clunker it has to be crushed after they get it. could it have been done better? maybe vouchers for those with older cars and really bad gas mileage with a certain income level. not sure that it would have been that much better though. but the impact of cars on the economy isn’t small. and the idea of them buying the car might have worked, but nobody would have supported that

  11. cvienne says:

    @dh

    Marc Faber was on an interview on Bloomberg just yesterday saying he figures Chinese GDP to be more in the 3% range instead of the 7-8% “published” numbers…

    He attributes that to weakened demand by ROW for Chinese made goods…

    Sure it will have an effect on the purchase of US debt going forward, but the Chinese still have to play the game of keeping what they hold from getting routed…

    That’s the dance…

    What it mostly means to me is that the Government better start realizing quickly that spending trillions in stimulus is going to be very hard to fund…Which will cause other problems…Pick your poisin…

  12. willid3 says:

    CV, not sure the dollar is that weak. because if it was, you would expect all the importer to the US to devalue their currencies ASAP to avoid loses.
    and i am not sure who is buying since the consumer (aka workers) certainly have no reason to buy any thing at this point.
    if the feds hadn’t pushed money into the economy it would have been much worse

    and is stagnation or deflation thats happening?

  13. Paul S says:

    WTF? Bottom line “improving”? More like- less craptacular than 1Q but still pretty craptacular.

  14. Marcus Aurelius says:

    We seem to be at the point where the smallest lull in our descent is glommed onto as if it would somehow magically alter the outcome of having jumped into the abyss in the first place. Instead of hitting the ground at 200 mph, we’ll now hit it at 198 mph. That’s good!

    GDP (receding as it is) is the least of our worries. A more important fact was that reported by BR yesterday: SPX Earnings. Clearly, we are in a new bubble. The psychology of the current level of enthusiasm for investment in stocks — despite the fact that that those stocks have virtually no chance of holding the value invested — parallels the insanity we witnessed during the housing bubble.

    A simple question: If not earnings (or capital improvements, or new products/services, or new business paradigms), what is driving the increase in stock prices?

    This is the question Madoff’s “clients” should have been asking themselves.

    We are witnessing another Ponzi scheme, and as soon as the bottom of the pyramid stops expanding, all hell will break loose.

    On a side note, “GDP” is an inappropriate concept once a negative rate of growth has begun. We now have Gross Domestic Loss (GDL).

  15. cvienne says:

    @willid

    Dollar not weak?

    The DX hit (what was at the time) the lowest reading of the year during the quarter…and it was substantially lower quarter over quarter vs. Q1

  16. mtl says:

    maybe i’m naive but isn’t less bad a sign that eventually things will continue to get less bad and then eventually good …??? i’m not saying you should try and catch a falling knife but … from what i’ve seen we go through this every recession… and things often get better a lot faster than most people think just like things get a lot worst a lot faster than most people think.

    it’s always the ‘end of the world’ and always ‘the worst recession since the great depression’ until people wake up and realize there is no new paradigm… i’m not typically an optimist but is it really that hard to see the light at the end of tunnel???

  17. cvienne says:

    @willid3

    “if the feds hadn’t pushed money into the economy it would have been much worse”

    Yeah – for GS & JPM & overall “poll numbers”…not sure about anything REAL

  18. Mannwich says:

    “Better than expected” though………again!! Party on!

  19. cvienne says:

    @mtl

    The light is always dimmest the moment before it turns PITCH BLACK…

    It’s not that nobody is an optimist, it’s simply that we haven’t faced reality…

    We are artificially propping up numbers with dollars we don’t have (and borrowing from tomorrow to pay for)…

    Ask yourself…if you had a $10,000 visa balance, car payments, rent or mortgage payments, etc. and you suddenly realized that you lacked the cash flow to pay for them, what then, if an offer came in the mail for a shiny new $20,000 VISA card (which you could write checks off of)…

    You’d immediately feel happier right? It gives you “x” more months of cash flow…But then what if your hours get cut back at work…The balances & interest payments keep getting larger, etc.

