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Thursday, September 27, 2012

The Fed Can't Save the GDP Numbers

Data released today shows that the Q2 Final GDP fell short of meeting expectations as it came in at 1.3% versus 1.7%.

The graph below shows that it's generally been in decline from its peak in December 2003. For the past three years, it's been well below the average seen from 2004 to 2008...proof that the Fed has kept the markets artificially inflated since they are currently trading back up at 2008 levels, or much higher as is the case in the Nasdaq 100 Index, without the fundamentals to support current prices or continued growth expectations at the same pace, particularly without the assistance of joint political economic efforts/policies, as has been the case to date.

Precisely, how the Fed's latest QE program of buying Mortgage-Backed Securities will help this situation any time soon, if at all, leaves me baffled and wondering where the markets are headed.

 
 
 
Durable Goods Orders plunged dramatically from 3.3% to -13.2%, while Core Durable Goods Orders dropped from -1.3% to -1.6%, as shown on the graphs below...data which confirms a slowing of demand, not an expansion.
 


***It seems fitting that this data is reported in this, my 666th blog post!