Analysts expected meager growth of 1%. Couldn't even get that. Economy UNEXPECTEDLY contracts 0.1%. And, gee, everything was going so well.
The WSJ story. And, of course, Steve Liesman of CNBC is able to spin this into gold.
But the Obama administration is already spinning the news (see third paragraph in bold), an AP story:
The U.S. economy shrank from October through December for the first time since the recession ended, hurt by the biggest cut in defense spending in 40 years, fewer exports and sluggish growth in company stockpiles. The decline occurred despite faster growth in consumer spending and business investment.
The Commerce Department said Wednesday that the economy contracted at an annual rate of 0.1 percent in the fourth quarter. That's a sharp slowdown from the 3.1 percent growth rate in the July-September quarter and the first contraction since the second quarter of 2009.
Economists said the surprise decrease in the nation's gross domestic product wasn't as bad as it looked. The weakness was primarily the result of one-time factors. Government spending cuts and slower inventory growth subtracted a total of 2.6 percentage points from growth.Does that mean excluding these one-time cuts, GDP would have almost tripled analysts' expectations, from 1% (analysts' expectations) to 2.5% (estimates by Obama-friendly economists)? First we had the government publishing unemployment numbers based on estimates from states who never forwarded the data; now we have a new way of measuring GDP: forgeddaboutdaonetimefactors.
My hunch is a) Ben has marching orders to spend as much money as necessary to prevent a second month of contraction in GDP; and, b) failing that, the definition of two consecutive months of recession = a recession will be changed (the definition will be changed; in fact, there is no hard and fast rule defining a recession). The scary part is that this was a huge drop: from 3% ballpark to -0.1%. Can't recall when I last saw that "unexpectedly."
And so it goes. Happy days are here. The economy grew by 2.5%, almost tripling estimates, except for one time factors. Cue up Connie Francis.
Oh, by the way, "they" say much of this drop was due to huge decrease in defense spending. Think what will happen when "sequestration" kicks in. Sequestration will effect the entire government, not just defense spending.
Scroll down for wells coming off confidential list; earnings.
From RBN Energy: huge increase in storage capacity along the Gulf Coast -- tectonic shifts?
Over the next three years seven Gulf Coast region terminal operators will build an estimated 19 MMBbl of new crude oil storage capacity. Those storage expansions are being made in preparation for as much as 3.1 MMb/d of new crude supplies expected into the Gulf Coast refining region over the next two years from new pipeline projects. Today we summarize the efforts that terminal operators are making to get ready for the flood.
Section D (Personal Journal):
Microsoft: "more control for annual fee" -- one doesn't have to read much more than this to know this ... Microsoft is now "renting "Office."
The company on Tuesday started offering consumers a new version of Office—the widely used bundle of personal-computer applications—that for the first time arrives along with a version that can be "rented" for a monthly fee, similar to how people subscribe to cable or to Netflix Inc.'s movie service.
Microsoft is pushing hard to get most people to opt for Office 365, as the subscription version is known, for an upfront annual fee of $99.99, or $9.99 a month for a pay-as-you-go option. (People buying Office along with a new computer can pay a $79.99 annual subscription for Office 365.)For no cost, Apple pushes updates of its operating system for free, and almost seamlessly (only asking whether I want to install the update). Of course, operating systems and applications are very different but I don't think average users are going to fall for this. MSFT is hoping DOD falls for it. DOD is going to have make a huge decision on whether they want to spent $99/employee/year for upgrades that almost never matter. In fact, the only reason some folks upgrade is so they can share information with others who have upgraded. MSFT "Office" is generally not backward-compatible.
So, if you like to pay a subscription for a big company to control your "office," you will love this newest revenue stream idea that MSFT has dreamed up.
Section C (Money & Investing):
Page C14: don't back up the truck with Hess.
Section B (Marketplace):
Can gas undo nuclear power?
Chesapeake CEO to exit.
Even Facebook must change to be relevant on Apple's mobile devices.
Investors agitate in oil patch.
Egypt is warned of collapse. No link. Story is everywhere. First linked at Drudge yesterday. [Later, February 1, 2013: in the LA Times -- a photograph of "westernized" males who obviously have no interest in an Islamic society. Cue up Connie Francis. They can thank President Obama.]
Coal is dead? Not in Mexico. Texas gives okay to coal mine on the border that will provide coal for a Mexican utility -- faux environmentalists must be going nuts. Location, location, location.
Other links, stories
Satellite photo of Great Britain covered in snow; one of the coldest, snowiest periods in British history
Unusually frigid and snowy conditions blanketed much of the island of Great Britain in snow earlier this month. The winter wonderland was spotted from above by NASA's Terra satellite on Jan. 26.
The snow started falling mid-month when a storm system blowing in from over the North Atlantic combined with unusually chilly conditions ushered in by a pattern called the Scandinavian Block, according to Accuweather.com. This high-pressure pattern sits in place over Scandinavia and funnels cold air toward the United Kingdom from over the Baltic and western Russia, according to the U.K. Met Office.