Insiderman

Commerce Department's Revised GDP Shows a Delineated Story for the Recession

I like the revisions BEA did to the GDP calculation methodology; it will do a lot to mitigate the positive GDP impact of natural disasters and better reflect current activity. They'll go back and restate prior periods, which can be annoying if you have older material. It happens every 10 years, so it's no big deal.

What I do find interesting is that the author of this post didn't say anything about the composition of GDP. EVERY category was down big time except government spending, which increased 10%. Essentially, our private sector economy actually got WAY worse, but the Feds pumped us up.

No one wants to make a move when the fiat power of the U.S. government trashes the risk and reward metrics for a market.

Plus, we still have Maiden Lane coming due and a bunch of larger banks that will surely fail if Geithner doesn't get FDIC and OTS under the Fed. Then we have the Fed essentially printing money to help Goldman Sachs, JPM, BA, and the like prop up the equity market.

Sad times for free markets.