Recession? We don' need no steenkeen recession!

jimpeel

Well-Known Member
It seems that all of the doomsayers were wrong --- AGAIN. Ever notice that the experts are surprised by the "better than expected" results they declared would not happen?

http://www.foxnews.com/story/0,2933,353506,00.html

What Recession? First Quarter GDP Shows Modest But Better-Than-Expected Growth
Wednesday, April 30, 2008

The nation's economy grew at a modest but better-then-expected pace last quarter, posting a 0.6 percent increase despite the continuing housing and credit problems plaguing many Americans.

Many analysts were predicting gross domestic product (GDP) growth would come in at 0.5 percent during the January — March 2008 period. Earlier this year, some economists thought the economy actually would lurch into reverse during the opening quarter.

The latest numbers reported Wednesday by the Commerce Department also did not meet what economists consider the classic definition of a recession, a retraction of the economy. This means that although the economy is stuck in a rut, it is still managing to grow, even if the growth is modest.

"The economy is weak but not collapsing," said Lynn Reaser, chief economist at Bank of America's Investment Strategies Group "A recession can't be ruled out, although the stars are not lined up at this point to definitively say one way or the other."

Gross domestic product measures the value of all goods and services produced within the United States and is the best measure of the country's economic health. Voters are keenly worried about the country's economic problems and so are politicians — in Congress, in the White House and on the campaign trail.

The housing situation turned more bleak in the first quarter, as record-high foreclosures dumped more unsold homes on the market, adding to builders' headaches. Builders slashed spending on housing projects by a whopping 26.7 percent, on an annualized basis, the most in 27 years. That was the big drag on economic growth.

Consumers — whose spending is vital to the country's economic health — turned much more cautious, also restraining overall economic growth in the first quarter. Their spending rose at just a 1 percent pace. That was down from a 2.3 percent growth rate and was the slowest since the second quarter of 2001, when the United States was suffering from its last recession.
 

Gonz

molṑn labé
Staff member
As often as I see the term "...than expected" I'm beginning to think my distrust of expeets is too soft.
 

catocom

Well-Known Member
as long as it's not negative growth:retard4:

Those numbers are not growth IMO, they are skewed numbers.

how much of that gdp was military equipment sold to the saudis, and isreal?
 

jimpeel

Well-Known Member
OOPS!

Despite all of the wishful reporting by the willing Liberal press the economy has yet to produce their wished-for recession. We have yet to have even one quarter of negative growth let alone the two quarters needed for a recession to be declared.

http://biz.yahoo.com/ap/080529/economy.html?.v=21

AP
US logs better but still weak growth
Thursday May 29, 6:10 pm ET
By Jeannine Aversa, AP Economics Writer
US logs better but still weak growth; far from being out of the woods

WASHINGTON (AP) -- The economy logged slightly better -- but weak -- growth in the first quarter, spurred by improved sales of U.S. products overseas. While that's heartening, the country's economy is still far from being out of the woods.

In fact, a closer look behind the 0.9 percent increase in the gross domestic product during the January-to-March period revealed much caution on the part of consumers who have been clobbered by the housing, credit and financial debacles.

"What emerges is a picture of an economy that's gasping for air," said Bernard Baumohl, managing director of the Economic Outlook Group.

Consumers -- major shapers of overall activity and thus the economy's lifeblood -- boosted their spending at the slowest pace since the last recession, in 2001. And, their decreased appetite for shopping sprees reduced sales of foreign-made imports here, which helped to narrow the trade deficit.

The new GDP reading, released Thursday by the Commerce Department, was an improvement from the government's initial first-quarter estimate as well as the economy's performance in the final quarter of last year. Both periods were pegged at a 0.6 percent growth rate.

However, economists still consider the 0.9 percent growth rate subpar. More normal growth would be along the lines of a 2.5 percent to 3 percent pace, they said. GDP measures the value of all goods and services produced within the United States and is considered the best barometer of the country's economic health.

"The economy is scraping along close to the bottom but it is still afloat," said Lynn Reaser, chief economist at Bank of America's Investment Strategies Group.

That was sufficient to buoy Wall Street. The Dow Jones industrial average gained 52.19 points to close up 12,646.22. The Dow was up nearly 133 points at its high of the session.

