Land of Oz

Land of Oz
ruby-slippers-wand

Friday the preliminary look at Q3 GDP came out and "beat" expectations of a 1.8% print, with a 2.0% reading. That seemingly sounds positive, but since its “election season,” we need to delve deeper into the data to get the real story.
When you pull back the curtain, you of course see Mr. Wizzard manipulating the numbers. Because of the 2.02% annualized increase in GDP, over one third, or 0.71 %( compared to a deduction of -0.14% in Q2), was contributed by "Government Consumption." This was the biggest rise in government spending in 3 years, and only the first contribution by Uncle Sam to its own GDP print since Q2 2010.
So in much the same way as the September jobs print soared courtesy of government employee hiring, this same government is padding its own numbers to make itself look better. The real question is what the second and third Q3 GDP revisions will show, which both come, luckily, after the election. Recall that Q2 GDP initially came out at 1.5%, then was revised to 1.7%, until finally coming to rest at 1.25%.
It’s Oz economics. We put on the ruby slippers, click our heels three times and say, “There’s no place like home.” Of course, home is underwater from bad loans, but that’s another story for another day.

Trade well and follow the trend, not the so-called “experts.”
Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banking mafia.
Futures Data
Value Areas:
ES 1409.00 / 1402.00
POC... 1407.00
YM 13057 / 13005
NQ 2663.25 / 2641.75
Best Trades to you,
Larry Levin
Founder & President- Trading Advantage
TradingAdvantageCom