Gary Shilling: "Q2 GDP Was Closer To 1% Than To 3%. It Could Even Be A Negative Number"

Zero Hedge ^

[Perdogg]

This week, in the aftermath of the Q1 -2.9% GDP disaster, the biggest "non-recessionary" drop in 67 years which was blamed on harsh weather (because there have never been harsh winters in the past 67 years), we get the first glimpse of what Q2 GDP was in the US economy. It is expected to print just shy of 3%. However, one person disagrees: Gary Shilling believes that not only will Q2 GDP be closer to 1% than to 3%, there is a fairly good chance it could be negative, which of course would mean that the US economy has officially entered a recession.

Shilling's take:

Special Report: No Spring Thaw

The consensus of economists looks for second quarter real GDP growth, which will be released July 30, of 3% vs. the first quarter at annual rates. It believes the 2.9% drop in the first quarter was cold weather-driven, and a rebound in the second quarter is the prelude to 3%-plus growth in the second half of the year. As in the last several years, the herd is likely to be disappointed.

[expat_panama]

Zero Hedge is always wrong, right?

Golly it would sure be fun if "always wrong" was certain! 

Whether the first Q2 GDP comes out high and stocks surge or it's low and they tank, what's for sure is things are spooky and it's not the kind of environment I do well in.  Related: "Get ready for 48 hours — and a little more — of the most intense outpouring of information on the U.S. economy you’re likely to ever see." Market Watch

[Fresh Wind]

It is the two revisions afterward that will tell the story.

Yes, but the first number will be on the front pages along with glorious pictures of the King of Amerika, and the revisions will be on page 47 along with the foreclosure notices and yard sale ads.

[Mad Dawgg]

IIRC two quarters of negative GDP = [THIS POST HAS BEEN REDACTED BY THE NSA]

[Ouderkirk]

IT simply stunning that the enemy media spins this nonsense to protect Obastard.

The Economy suck, and it has been lousy since this POS was inaugurated. It hasn’t gotten better in any measurable way..it has stagnated and what is not becoming evident that it is slowly getting worse.

[ckilmer]

imho, oil/gas related economic activity will keep the economy from going negative. But that’s all happening mid continent —away from the coasts.

[servantboy777]

lol.......you bet’cha

[citizen]

From your link:

In any case, [this week or month] the Commerce Department is revising GDP data from the last three years....

So look for things to reportedly be better soon!

[Pagey]

I remember Trey Gowdy peppering Tim Geithner back in 2012 or so, asking him if this was the final request for a Debt Ceiling Increase---"If this were the last debt ceiling request you could ask for … the final one and you had to make it large enough for all current and future obligations, what would the request need to be?” and Tim Rephrases the question. Trey says 20 Trillion? 50 Trillion? And Geithner comes back and says, "The Number would make you uncomfortable" and he very uncomfortably leans back in his chair.

3 minute Video here:

http://hotair.com/archives/2012/03/21/geithner-to-gowdy-if-treasury-could-ask-for-just-one-more-debt-ceiling-increase-the-amount-wed-request-would-make-you-uncomfortable/

[familyop]

"imho, oil/gas related economic activity will keep the economy from going negative. But that’s all happening mid continent —away from the coasts."

That's good to know, because demands might be higher in the near future. It might be a good idea for field managers and employees in northern and higher elevation areas to prepare for possibly greater cold fluctuations rougly between 3 and 9 years from now with further adjustments in clothing, equipment (e.g., propane pressure drops, bury-able tanks or heat tape blankets, antifreeze mix better than 50/50 and lighter oil in vehicles) and heating systems (polyisocyanurate insulation only on outsides of travel trailers--not insides, actively vented catalytic heaters with thermostats,...). Those measures might cut future costs and raise morale whether we see unusual weather events or not.

[ckilmer]

for possibly greater cold fluctuations rougly between 3 and 9 years from now with further adjustments in clothing,
..................
US oil production this year and next will go up a million barrels@ day and so far predictions are for 500k barrel @ day increases for 2016-2020. I don’t think this will break the price of oil because demand for oil is high and going higher overseas. The USA and Canada are the only producers increasing oil production. Everywhere else in the world is flat to down.

but sometime after 2020 likely increasing use of natural gas trains trucks cars and buildings —plus electric cars if Tesla forces the worlds car companies to shift production to electric cars as seems more and more likely given the intense talk in the automobile industry — ... these will suck out the demand for oil so that by 2030 oil prices will be about 1/3 of what they are today. or about $35@ barrel which on a btu basis is where natural gas and coal are today — and where oil was from 1940-1970 ... priced in 2014 dollars.

[familyop]

"...plus electric cars if Tesla forces the worlds car companies to shift production to electric cars as seems more and more likely given the intense talk in the automobile industry..."

That will be great with lithium-ion batteries for areas with year-round temperatures between 14 and 86, Fahrenheit or with needed additional equipment. Chinese battery charging, heating and cooling equipment investments should do very well.

I see temperatures down to the minus-30s, Fahrenheit, and winds up to about 110 mph during winters, but like most lowtechs, I'll continue to have good transportation regardless of bipartisan, socialist, regulatory bowel movements.

[ckilmer]

That will be great with lithium-ion batteries for areas with year-round temperatures between 14 and 86, Fahrenheit or with needed additional equipment. Chinese battery charging, heating and cooling equipment investments should do very well.
...............
True for now. I would not want to be driving a Tesla in the Rockies during the winter. Likely that’s why the Tesla plant is in Balmy California. Still, there is a huge section of the USA that has year round temperatures between 14 & 86 degrees. When a decent percentage of their driving public switches to electric cars—the price of gasoline all over the country — including the cold places goes down.

I don’t follow closely the battery/solar/electric car companies so I wouldn’t be comfortable investing in them. Still anyone can see from a distance that a lot of these companies stock prices are rising including Tesla. Tesla for its part just signed an agreement with Panasonic a Japanese company to get financing from them for 200 million dollars for the construction of a new battery plant which promises to bring down the cost of Teslas. The plant’s total costs are said to be in the 5 billion dollar range. I don’t know where the rest of Tesla’s financing is going to come from.

[expat_panama]

Commerce Department is revising GDP data from the last three years....  So look for things to reportedly be better soon!

Huh, I missed that.  Thanks!  Originally the GDP was reported to have increased in 2008, but within a year after the election the left announced that the recession began in 2007 and they revised the 2008 GDP to show a drop.  Now I see they've even revised the 2007 GDP to show a decrease. 

So even if the leftists can't make today better, at least they can make yesterday worse.

[familyop]

"Likely that’s why the Tesla plant is in Balmy California. Still, there is a huge section of the USA that has year round temperatures between 14 & 86 degrees. When a decent percentage of their driving public switches to electric cars—the price of gasoline all over the country — including the cold places goes down."

Very true. If I were in a flatter, more temperate place, I'd surely consider it. Up here, individuals could go to natural gas where available (outside of the more intense NIMBY areas, where natural gas drilling and pipelines have been prohibited or encumbered), wood/waste gasification or other choices to lower costs, if such builds and rebuilds become all that necessary (agriculture, steel work and racing in my past).