[more]
 

MrBishop

Well-Known Member
You do realize that the price of OIL and FOOD are two of the main indicators of GDP, right? The Saudis and other OPEC nations are actually bolstering your economy :D
 

jimpeel

Well-Known Member
You do realize that the price of OIL and FOOD are two of the main indicators of GDP, right? The Saudis and other OPEC nations are actually bolstering your economy :D

GDP is based on consumption and the price of goods, is it not? The indicators are based on what this country produces and consumes, not on what some other country produces.

http://www.sparknotes.com/economics/macro/measuring1/section1.html

Gross Domestic Product (GDP)
The Gross Domestic Product measures the value of economic activity within a country. Strictly defined, GDP is the sum of the market values, or prices, of all final goods and services produced in an economy during a period of time. There are, however, three important distinctions within this seemingly simple definition:

  • GDP is a number that expresses the worth of the output of a country in local currency.
  • GDP tries to capture all final goods and services as long as they are produced within the country, thereby assuring that the final monetary value of everything that is created in a country is represented in the GDP.
  • GDP is calculated for a specific period of time, usually a year or a quarter of a year.
Taken together, these three aspects of GNP calculation provide a standard basis for the comparison of GDP across both time and distinct national economies.
 

MrBishop

Well-Known Member
GDP is a monetary figure...of course it's based on price of goods. They're not measuring how many gallons of gas/barrels of oil/bags of rice are sold and giving it an arbitrary and static figure, they're using market-value totals. That's what inflation is all about. :shrug:
 

MrBishop

Well-Known Member
GDP is based on consumption and the price of goods, is it not? The indicators are based on what this country produces and consumes, not on what some other country produces.

http://www.sparknotes.com/economics/macro/measuring1/section1.html


Your company imports oil and produces gasoline, imports cattle and produces beef, imports rice and produces cardboard pebbles otherwise known as 'Rice a Roni' - also why a trade deficit is at work in GDP.

*Nice post-riposte edit, btw.
 

MrBishop

Well-Known Member
The "official" government numbers on inflation are simply fabrications. As oil was going from $100 to $130/bbl, and gasoline in the US was marching up to $4/gal - the US government reported a *FALL* in the price of petroleum products.

Similarly, they said food prices were *only* up 4%, but most independent sources cited rises of 10% year over year.

Unemployment, according to the same Bureau of Labor Statistics, rose from 4.5% a year ago to 5% this year (that's a 10% rise in unemployment), and since they don't count people who've given up looking for work, that figure is probably understated as well.

Again, according to the BLS, the US economy has lost 260,000 jobs since the beginning of the year. When originally announced, it's often higher than the forecasts to help boost the stock market.
(For example, the flash estimate for Jan08 was 130,000 NEW jobs added; the revised number now posted on the BLS site is 76,000 JOBS LOST.) That's a turnaround of over 200,000 jobs.


Here's another example: the BLS reported Feb08 job losses of 63,000 (http://www.nytimes.com/2008/03/07/business/07cnd-econ.html?hp) but this was later revised to 83,000 jobs lost. http://www.bls.gov/eag/eag.us.htm Yep, that sure sounds like a booming economy to me!


12-Dec 28-May %Change
DJ Ind 13264 12594 -5.05%
SP500 1468 1390 -5.31%
US$DX 76.65 72.61 -5.27%
OIL 95.98 131.03 36.52%
CRB 476 544.66 14.42%
Gold 838 902 7.64%


For those who don't know, US$DX is the US dollar index, a trade-weighted measure of the US dollar's performance against its trading partners. The CRB is the Commodity Research Bureau's overall measure of commodity prices (foods, fibres, metals, etc.).
So, let's add it up, shall we?


Falling stock prices, falling employment, falling dollar, with rising food prices, rising energy prices, and rising house defaults - even among the multi-millionaires in the Hamptons, as was reported this week. Yes, that sounds like a glowing economic picture, doesn't it?
:drink2:
 

2minkey

bootlicker
Falling stock prices, falling employment, falling dollar, with rising food prices, rising energy prices, and rising house defaults...

interesting how certain ideological convictions allow someone to totally miss the obvious, eh?
 

SouthernN'Proud

Southern Discomfort
rising house defaults - even among the multi-millionaires in the Hamptons,

But you see, that's misleading. We all know people with 2.2 million dollar homes but too broke to furnish 'em. I know of one that literally had sleeping bags and paper plates with a microwave for over three years because after buying it the dumbasses were too overextended to afford anything else, and had to sell what furniture they brung with 'em.

It all goes back to greed v discipline. Gimme my 85K plantation modestly furnished with enough left over to ENJOY life a little over a 240K anonymous lookalike home that requires 90 hours/week work just to stay afloat.
 

chcr

Too cute for words
*Puts fingers in ears* la,la,la,la,la,la,la,la,la,la,la,la,la,la,la,la,la,la,la,la,la,la,la,la,la,la...
 

2minkey

bootlicker
there's a reason i cut that section out of what i quoted... and the southron gentleman has it right.
 

spike

New Member
The problem with the housing market is somehow suddenly just in the last couple of years people got greedy and started buying houses beyond their means.

Before that there were no greedy people living beyond their means.

This explains everything. :laugh:
 
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