    Get the picture…All we did when we “rolled over” our elected officials in Washington was to “roll over” our credit card balances…

    So you tell me when it’s going to get better…

  20. dead hobo says:

    mtl Says:
    July 31st, 2009 at 9:30 am

    maybe i’m naive but isn’t less bad a sign that eventually things will continue to get less bad and then eventually good …???

    reply:
    ———–
    In an average world, absolutely. In this world, everything appears to be a spin calculated to separate you from your money. Less bad is used to imply ‘great’ and offered with hope to convince you to give your cash to commissioned financial sales people. It’s used to deceive, not inform. The spin is also insulting and obvious, which makes me angry when I hear it. If it were on the fringes, I would ignore it. Since it has become mainstream, it just makes me want to buy food and put it in the basement since so many are fooled by so obvious a manipulation. Lies become truth. Scamsters become liquidity providers. It’s doublespeak.

  21. Mannwich says:

    Let the panic buying continue. Nevermind reality, folks.

  22. Marcus Aurelius says:

    hobo:

    Yup.

  23. cvienne says:

    “cash for clunkers 2″ ought to come out just in time for everyone to buy a worthless FIAT with some worthless fiat…

    Imagine that…by the time we get to “cash for clunkers 10″…you’ll be trading in a clunker FIAT to buy a new clunker FIAT, with some clunker fiat currency…

    I love the ingenuity of this country!

  24. franklin411 says:

    @Mannwich
    The reality is that the bulls have been right and the bears have been wrong. None of the bearish bogeymen have turned out to be real: the 20% unemployment number, the double dip, hyperinflation, the “bond vigilantes,” etc… have all proven to have existed only in the paranoid minds of the pessimists.

    I don’t put Barry in that camp, but I do note that he’s been saying “It’s bad, but not as bad as I thought it would be…” over and over and over and over again since the President’s policies began taking hold in March.

  25. beaufou says:

    Isn’t the less bad news just a sign of deflation in the horizon. Feudal times here we come.

    Just want to ask you guys about the bonuses distributed with TARP money.

    CEOs knew they were going to get caught, but had plenty of time to put the money away.
    Even if they’re prosecuted, they’ll keep the dough.
    There are news that they dropped their shares too.
    Do you think they paid themselves before the house burns down knowing the situation is worse than reported.

  26. manhattanguy says:

    Franklin – I think wise people sold the market yesterday.

  27. cvienne says:

    Whoa!

    Did eveyone just see the hammer get put down on futures?

  28. franklin411 says:

    @manhattan
    The market is not the economy.

  29. cvienne says:

    Thanks Franklin –

    I copied your (9:53) so I can refer the link back to you on a later date…

  30. manhattanguy says:

    “The market is not the economy.”

    Yes, that’s why one is not reflecting the other. If it did, S&P won’t be trading at infinity times earnings.

  31. cvienne says:

    …and I’m not talking about the MARKETS, I’m talking to the “lag” effect of what bad economic policy holds forth…

    The present numbers are still only a reflection of HOPE

  32. franklin411 says:

    @manhattanguy
    How do you know that traders didn’t anticipate this robust GDP number? Buy on the rumor, sell on the news.

  33. I-Man says:

    Interesting…

    We just breached yesterdays gap support…

  34. manhattanguy says:

    Franklin – Markets got ahead of fundamentals. As Barry pointed out, a lot of the benchmark has been lowered to make numbers seem good. I won’t believe it until I see consistency in numbers. I am in the camp of Double dip recession. Remember first time UE claims is still going up. Very few employers are hiring. Markets are propped up to give hope to people and employers. Sorry it won’t work.

  35. HCF says:

    @franklin411:
    >How do you know that traders didn’t anticipate this robust GDP number?

    Robust? -1% is NOT robust… Did you not notice the negative sign in front?

    HCF

  36. I-Man says:

    @ HCF:

    Hey, in la la land… -1% GDP IS robust… dont you know where we are bro???

  37. cvienne says:

    Franklin –

    Do you really think there are traders running around the floor with orders reacting to the friggin GDP numbers?

    If you have learned ANYTHING over the past months…The market “run-up” is mostly just quant algos calling up stocks to riduculous levels…The money fronted to settle those trades comes from the US taxpayer by way of Lloyd Blankfein & Jamie Dimon who PAID for that priveledge by making huge donations to your boy at 1600 Pennsylvania Ave…

    You really don’t think it was $10 checks do you?

