found on misc.invest.stocks:

From The King Report:

The main story from Wednesday is the way Wall Street and its propaganda arm
in the financial media trumpeted a hokey GDP report. Anyone that took even a
cursorily glance at the data or BEA release should be aghast at the
legerdemain that was utilized to generate a higher than warranted GDP
number.

3.7% GDP was expected. The number came in at 3.8%. The GDP Price Index was
expected to be 3.2% but came in at 2.9%. Ergo, the lower deflator provided a
0.3 boost to real GDP.

The BEA attributed better exports and spending on housing projects for the
better GDP. Where did the BEA find the exports that it missed earlier? From
the US Department of Defense, it found more military equipment exports. This
added 0.1 to GDP.

Now here's the real corker: BEA has residential spending increasing 11.5%
(see Table 3). But in the GDP Price Index calculation the BEA has
residential prices up only 1.1%!!!!(see Table 4) The price increases for
residential in 2004 are 5.4% Q1, 9.1% Q2, 6.8% Q3 and 3.8% Q4!!! How does
BEA get prices +1.1% for Q1 '05 in a screaming housing market?!?
http://www.bea.gov/bea/newsrel/gdpnewsrelease.htm

This is absurd! Industry concerns and some US government agencies have
housing prices up double-digit amounts in Q1. The BEA exploits housing
strength for the GDP calculation then further boosts real GDP by showing the
price increase at less than one tenth of reality! Even more troubling is the
silence from Wall Street on this fraud. Look at all the reports you got this
morning on GDP. How many did any forensic work on the numbers? And we didn't
do any real forensic work; we just looked at the commentary in the release
and the tables.It's only a conundrum if you heed the fictitious numbers.

Here's something important that caught our eye but is largely ignored by The
Street: Disposable income increased only 0.4%, down from Q4's +13.8%!!! This
is the smallest increase since Q3 of 2002! And we keep hearing bulls aver
that income is growing and that's why consumer sentiment is so high!!!

The above table is verbatim from the BEA GDP release.
http://www.bea.gov/bea/newsrel/pinewsrelease.htm

Other GDP notables: Real final sales (GDP minus private inventory growth)
increased 3%, a significant slowdown from Q4's 4.3%...Private inventories
grew $66.8B vs. Q4's +$47.2B.Consumer spending, which accounts for about
two-thirds of all economic activity, increased 3.6%; Q4 had 4.2% growth. The
better trade deficit due to the newly found military equipment sales
improved GDP by 0.1%...Inventory growth contributed 0.72 to GDP.

AP: "One measure of after-tax profits in the GDP report showed profits
growing by 1.2 percent in the first quarter from the previous quarter. That
was slightly better than an earlier estimate but down from a 12.5 percent
increase in the fourth quarter."
http://apnews.myway.com/article/20050629/D8B19LJ80.html

From the BEA GDP release: "Profits after tax with inventory valuation and
capital consumption adjustments increased $11.9 billion in the first
quarter, compared with an increase of $108.3 billion in the fourth
quarter.The large increase in first-quarter profits before tax and the large
decrease in the first-quarter capital consumption adjustment reflect the
expiration of the "bonus" depreciation provisions of both the Job Creation
and Worker Assistance Act of 2002 and the Jobs and Growth Tax Relief
Reconciliation Act of 2003. The inventory valuation adjustment increased
$8.7 billion (from -$49.1 billion to -$40.4 billion), in contrast to a
decrease of $11.3 billion."

In Table 3, the BEA still leaves blank the chained GDP contribution from
computers; so no one can see how much BEA marks up real computer spending
into fictional GDP. And Wall Street stays mum on this 'big brother'
censorship because it suits the purpose of overstating GDP.
http://www.bea.gov/bea/newsrel/gdpnewsrelease.htm






--
getting out of bed in the morning is an act of false confidence
- jules feifer
to email me, delete blackhole. from my return address

arthur wouk at awouk@blackhole.nyx.net wrote

Don't worry. The Bushies have hired a new bunch of REAL scientists ( called
alchemists), who will very soon be able to change lead into gold.

Then all this fudging of economic data will become unecessary; because we'll
all be rich.