GDP number doesn’t pass the smell test, ‘Expert’ says

I just couldn’t let this one go after researching varying perspectives on Q1 GDP.  Joshual Feinman, deemed ‘Expert’ by major financial media took spin to a new level.  Mr. Feinman, of Deutsch Asset and Wealth Management, claims, in an interview on CNBC¹, that the Q1 train wreck of a GDP number in its final revision doesn’t pass the smell test (coming in at -2.9%).  Quite literally I don’t even know what that means.  Does he believe the US BEA is fudging the GDP figure downward to lows not seen since Q1 2009, the bottom of the great recession?²

Mr. Feinman goes on to suggest the GDP figure is out of sync with other economic indicators.  Now I’m not sure if anyone has mentioned this to Mr. Feinman but the GDP is considered the representative number of the aggregate domestic economy here in the US.  It’s like saying the thermometer seems to be out of sync with other temperature indicators.  Ok, well then you must be saying you believe the thermometer is wrong i.e. the GDP figure released is incorrect.  Is that what Mr. Feinman is saying?  I don’t believe so.  I truly believe he doesn’t know what he is saying.  I haven’t seen such a blatant display of utter ridiculousness in quite some time.  Even for the pundits on television this was a spectacle.  Joshual goes further to say we just need to put the figure behind us (given it doesn’t pass the smell test according to him) and move forward.

Finally when questioned on slack in the economy and rising oil prices which have always been a significant drag on economic growth Mr. Feinman claims the solution is “Gotta go stronger longer”.  And do I hear an Amen?!  This is Deutsche Asset & Wealth Management’s response to collapsing GDP figure for Q1 and major headwinds showing for Q2?  I can only assume he means continue pumping printed money into the system to keep asset prices, specifically market asset prices moving higher.  Now in fairness to our seemingly confused asset and wealth manager he is what he is.  Namely, his job is very easy when markets have no downside risk.  His clients get wealthier and he gets wealthier off the backs of their good fortunes.

I suppose my point to this, let’s call it a rant, is to highlight that you simply cannot trust what comes from the so called ‘experts’ on television.  I caution all of you to think critically about the analysis you receive.  Think about it, understand it and make up your own minds.

  1. http://www.cnbc.com/id/101788376
  2. http://bea.gov/iTable/iTable.cfm?ReqID=9&step=1#reqid=9&step=3&isuri=1&904=2009&903=1&906=q&905=2014&910=x&911=0