The soundbites from the bears:
John Williams of Shadow Government Statistics:
Thus, the estimable John Williams, proprietor of Shadow Government Statistics, reckons that a full 92% of the apparent 3.5% growth in the third quarter's GDP came from one-time stimulants, mostly courtesy, directly or indirectly, of Uncle Sam. Here's how he breaks down those nonrecurring contributions: 1.7% from auto sales (goosed by "cash for clunkers"); 0.6% from new residential construction (the rush of first-time home buyers to get in under the fast-approaching deadline on the $8,000 tax credit) and a 0.9% gain from a largely involuntary inventory buildup.
AS A KIND OF POSTSCRIPT TO THE ABOVE are some to-the-point comments by David Rosenberg, of Gluskin Sheff. Like John Williams, Dave observes that if it weren't for the government's generosity via its stimulus exertions, real GDP in the September quarter would have gone nowhere. But he also fingers the housing and auto subsidies as causing the personal savings rate to fall precipitously, to 3.3% from 4.9% in the previous three months.
In the past quarter-century, there have been only four other instances when savings have fallen so much in a single quarter. Except for that plunge, he says, "real GDP would have contracted fractionally." Put another way, all of the quarterly gain in GDP "was funded by a rundown in the savings rate that occurs less than 5% of the time."
Which leads him to the contradiction between what might be dubbed Wall Street's frenetic take on the supposed economic rebound versus the considerably more tepid view of the men and women who run America's business. If companies, both financial and non-financial, are big believers in this new post-recession V-shaped recovery that seems to have the hedge funds and most strategists so excited, Dave asks, why are they still cutting back on capital expenditures (which declined, for the fifth straight quarter) and continuing to slice inventories ($130 billion worth), and why are banks still so tight-fisted about lending, which has been contracting at an unprecedented 15% annual rate?
Here's the poll and the soundbites from the Big Money Managers: