With investors cheering the government's and Cash for Clunkers' massive contributions to preliminary Q3 GDP, numerous questions remain unanswered, chief among them being why is the dollar now so completely disconnected from any fundamental economic news, and how long can it remain a plaything in the constant shuffle to procure cheap risky assets even when it should get at least a moderate pop on an improving US economy. With the Fed expected to not raise rates for almost two years, the economy will not have an impact on the US currency for a long time, as such putting the country in a position where it may well face hyperinflation as the Fed continues to combat the current deflationary episode with every instrument imaginable.

Ironically, ongoing "good" data which are simply the result of various one-time, presumably non-recurring stimulus and subsidy programs will sooner or later translate into inflation, if pushed long and hard enough. And as broad based deflation is still the primary threat, courtesy of declining wages, even with gas again approaching $3.00/gallon, Obama may have boxed himself into a corner with his numerous TV appearance claiming that the economy has essentially mended.  Of course, even first year analysts at investment banks know to exclude one-time benefits/charges from ongoing operations. It is a pity the US president, however, never sat in on the Goldman Sachs analyst class: one imagines the firm owes him at least that much.

Either way, as stimulus and liquidity benefits taper off, with the Fed's inability to buy any more treasuries a key case in point, the economy has rebounded sufficiently high for even some of the most violent bears to throw in the towel. Yet Q4 GDP will see the impact of the stimulus programs falling away (and one hopes at least one regional Fed will support some of this inventory build data that the government is doing all it can to make the population believe is currently occurring). So even as Goldman engineered a perfect bear trap with their surprise revision lower, expect Q4 GDP to provide not only a likely lower adjustment to Q3 economic data, but to be a real miss to the 2.4% consensus reading (regardless of what Goldman does a few minutes before the number's official release). And with a range of GDP expectations from -1.5% from Mizuho to 5.5% for First Trust (good luck boys), it is pretty safe to say that nobody really knows what will happen, except that everyone has grown increasingly optimistic on Q4 GDP over time. What is simply ludicrous is that Q4 GDP now is expected to be higher than what it was expected to be in March of 2008 (2.2%). Gotta love government interventions.