muses of the moment

December 22, 2012

Real Stats from John Williams from shadowstats.com

John Williams released his latest commentary. Here is the summary, you pay for the detail:

– GDP Upside Revision Was In Health Care (and Bad Deflation of Same)
– GDI (GDP Equivalent) Annualized Third-Quarter Gain of 1.36%, Followed Annualized Second-Quarter Contraction of 0.72%
– Weaker November Housing Starts Reflected Mixed Storm Effects, But Sharp Downside Revisions Were Pre-Hurricane
– Fed’s Inflation Target Is Just In-House Wishful Guessing
– Despite Boost from Hurricane, Durable Goods Orders Remained in Recession

Groovygirl can not turn on financial TV without hearing about a 2-3% increase in GDP. But the revisions from past quarters keep getting lower and lower. And we never hear about that on TV or the financial media. You have to dig around on the internet for that info. With these revisions, we are not in a recovery.

GG didn’t think about the false uptick in GDP that the new heath care law might create. But Supreme Court said it was a “tax”. But gg thinks it will be a wash. All the money that people have to spend on the “tax”, they will not spend on health care services or their own health. It only works if wages increase. Same with private businesses. And if they are counting on government spending on health care to make up the increase, it is again a wash. Government gets their money from taxes. It’s all a money shell game.

The Banking System has a 2% GDP tolerance level below which they feel the pressure of a 2008 crisis again. They are legally doing alot of creative accounting to hold their own during this “recovery”. It can not last forever.

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