I’ve had my fill of the Fiat Republic’s representatives defending another sequential slowdown in US GDP growth for today. The math doesn’t lie; politicians do. In the aftermath of the most government “stimulus” spending in the last 13,000 years of mankind, US GDP growth has been more than CUT IN HALF in less than 6 months down to +2.4%.
The worst part about this morning’s Q2 GDP report is how much more realistic it makes our Q3 estimate of +1.7%. Consensus is still double our estimate. Once earning’s season is over and the he said/she said about European stress tests subsides, the market will once again be focused on what we call Macro Time.
There are very few leading indicators that are not flashing bearish for US economic growth on an intermediate term TREND basis. Three of the most important ones (US Treasuries, US Stocks, and US Currency) look flat out frightening on a 3 month basis:
- US Treasury short term yields are hitting record lows today (with 2-year yields 0.55%)
- US stocks remain well below our Bear Market Macro intermediate term TREND line of 1144 (TRADE line support = 1076)
- US Currency is down for the 8th consecutive week and looks as depressing as Paul Krugman.
Don’t worry though – President Obama is speaking at a Chrysler plant this morning saying “I’m just doing the right thing.”
So much for Transparency, Accountability, and Trust.
Keith R. McCullough
Chief Executive Officer