Jan 11

- So Which Is It: iPhone 5 Now Blamed For Q4 GDP Drop (ZeroHedge, Jan 11, 2013):

It was only a month ago when JPM’s Michael Feroli humorously predicted that Q4 GDP would be boosted by 0.5% due iPhone 5 sales, a comment which even the most clueless economists saw right through, and which we commented on as follows: “don’t laugh: yes, US GDP, not that of China where the iPhone is actually produced, but the US where the consumer merely incurs more record student loans to be able to afford it.” Well, in a prime example of goal-seeking data to fit reality, here comes that other quite humorous “economist”, Deutsche Bank’s Joe LaVorgna (recall that Joe is sadly a loser when pitted against the groundhog), who has come up with a slightly different solution: namely that the iPhone led to a drop in Q4 GDP. Step aside Bush, now everything (both good and bad) is the iPhone’s fault.

The above is derived from his discussion of today’s massive trade deficit surge, driven as we observed earlier, by a spike in imports:

The surge in imports was in the ex?petroleum goods category ($158.9B vs. $149.6B previously). In fact, the increase in imports was heavily tilted toward consumer goods, which rose $4.6B, and to a lesser degree by autos ($1.5B) and industrial supplies ($1.3B). Perhaps the release of the iPhone 5 is boosting the consumer goods category, as cell phones increased by $1.8B.

And since soaring imports lead to a drop in GDP, it means iPhone5 launch ->  US GDP drop. In other words, when all else fails, goal seek any variable BS to fit your flawed model.

If there are still those who are confused by why the title “economist/strategist” is the most laughter-inducing of all on Wall Street, this should hopefully answer it.

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One Response to “So Which Is It: iPhone 5 Now Blamed For Q4 GDP Drop”

  1. Marilyn Gjerdrum Says:

    When a community is investing in Apple stock to try to balance their books, we are all in trouble. Entire counties, cities and local organizations are so strapped for cash (can’t raise taxes, or invest any money in infrastructure to create jobs) are gambling on Apple stock. It is insane. Mr. Kettering, one of the original builders of GM once remarked it is impossible for any organization to consistantly grow at 8-10% per annum…….it is impossible to continually grow at such a speed once an organzation is established. First few years, yes, otherwise, no. People are so greedy for cash, they have abandoned common sense. Nothing honest can grow that way, only ponzi schemes and Enron Accounting will give one such returns…….until they don’t. Once the truth is out, they collapse.
    There is no recourse left. Our system is so corrupt that there is no way for investors, pension holders, or organizations to get their money back. In a more honest system, the wrongdoers would go to jail, in this case, nothing will be done. Just look at Jon Corzine. If anyone belongs behind bars……..!
    When Apple goes down, it will take millions of people with it. As you point out, they don’t even build the phones or autos here that are selling. Why? Corrupt trade agreements. All that stuff could be built here, but it isn’t. OUr leaders work against our national best interests. That used to be considered treason.

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