    The problem is, now that the crisis SEEMS to be abating, they’re just going to have to manufacture another crisis to get people all scared again and make them believe the government is there to solve all their problems…

    I’m sure Rahm will come up with one…And there are enough fools around to still believe…

  38. Marcus Aurelius says:

    frankie:

    You ignore cost/debt moving forward. Repayment is deferred. Think of our current situation in terms of an honest balance sheet. I don’t think we’re heading in a less dangerous or less costly or damaging position.

    I remember when the spending on the war in Iraq was a bone of contention (wasn’t long ago). Those numbers are now considered quaint when compared to what we’ve spent on the banks and auto manufacturers.

    That said, I don’t believe you don’t see this for yourself (what with your teacher’s ken for critical thought, and all), as the deficiencies we face are fairly obvious. You are/have become a shill. A Party man. A deliverer of propaganda. You are a bagboy, sent ’round to . . .

    Nevermind.

  39. Pat G. says:

    Good bye recession, hello depression. If I’m not mistaken, 4 consecutive negative quarters of GDP marks the latter. Wonder what the 2Q GDP number would have really looked like without USG spending being up 11%? Re: Clunkers, USG just found another $2B to add to the program. Japan and China are you listening?

  40. jc says:

    The 2Q estimate is measured from the revised first Q which was revised down .9%, so without that revision GDP would have been off -1.9% greater than the anticipated -1.5%.

    Also 2008 was revised down -.7% which seems like a lot for the full year.

    These gove numbers are always revised down, we get a sunny headline number which grabs the headlines and then the sad truth dribbles out in downward revisions

  41. HCF says:

    @I-Man:

    LOL… Yeah, I forgot where we are. I’ll be sure to brake for unicorns on the way home…
    =)
    HCF

  42. franklin411 says:

    @Marcus
    We’ve established that I don’t care how much borrowing we do. I only care about how much borrowing we do to fund spending on what. For instance, Boeing borrowing to finance massive bonuses for its CEOs = bad borrowing; Boeing borrowing to finance the development of the 787 = smart borrowing.

    @HCF
    GDP contracted at -5.5% in the prior quarter. This quarter it contracted -1% — 5.5 times better than the prior quarter. And as Peter Boockvar points out, the prospects for a return to growth next quarter are excellent.

    http://www.ritholtz.com/blog/2009/07/chicago-manufacturing-pmi/

  43. Marcus Aurelius says:

    Pat G:

    Hell, it took TPTB 6 quarters to admit recession.

  44. cvienne says:

    @Pat G

    “Preliminary Depression”…Remember, the numbers are just the first estimates…Once they realize the implications, they’re sure to find a way to squeeze it to ZERO to avoid the stigma…

  45. Pat G. says:

    @MA

    The USG won’t come out and officially declare it a depression although were there, especially after all the bailout money they’ve spent in a pretext to stop us from getting there in the first place.

    @cvienne

    You’re probably right but we all know better.

  46. I-Man says:

    Looks like we got the 50 period MA and 20 period MA sandwich going on on the SPX 15 min chart…

    Wonder which one will win out?

    I say if the 20 becomes resistance again and and we break support of the 50, we see 960 again rather quickly.

  47. I-Man says:

    I might add, a move down to 960 from here corresponds rather nicely with a touch of the 20 day SMA on the daily charts…

  48. jc says:

    Consumer spending can only go one way with the number of jobs being lost and people running out of benefits & extensions.

    I believe the gov and MSM have beenspinning the numbers to goose consumer confidence to slow down consumer savings. Thats how I see it from my grassy knoll

  49. cvienne says:

    @I-Man

    I don’t know I-Man

    that little dipsy doodle in the SPX, to me, was a seek & destroy for stops…Support came in off a trendline off of last Fridays (965) low…

    We may now be in a triangulation between that, and yesterdays high…It’s almost a perfect equilateral…

  50. Onlooker from Troy says:

    To borrow a reader comment from elsewhere in the blogosphere:
    “GDP doesn’t tell me much about whether the economy is structured properly. For instance, if we all borrowed a boatload of money and spent it on domestically-produced flat screens, car leases and Mickey Ds, GDP would flash: great!

