The market was up today despite the government lowering their forecast of Q2 GDP to 1.6%, down from the 2.4% they fabricated last month and likely up from the lower number they will make up next month in their "hold the shock and hope for no awe strategy." Growth in the economy has now slowed to the pace of a 150 year old tortoise with MS and a hella bad case of hemorrhoids. Most of the downward revision was caused by government analysts incorrectly assuming that companies added more inventories than they actually did which wasn't just a result of analysts being bad at their jobs but also being bad at math.
Inventories were originally reported to have grown by $75.7B, but actually only grew by $63.2B as iPhones and ramen noodles flew off the shelves while Gum Job Grannies stocks were not replenished. Some economists think the lower inventory number is a positive since if the economy grows, businesses will have to add workers to ramp up production, but then again some economists didn't think we were even going to have a housing bubble (cough Art Laffer cough), while others spend their days eating paste, licking windows, and worshipping at the altar of John Maynard Keynes, so who really cares what they say. Sure, if the economy grows inventories will build, even if they were $15B higher that would happen, so the fact that companies held down inventories either means all of their forecasting models are wrong (possible) or real growth isn't going to come back anytime soon. The good news Money McBags guesses is that economists guessed that the downward revision would be to 1.4% after they shook their Magic Eight Balls and asked if they'd marry Olivia Munn when they grew up, so GDP beating downwardly revised expectations is a positive.
Having a more positive affect on the market was Ben "Bennie B." Bernanke taking time out from his schvitz at the annual Fed Symposium and Rodeo to address the economy (and Money McBags is told he addressed the economy with a simple "hello" before inviting it back to his room to jiggle its balance sheet a bit). Bennie B. said that the FOMC “is prepared to provide additional monetary accommodation through unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly." He then said those unconventional measures could include shifting the composition of the Fed's bond portfolio, reducing the rate the Fed pays on bank reserves, or playing the fiddle on top of Capitol Hill while the economy burns, which wouldn't fix the economy but would soothe his withered nerves.
Bennie B. also opined that “Central bankers alone cannot solve the world’s economic problems," using the last four years of policy decisions as his case and point. Finally he said that deflation was not a significant risk and that "preconditions for a pickup of growth in 2011 appear to remain in place."
Now look, Money McBags doesn't want to drop a turd in everyone's punchbowl here (unless it's Gina Lynn's punchbowl and it's not a turd he is dropping), but what the fuck are "preconditions?" That sounds more like BS gobbeldygook than "misremembering," not having sexual relations, and "hiking the Appalachian Trail." You know what? Money Mcbags is exhibiting the preconditions for a threesome with Kate Bosworth and Natalie Portman as he knows their names and knows exactly what will fit where, but that sure as fuck doesn't mean it will happen (though if it does, Money McBags will keep it quiet for all of those involved, you hear that ladies? It's the promise of discretion). Anyway, the economy is showing some made up "preconditions" for growth a year from now (until it doesn't) which is about as reassuring as finding out your doctor got his degree from the University of Phoenix, so rally on, market, rally on.
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Disclosure: No positions