Well, the numbers for 14Q1 are in, and again they are neither pretty nor what that dismal cohort representing the 'dismal science’ predicted. The nation’s economic mavens – those whose opinions are at least counted – said that first quarter GDP would be up 0.1%. Not even close. The real news is that the economy tanked at -2.9%, and will be unbelievably lucky to eke out a positive number for all of CY2014.
All this occurred as the Obama administration was trying to get some happy dancing going with a conference of business leaders who expect to game the climate change hysteria. Leading the 76 trombones is millionaire Tom Steyer who made his millions in his since divested hedge fund that invested hundreds of millions in fossil fuels. Today he argues that no one else should have those same opportunities. Meanwhile, the Obama lackeys continue shouting their huzzahs to a non-existent recovery when instead they should be singing its requiem. (RR readers still confused on the notion of a recovery should review ‘The Recovery Rigmarole’.)
But let’s get back to that sorry science and their acolytes, the economists. These guys have no clue as to what is in the ‘black box’ that represents the nation’s economic system. All they can do is access a dodgy Ouija board based on various cobbled regression functions that try to masquerade as a true transfer functions of the economy. (The technical reader will know that understanding the real transfer function means understanding the sub-processes of the economy and their integration contained in the black box which today’s economists can only view in terms of its inputs and outputs over arbitrarily selected time windows. Given interest, I will expand. But I digress.) In any event, neither the politicians nor the media (lamestream and legitimate) understand this little nuance, so they keep citing the quantitative economists as if they really knew something (also see N. Taleb).
Nevertheless, the stock markets keep going up for the reasons previously explained here – the dismal economic news means that the Fed will keep interests rates low through the printing of baseless money and lending it to the Treasury. The economy keeps getting it in the shorts from Team Obama from the constant avalanche of business destroying regulations and tax hikes, the most egregious and unreported one being the implicit hike delivered by Obamacare which analysts have computed to be the 3rd highest tax hike since 1946.
So what RR has long advised its readers as the ongoing Depression2 continues to be vindicated by the non-stop increases in taxes, regulations, spending, and debt. Every clever investor in the market is betting that he can bail out before it all hits the fan. Again, I offer this observation in the continuance of RR’s unsurpassed record of excellence in forecasting ;-)