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Bullard: Forget about Q1 GDP report

  • Q1's 2.9% GDP decline is "giving me heartburn," says St. Louis Fed boss Jim Bullard in a TV appearance, but it's an aberration and doesn't seem to match up with other economic data out there.
  • Markets - currently predicting the first rate hike within a year - have it about right, says Bullard. The economy seems pretty good and inflation should be over 2% in 2015 - together, ripe conditions for tighter policy.
  • Short-duration Treasury ETFs: SHY, BIL, SHV, VGSH, SCHO, SST, TUZ, DTUL, DTUS
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Comments (18)
  • minecanary
    , contributor
    Comments (646) | Send Message
     
    Bad news for the bubble that isn't
    26 Jun 2014, 09:45 AM Reply Like
  • David at Imperial Beach
    , contributor
    Comments (4375) | Send Message
     
    Probably not the aberration the Fed thinks it is. It was mostly a decline in the service sector, that some say is reduced spending on healthcare. That would make the culprit Obamacare and the reduced spending is permanent, a reduction in spending on health insurance. And most of that reduced spending is likely to be people who lost their old policy and couldn't afford one of the new policies, even with the subsidy.
    26 Jun 2014, 01:05 PM Reply Like
  • cjluthy
    , contributor
    Comments (15) | Send Message
     
    Or, newly insured people, instead of having to bear 100% of the (enormously overpriced) Hospital "Charge Master" prices for their healthcare, now only have to pay their (relatively small) monthly premium costs, along with their (relatively small) co-payments.

     

    In this scenario, a $200/month prescription very quickly goes to $10-$20, and a $50,000 procedure very quickly goes to $500 or less.

     

    Those kind of swings in "actual-to-the-consume... will put lots of dollars back in the hands of the people buying policies.

     

    Net Net.. We are talking about hospitals making less money. Patients beholden to those hospitals will be keeping more of their money.
    26 Jun 2014, 02:17 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9050) | Send Message
     
    Isn't that just wrong? Why should the poor and the middle class get to keep more money? Isn't that socialistic?
    26 Jun 2014, 02:21 PM Reply Like
  • th3decider
    , contributor
    Comments (406) | Send Message
     
    You guys have any facts to back up these claims or you just making this stuff up?

     

    You do realize your logic makes no sense right? If people really are spending less on healthcare, which gives them more pocket money to spend on other things, then this spending on other goods and services would already be captured in GDP and it would even out. The only reason it wouldnt is if: 1) people are tucking away and saving this difference, but the savings rate has barely budged, so this isnt the case, or 2) like many people have pointed our economy really is contracting.
    26 Jun 2014, 02:30 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9050) | Send Message
     
    Are we doomed then? Is it time to buy gold?
    26 Jun 2014, 06:55 PM Reply Like
  • Robert Duval
    , contributor
    Comments (6212) | Send Message
     
    MI,

     

    I double - dare you to short gold here.....
    26 Jun 2014, 09:21 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9050) | Send Message
     
    Did we have a similar exchange last year? Do you remember what happened after that?

     

    I won't short gold here. There is much more money shorting volatility.
    27 Jun 2014, 12:16 AM Reply Like
  • bbro
    , contributor
    Comments (10426) | Send Message
     
    Make it a double dog dare....
    27 Jun 2014, 12:26 AM Reply Like
  • 6151621
    , contributor
    Comments (1180) | Send Message
     
    Who will win? The investor or the trader? Of course both could lose if macro does work in the current CB ruled markets?!
    28 Jun 2014, 12:59 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9050) | Send Message
     
    Trading is a surefire way of losing money.
    28 Jun 2014, 01:53 AM Reply Like
  • th3decider
    , contributor
    Comments (406) | Send Message
     
    Lol im sure if it was a 2.9% increase that wouldnt have been an "aberration".

     

    These guys will think of anything to justify their fantasy view of the world...
    26 Jun 2014, 09:52 AM Reply Like
  • mobyss
    , contributor
    Comments (2189) | Send Message
     
    Higher inflation is "noise", lower inflation is a crystal-clear signal (to continue QE/ZIRP).
    26 Jun 2014, 12:32 PM Reply Like
  • mrdirt
    , contributor
    Comments (636) | Send Message
     
    Remember back in 2007 and early 2008. The Fed said we wouldnt go into a recession.
    26 Jun 2014, 11:03 AM Reply Like
  • 6151621
    , contributor
    Comments (1180) | Send Message
     
    Yes, I think mrdirt has got this right. We can't really expect (based on FED historical performance) of seeing the next crash in the future when they are often wrong about where the economy is in the present.
    26 Jun 2014, 11:46 AM Reply Like
  • omarbradley
    , contributor
    Comments (966) | Send Message
     
    A reasonable man would wait for the 2nd quarter figures before making such claims. This is two years in a row that the first quarter has "shocked" to the downside. Clearly there is a problem with the data...not with Fed policy.

     

    the unwind will continue apace. the dual mandate will be upheld. i see nothing by these PUBLIC comments to change that now. this recession was not the fault of the American Middle Class...nor of the taxpayer.
    26 Jun 2014, 01:28 PM Reply Like
  • th3decider
    , contributor
    Comments (406) | Send Message
     
    "Clearly there is a problem with the data...not with Fed policy."

     

    Oh yes,, of course. When the data does not support your policy that means there is a problem with the data. But of course the data is always 100% reliable when it supports your policy right?
    26 Jun 2014, 02:32 PM Reply Like
  • 6151621
    , contributor
    Comments (1180) | Send Message
     
    @th3decider: all you need to do is change how you gather the data to make it fit the policy you want! They don't need to change the policy.

     

    (Of course, fudging the inputs may seem wrong but it's just because the world changes so they need to massage the data, a little.)
    28 Jun 2014, 01:01 AM Reply Like
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