    But if we stayed out of debt and saved, with such savings being lent to borrowers who only invested in high-IRR-projects, then GDP would flash: danger!”

    GDP is a very faulty way to assess the health of the economy, especially when used in isolation. which is what is done all too often. If half the country burned down and we had to rebuild, GDP would be on fire. But what would it really say about our economic health? Especially if we had to borrow yet more money to do so, building debt to yet more dangerous and onerous levels. A loose yet apt analogy I think, is to companies’ operating earnings, not as-reported. And completing ignoring the balance sheet. Absurd.

  51. Pat G. says:

    @jc

    They were all abuzz about the continuing claims number falling the other day but what they failed to point out (the obvious); was that number’s decline was due to unemployment beneficiaries exhausting their benefits. Now, what do they turn to in order to support themselves? Crime?

  52. Marcus Aurelius says:

    franklin411 Says:

    “Boeing borrowing to finance massive bonuses for its CEOs.”
    ____________

    Boeing? How about the banks? You miss the point.

  53. karen says:

    hope you are all sitting down, i bot qid and dxd..

  54. call me ahab says:

    “How do you know that traders didn’t anticipate this robust GDP number?”

    gee can’t wait until we get to the more robust number of ZERO- good times will be here again-

    franklin- sometimes I think you are a put-on- a class project of the comedy club at some University-providing never-ending laughter to the perpetrators

  55. jc says:

    Pat G The MSM excels in finding the pearl in the swill,even if the pearl is faux. Gary Shilling sums it up very well how can consumer spending be anything but down with all the lost jobs and increasing consumer savings?

  56. cvienne says:

    @I-Man

    FWIW – That little dip down in the SPX this morning created an interesting triangle…

    - lower border from Last Friday lows (thru the low printed this AM)
    - higher (yesterday’s high thru yesterdays retest)

    The “point” of that triangle would expire Monday at 1:30PM…

    So I expect a bounce around today between 983 – 993 (and closing)…If none of those boundaries are breached, the market may gap one way or the other on the Monday open…My preliminary expectations would be DOWN, however, I believe SUPPORT would then come in at around 970 (with first support around 972)…

    If I were a trader, I think I might be inclined to buy that number (because I still think we need to go visit 1008)…and my dates for that are around August 11th or 12th…

  57. franklin411 says:

    @Marcus
    The bank bonuses are a legacy of the past administration–like Iraq and Afghanistan. They were not part of the President’s agenda.

  58. call me ahab says:

    the new Karen = big growling bear?

  59. manhattanguy says:

    Karen – that’s the right move.

    I read on Blogosphere that GDP was really -1.9%? They shoved -.9% into the first qtr. to keep us from freaking out.

  60. HCF says:

    @franklin411:
    >GDP contracted at -5.5% in the prior quarter. This quarter it contracted -1% — 5.5 times better than the prior quarter

    Less bad != good

    Let’s say you get in a massive car accident and lose 5.5 pints of blood (and somehow don’t die right away). On the way to the hospital, you lose another pint of blood. Is this positive news? NO!

    I agree that less bad is better than horrendous, but we need context on everything. The economy as a whole is still going in the negative direction: GDP, home prices, car sales, unemployment. I’m certainly not saying the economy will never recover (because it certainly will), just that the positive spin on not so great numbers is propaganda driven.

    The first step to recovery is admitting that we have a problem!

    HCF

  61. I-Man says:

    LOL Mistress…

    I am sitting down. I should be sitting on my hands… because I said I would sit tight today… but I just took a little bite of SPXU… dont plan on holding it over the weekend either.

    Heck, the way my stops are on these day trades, I might only have it for another 5 minutes.

  62. DeDude says:

    >>The reality is that the bulls have been right and the bears have been wrong. None of the bearish bogeymen have turned out to be real: the 20% unemployment number, the double dip, hyperinflation, the “bond vigilantes,” etc… have all proven to have existed only in the paranoid minds of the pessimists<<

    Although I think we can call off the 20% unemployment prediction with high certainty, the double dip and hyperinflation is still realistic. We are still not having any signs of robust growth driven by sustainable consumption based on real growth in income for the consumer class.

  63. Pat G. says:

    @jc

    Agree totally. And to think I thought the Spin-Doctors were a group of musicians.

