We meant to say 2.2%

[Anonymous]

qc, it still feels like 0% to me. Wager: beer at the next get together? Me at 0%, you at 2.6% for growth in Q4 06 GDP?

[powayseller]

jg, next thing you know, Daniel and davelj will ask you to put up $10K to prove that you really mean what you say 🙂

[davelj]

No, PS, I won’t. I actually agree with jg. But even if I didn’t, his assertion is not nearly as outlandish and uninformed as your assertion regarding ARM defaults. But find me something equally silly and I’ll be happy to take the other side of the bet. That’s what investing is all about after all: finding assymetric bets, where your downside is limited and your upside is several multiples of the downside, based on reasonable probabilities.

[powayseller]

davelj, Roubini quoted me on his blog this week. So I’m not as dumb as you’d like to think. And I know you’re pretty smart too. So let’s put our heads together, as we should in the piggington community, and figure out what are the chances of those FBs actually being able to pay off one of those loans (meet me at the ARM thread for that one). What is your prediction for GDP?

[Anonymous]

Oh, puhleeze, ps.

[(former)FormerSanDiegan]

“if you exclude the effect of higher inventory, the GDP number would come out to be closer to 2% which was closer to the consensus estimate by bloomberg. ” – qcomer

“That’s what investing is all about after all: finding assymetric bets, where your downside is limited and your upside is several multiples of the downside, based on reasonable probabilities.” – davelj

“Roubini quoted me on his blog this week. So I’m not as dumb as you’d like to think. And I know you’re pretty smart too. ” – PS

“Oh, puhleeze, ps.” – jg

Now we’ve all been quoted.
Have a superior Friday.

[qcomer]

ISM numbers today slid below 50 indciating manufacturing is contracting for the first time in 3 years. If this contraction is confirmed in next data point as well then I would admit my recession call for late 2007 may have been a bit off because I didn’t expect this number to go below 50. We may hit something ugly 1H 2007. I am a firm believer in the ISM numbers because strong manufacturing provides jobs which fuels consumer spending.

Maybe this is an outlier and if we get the same below 50 number next time, we are definitely in troubled waters. To be clear, since 1960, such contraction in manufacturing activity has always led to a recession. I locked some of my 2006 gains today. The market seems to think the same as SP500 is testing 1400, Naz is testing 2400.

[Anonymous]

Good summary, qc.

But, the important question is: are we on for a wager of a beer? I win if Q4 ’06 GDP growth comes in at 1.2% or below (mid of 0-2.6%), you win if it comes in at 1.3% or above?

Simple, frugal bet for a simple, frugal guy like me.

[sdcellar]

Just in case someone misundertands my bet “rant” on another thread, I’m totally fine with (and fond of) this kind of wager.

(not that it matters what I think one way or another)

[sdcellar]

and jg, why are you giving up the .0999999999999999999999999999? Seems to me like that could matter!

[(former)FormerSanDiegan]

ISM reading implies 2.4% GDP growth

qcomer –
The current ISM reading of the Purchasing Managers Index is 49.5 (yes manufacturing is contracting slightly since less than 50).

However, the ISM states that this number is consistent with GDP growth of 2.4%, based on past relationships.

Here’s a quote : “In addition, if the PMI for November (49.5 percent) is annualized, it corresponds to a 2.4 percent increase in real GDP annually.”

So, the news is the same as the GDP being in the 2-2.5% range, which we already knew. This simply confirms that the economy is slowing at the same pace according to this report as the GDP report previously suggested. (Yawn)

Here’s the report for more details : < a href="http://www.ism.ws/about/mediaroom/newsreleasedetail.cfm?ItemNumber=15697&navItemNumber=12942" > ISM Report

[Anonymous]

sdc, I’m willing to give up the 0.1% because I have some confidence that things are slowing (despite FSD’s attempts at puffery, otherwise!).

[sdcellar]

See, there you go rounding again! Well, I’d admire the confidence.

[(former)FormerSanDiegan]

jg –

To what puffery are you referring ?

[Anonymous]

ISM of 2.4% for Q4 sounds like puffery (highlighting the positive) to me, who sees little light (reasonable auto sales) and much dark (falling housing, falling commercial construction, falling manufacturing, etc.).

I use the term ‘puffery’ in a light sense; if I said you were practicing ‘quackery’ (and I’m not), then you should take offense with me, FSD. Take no offense with ‘puffery,’ FSD.

[Author]

Posts