This post is a guest contribution by Bill King*, well-respected and straight-talking author of The King Report.

Most of the Street heralded the 1% decline in Q2 GDP because it was 0.5% better than consensus - even though the US government admitted in the release that its GDP estimates over the past several years were consistently wrong! So why should the latest report be any more accurate?!?!

We feel compelled to address the scheme of past-month lower revisions producing better-than-expected m/m or q/q results, even though the aggregate metric is worse than expected. We have incessantly noted and commented on this scam but most of the trading and investing universe omits it.

We will again utilize basic math to illustrate the scam. If Q4 ‘08 GDP was 100 units, and Q1 ‘09 was reported at -5.5% and Q2 ‘09 GDP was expected to be -1.5%, the

This post is a guest contribution by Bill King*, well-respected and straight-talking author of The King Report.

For the past several years Street operators have assumed that the computer jockeys who were being employed by proprietary trading departments on The Street were developing algorithms that would find other algorithms that represented buyside orders so prop desks could trade against those orders.

Another trading prop that has been occurring for years is certain firms feed their electronic trading systems into prop desks so traders can see in real time money flows into and out of stocks and groups.

However recent revelations are forcing the Street to consider the possibility of automated front-running on an unfathomable scale. The two “front-running” issues are: 1) “queuing” [of orders] - finding orders loaded into a system, particularly limit orders, and trading against them; and 2) “latency” - discovering and then front-running

In the currency market, the dollar prolonged its slide against the euro. Late Friday, the euro was trading at $1.4126 vs. $1.3923 on Thursday.

With traders exuding more confidence that the worst is past, the buck fell sharply in May before seeming to find its footing earlier this past week. But it still wound up losing 6% during the month, the worst showing since December.

There were plenty of numbers to sort through yesterday. The Reuters/University of Michigan consumer sentiment index increased to 68.7 in May, from 65.1 in April. That was a bit higher than economists’ expectations.

However, the Institute for Supply Management-Chicago said its business barometer plunged to 34.9 in May, from 40.1 in April. Readings below 50 indicate contraction.

The Commerce Department said the U.S. economy shrank at a 5.7% annual pace in the 1Q09, capping its worst six-month performance in five decades. While that was a slight improvement on