    @manhattanguy

    Are you suggesting that our beloved USG would manipulate the GDP number? lol

  64. call me ahab says:

    dedude-

    by 1980′s metrics- we are already at 17% unemployment-

    maybe if that keep manipulating how its factored- we will have full employment at all times- just ignore the vagrants squatting in empty homes

  65. jc says:

    Any bets the 2Q GDP gets revised down like the 1Q and 2008? Both revised down a lot more that the 2Q “surprised” to the upside.

    After a few Qs of imaginary improving unemployment, home sales and GDP we’ll be swamped by waves of reality

  66. Pat G. says:

    @ahab

    But it looks “less bad” at 9.5%.

  67. Stuart says:

    I’ve read alot of commentaries this a.m. and most seem have a strong “odor” that this is just another inventory re-balancing type of recession. It is not. This is a post bubble credit contraction and it will last for several more years until the credit binge is flushed out and sustainable consumption and production are again in balance.

    P.S. thank god for strong govt spending. Little wonder why all the attention paid to Treasury auctions.

  68. manhattanguy says:

    @jc
    “Any bets the 2Q GDP gets revised down like the 1Q and 2008″
    You can bet your home on that.

  69. DeDude says:

    dead hobo @ 8:41

    Since when did GS become that oracle of eternal wisdom and knowledge of the future. Should we try to go back and look at some of the predictions that they made about the stock marked 1-2 years ago? You have to wait for the actual monthly sales of July and August to come out before you can give any estimate of the effects of this program.

  70. Onlooker from Troy says:

    karen

    Just a nibble, or a sizable bite? Just wonderin’

    I’m so tempted, but am a bit averse yet. I know, that’s what getting burned by going too early does to you; makes you skittish just when you should be more aggressive.

    I thought we’d see much more reaction to the upside by the BTE GDP number. It is doing that sideways thing now though, which has presaged more upside all too many times recently.

  71. DeDude says:

    call me ahab;

    I think franklin was talking about people predicting a U3 of 20%, that is at least what I am using when I predict that we will hit 11% this year and top out at 12% next year.

  72. karen says:

    onlooker, 1k shares each, so that would be a nibble. i’m more interested it dto at the moment..

  73. manhattanguy says:

    Heard on BBC Radio, European unemployment reached 9.4 percent in June. They expect 12% in 2010. Worst affected is Spain with 18.1%.

  74. going broke says:

    I-Man… widen your stops!

    my stop for BGZ is 26.70, might hold until Mon-Tue. They’re sure trying to keep this pig of a market elevated on the less bad news is good news! SPX has already printed the HOD for today IMO.

  75. call me ahab says:

    going broke-

    tough taking investment advice from a dude called “going broke”- LOL

    j/k

  76. Wes Schott says:

    …only 12 pts to 1000 on sp500

  77. I-Man says:

    Sup with gold?

  78. Andy T says:

    Whoa. Someone released the Euro bulls today….screaming. You would have to consider a break of 1.433 a “breakout”….it’s possible the “fourth wave” we’ve been watching actually concluded this morning as this is the sort of “thrust” one normally associates with completing a triangle….very overbot at this moment, and of course it’s all got a weird feel to it, but you have to respect that kind of sharp move higher….

  79. I-Man says:

    Am I the only one getting a little tired of triangle patterns?

  80. Thor says:

    1,000 shares of DTO is a “nibble”?

  81. karen says:

    i said 1k shares each of dxd and qid.. my dto position is a secret… lol

  82. Thor says:

    Karen – clearly I know almost nothing about the stock market, and clearly I haven’t had my second cup of coffee, please ignore anything you see from me in the future before 10:00am ;-)

  83. karen says:

    Thor, if you ignore anything you see from me after 5, i’ll ignore anything i see from you before 10.. try starbucks french roast beans in a french press, 3/4 cup beans to one cup of coffee.. you’ll wake up fine.

  84. emmanuel117 says:

    Tresuries are up, $ down? Makes no sense…

  85. JustinTheSkeptic says:

    Deadhobo, on t-bill rates. My guess would be that if what you mentioned did happen, the U.S. would be the beneficary of a “flight to safety” from everyone around the world, and rates would go down.

