January 29, 2016

AP: 8 Smoking Guns Later, Hillary Still ‘Will Not Be Charged,’ Per ‘Experts’

This afternoon, Catherine Herridge at Fox News reported that “the intelligence community has deemed some of Hillary Clinton’s emails ‘too damaging’ to national security to release under any circumstances.”

This eighth “smoking gun” — on top of the seven an Investor’s Business Daily editorial identified last week — wasn’t enough to move the Associated Press Bradley Klapper from the AP’s default position virtually since Mrs. Clinton’s private email server was discovered, naturally referencing unidentified “independent experts,” namely that “it’s unlikely Clinton will be charged with wrongdoing.”


4Q15 Gross Domestic Product, 1st (Advance) Reading (012916): An Annualized 0.7 Percent; Negative Inventory Effect Far Lower Than Predicted; Feb. and March Revisions Going Into Contraction Is a Distinct Possibility

Filed under: Economy,Taxes & Government — Tom @ 7:15 am


There are so many reasons in the hard data coming from Uncle Sam and others during the past several months why today’s report should be worse than the consensus predictions. But it has all seemed to come down to consumption and inventory changes with GDP in recent quarters, so it’s hard to bet against the consensus predictions. One would think that if there’s a surprise, it would almost have to be to the downside. But again, consumption uber alles.

The report will be here at 8:30 a.m.

HERE IT IS (full text version):

Real gross domestic product — the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes — increased at an annual rate of 0.7 percent in the fourth quarter of 2015, according to the “advance” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 2.0 percent.

The Bureau emphasized that the fourth-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 4 and “Comparisons of Revisions to GDP” on page 5). The “second” estimate for the fourth quarter, based on more complete data, will be released on February 26, 2016.

The increase in real GDP in the fourth quarter primarily reflected positive contributions from personal consumption expenditures (PCE), residential fixed investment, and federal government spending that were partly offset by negative contributions from private inventory investment, exports, and nonresidential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

The deceleration in real GDP in the fourth quarter primarily reflected a deceleration in PCE and downturns in nonresidential fixed investment, in exports, and in state and local government spending that were partly offset by a smaller decrease in private inventory investment, a deceleration in imports, and an acceleration in federal government spending.

Real gross domestic purchases — purchases by U.S. residents of goods and services wherever produced — increased 1.1 percent in the fourth quarter, compared with an increase of 2.2 percent in the third.

The final paragraph confirms the domestic slowdown the press, which has insisted on telling us that it’s all about what’s going on the in the rest of the world, has avoided reporting.

I’ll have the breakdown and comparisons to previous quarters shortly.

UPDATE: Here’s the breakdown:


Here’s the problem, identified in the following paragraph in Moody’s pre-release prediction yesterday, captured here, because it won’t remain for long:


As seen in the table above, inventories substracted only 0.45 points from GDP. As seen in the announcement, real final sales only rose 1.1 percent instead of 2.1 percent

If Moody’s is ultimately right about inventories — and there are others who have expected an inventory effect roughly as large or larger — then future revisions have a very high chance of pulling fourth-quarter GDP into negative territory.

(Specifically, if you take another 0.85 points away from today’s 0.7, based on a projected 1.3-point inventory hit instead of the currently reported -0.45, you get a negative 0.15 percent reading.)

Another factor which may pull revised GDP down is consumption, if retail sales, durable goods shipments, or wholesale sales in December get revised downward. Previous months’ originally reported retail sales have been revised downward in the following report on an almost regular basis.

But, as noted an inventory-related writedown of GDP seems very likely February or March. Today’s change is so small compared to expectations that one has to wonder if the government is delaying the bad news as long as it can.

Friday Off-Topic (Moderated) Open Thread (012916)

Filed under: Lucid Links — Tom @ 6:00 am

This open thread is meant for commenters to post on items either briefly noted below (if any) or otherwise not covered at this blog. Rules are here.

Positivity: See What Happened When a Man Who Appeared Homeless Walked Into a Chick-fil-A

Filed under: Positivity — Tom @ 5:55 am

From Murfreesboro, Tennessee, via the Daily Signal:

January 26, 2016

A Tennessee father is crediting Chick-fil-A with helping teach his daughter “life lessons” in his viral Facebook post about a store manager’s kindness toward a man in need.

“I love teaching my daughter life lessons, and I also love being there to watch other Christians teach her life lessons. Thank you, Chick-fil-A, for taking care of the latter today,” wrote Joey Mustain in a post that has been shared over 43,000 times as of Jan. 26.

Mustain said in the post that he was eating at a Chick-fil-A with his daughter Stella when a “homeless traveler” walked in to see if the store could spare “any extra food.” Though “people near him kept their distance,” Mustain said the man was kind and conversational as he waited to speak with the store manager.

Mustain said he and his daughter then witnessed what he described as a “beautiful scene” between the two men, who have yet to be identified.

“All I could pick up on of the conversation was the manager saying that he’d love to give him a full, warm meal—not just scraps or extras—, and the only thing he required was that the man let him pray with him,” wrote Mustain in the Facebook post.

After agreeing to this request, Mustain said “the manager stopped then and there, laid his hand on the man, and proceeded to pray.”

Mustain includes a picture in the post, in which the two men appear to bow their heads together.

“I heard love in that prayer. The homeless man wasn’t some untouchable stain on business. He was the reason that store opened its doors this morning (or any morning),” wrote Mustain.

After explaining to his daughter what was happening, Mustain said “she bowed her head, too.”

“I realized then and there that Chick-fil-A doesn’t simply do business for profits, they truly use business to minister. In a time when companies are trying to win in the market by neutralizing any possibility of offense, CFA is thriving because they unwaveringly cling to their principles and purpose,” said Mustain.

Mustain told The Daily Signal he hopes the attention from the Facebook post will help “bless” Chick-fil-A’s business. …

Go here for the rest of the story.