You probably remember when the advanced GDP report was released on October 29th and the number beat even the most optimistic estimates.
All three major indices surged higher following reports that GDP grew 3.5% in the third quarter. That was better than the 3.2% rate economists were expecting.
Bonddad crowed about it. Stocks show up.
Can you imagine what would have happened if the GDP number instead of beating estimates by 0.3% it missed the mark by a full percentage? Well, that is exactly what really happened.
Gross domestic product, the broadest measure of the nation's economic activity, grew at an annual rate of only 2.2% in the three months ending in September.
Can you imagine how much the stock market would have dropped if the real number was reported first, instead of the incorrect number? Even Goldman Sachs' Edward F. McKelvey admits that the degree of revision is unusual.
This was a much larger than normal revision for the third pass on a given quarter, knocking what once was a fairly robust 3.5% bounce down to a mediocre 2.2% (from 2.8% prior to this revision)....The third cut on given quarter does not usually produce much of a change in the growth estimate.
Bonddad hasn't commented on the downward revised number, although he still believes that people skeptical of the government's headline economic numbers are hysterical.