  86. Andy T says:

    I-Man Says:
    July 31st, 2009 at 12:14 pm
    Am I the only one getting a little tired of triangle patterns?
    ~~~~~~~~~~~~~~

    Triangle patterns of all shapes and forms are by far the most common set up for markets last few years….contracting and expanding triangles are becoming more and more common ….not sure what’s driving that phenomenon….perhaps it’s the markets way of making things more difficult….

  87. karen says:

    oh my.. i don’t think usd holders like the ramifications of our fed, treasury, and congress… but why are yields down? bond prices up and dollar down.. hate to see what the dollar would look like if bonds sold off as well..

  88. Onlooker from Troy says:

    Interesting that the stock market didn’t even flinch up with the drop in the dollar. Divergence? Exhaustion?

    Or just delayed reaction yet to come? Bizarro world continues.

    But hey, that homebuilder index is on fire today!

  89. The comments on this site used to be useful. Now comments are littered with slap fights between Franklin and his posse of haters. If I were Barry I would ban the lot of you for constantly ruining the comments.

  90. I-Man says:

    Thanks for the observations AT…

    I was wondering if they had a certain prevalence at different wave points… but it sounds like more of a secular thing from the way you put it.

  91. Andy T says:

    Onlooker from Troy Says:
    July 31st, 2009 at 12:33 pm
    Interesting that the stock market didn’t even flinch up with the drop in the dollar. Divergence? Exhaustion?~~~~~~~~~~~~~~~~~~~~~~~~

    The divergence is fascinating indeed!

    At some point that phenomenon of DX getting trashed and stocks going up had to diverge….at some point the game had to run its course…in order to screw up the computer based strategies based on the Euro/SP500 correlation….it’ll be interesting to see if this is the beginning of the end to that one….

  92. manhattanguy says:

    Dollar collapse is helping rally in Oil. We have a new lows in UUP for the year.

    “Interesting that the stock market didn’t even flinch up with the drop in the dollar. Divergence? Exhaustion?”

    I believe Distribution started yesterday.

  93. dead hobo says:

    Andy T Says:
    July 31st, 2009 at 12:42 pm

    .at some point the game had to run its course…in order to screw up the computer based strategies based on the Euro/SP500 correlation….it’ll be interesting to see if this is the beginning of the end to that one….

    reply:
    ————-
    I believe you are wrong, sir, about the value of the dollar messing up a HFT algo. I doubt any algo wonders about the dollar. Ever. All these programs want to do is sell to you at the highest price and buy at the lowest price, preferable both sides within a couple of seconds or less.

    It’s all momentum driven trading, a fraction of a second at a time. Behavioral fiance is far far far more relevant than economics. Algos are written by programmers, none of which are really very smart outside of programming. Ask one about economics and you will get either a blank face or an angry and dismissive response, I believe. Programmers are highly focused and very controlling people. Economics doesn’t matter. It’s all about the increment.

  94. Christopher says:

    karen Says:
    July 31st, 2009 at 10:50 am

    hope you are all sitting down, i bot qid and dxd..
    ————————————————————-

    “You don’t know the power of the dark side!”
    Darth Vader

  95. Onlooker from Troy says:

    Interesting stuff re: liquidity flows:

    http://www.stocktiming.com/Friday-DailyMarketUpdate.htm

    It’s clearly a factor, but I’m really not sure how to use it though, as it seems to be very much a coincidental indicator. I suppose if you saw a divergence it would be telling.

  96. Onlooker from Troy says:

    MRegan

    Just another ponzi-ish set up. With the USG as the ultimate back stop. Moral hazard galore.

  97. karen says:

    Capco is scaring me.. as is the XHB.. how much more stupid can the market get? or is it just a function of too many dollars? i do think we will see further distribution and smart money flight to safety today.. lots of data coming out next week..

  98. AmenRa says:

    Next time you hear Obama speak, see if you can figure out the code word/phrase for “pump the market”.

    I’m still waiting to see if SPX takes out the low needed for a reversal in the daily trend. Still looks like a close above the 55ema on the weekly is in the cards (for now). I’ve given up trying to out guess the market and just let the prices tell me where the market wants to go. Eventually the market will realize its error and correct. That day I’ll be “all in” :)