Thursday, April 28, 2016


GDP for the first quarter was released today. Growth of 0.05%.  That's really bad...really bad.  There was not a single item in the report that could be seized upon to create confidence or enthusiasm.  What does one do then?  Well, you make one up as one of the brilliant talking heads did this morning which qualifies as the Best of the Month.

"I really do question some of these numbers because the jobs reports have been so strong I can't see how the GDP number can be so weak.  I'm sure we will find seasonal adjustments in April."

Well, let me try to help out there, my son:  THE JOB NUMBERS MAY BE (ARE) CRAP!!! THEY'RE COOKED!

There, wasn't that useful?  Always there when you need me.

Of course what this does is to lay ruin to a rate hike in June which would have usually been the cause for great joy on the Street, but Carl Icahn came down from the mountain to announce he no longer owns Apple which tanked the stock, tanked tech and sent the DOW down 210.  Such is our world.  A 900 year old man sells one stock and trillions are lost in five hours.  Oh yeah, the Bank of Japan put on a hell of a head fake and did absolutely nothing which sent the Yen soaring, and over the sounds of positions in FX being unwound it was almost impossible to hear the sage explanations as to why this unexpected event had occurred from those who had been squeezed shorter than a Japanese midget.  Methinks there might have been a small reassessment at work along the lines of "Let's stop hitting ourselves in the head.  It might not hurt if we stop."  Or, "Maybe Abe-nomics was wrong."  Then again, what do I know.

Well, that's not true: I know this.  If there isn't a dramatic improvement in the economy in the next quarter, this election in the U.S. is going to take on a far different complexion and (hopefully) that will result in a meaningful discussion of what are future economic policies will be rather than the electioneering b.s. one usually gets.  As the intelligent side of the Clinton family once put it, "It's the economy, stupid." and that will never be more true than in this election year.  One lives in joyful hope at least.  And for the perfect segue in reverse: part of that discussion had better be what is the future of the American banking system which we touched upon yesterday where the conclusion may hopefully be reached that the Volkswagen full of clowns overseeing this industry gets a grip on what produces economic growth and success.  It is not a gaggle of hedge fund managers, "wealth management" practitioners who dabble in capital distribution on the side or governmental agencies that pick winners and losers based on political preferences.  0.05% ain't gonna get it done, and waiting for the seasonal adjustments isn't going to either.

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