U.S. GDP contracts

[CitadelGrad]

We're on our way to another technical recession.

http://www.bloomberg.com/news/2013-01-3 ... -data.html

Thank you, President Obama.

[∞∞∞]

It looks like it was 'cause of the defense cuts. That's not a bad thing in the long-run.

http://money.cnn.com/2013/01/30/news/ec ... ?hpt=hp_t3

It's "the best-looking contraction in U.S. GDP you'll ever see," Paul Ashworth, chief U.S. economist for Capital Economics said in a research note. "The drag from defense spending and inventories is a one-off. The rest of the report is all encouraging."

[CitadelGrad]

It looks like it was 'cause of the defense cuts. That's not a bad thing in the long-run.

http://money.cnn.com/2013/01/30/news/ec ... ?hpt=hp_t3

It's "the best-looking contraction in U.S. GDP you'll ever see," Paul Ashworth, chief U.S. economist for Capital Economics said in a research note. "The drag from defense spending and inventories is a one-off. The rest of the report is all encouraging."

Nice quote, but Ashworth is getting murdered on econ and finance blogs for that quote.

About one-quarter of last month's published 1.8% annualized GDP growth rate was related to accelerated defense spending that had been allocated for future fiscal quarters. The reason for the accelerated spending was an attempt to boost anemic GDP growth rates.

Another one-quarter of that figure was related to increases in inventories. Increasing inventories sounds great until you realize that inventory turnover rates are declining.

In other words, Ashworth is talking out of his ass and the negative GDP growth rate is just as bad as you would think. If you back out inflation and the effects of quantitative easing, it is much worse.

[kalm]

What's your remedy Graddy?

[ASUG8]

It looks like it was 'cause of the defense cuts. That's not a bad thing in the long-run.

http://money.cnn.com/2013/01/30/news/ec ... ?hpt=hp_t3

It's "the best-looking contraction in U.S. GDP you'll ever see," Paul Ashworth, chief U.S. economist for Capital Economics said in a research note. "The drag from defense spending and inventories is a one-off. The rest of the report is all encouraging."

I would expect to see a commensurate spike in defense related unemployment based on a 22% drop in defense spending.

[CitadelGrad]

What's your remedy Graddy?

Reduce government spending to stop the decline in the dollar. Raise interest rates, so banks can make a buck and will start lending again. Reduce the tax burden, including but not limited to income tax rates.

Will increased interest rates cause a recession? Probably. The point is that we are already headed into a recession. The difference is that higher interest rates will break the Keynesian boom/bust cycle and establish conditions for long-term stable growth.

[bluehenbillk]

The point is that we are already headed into a recession.

Says who??

[CitadelGrad]

The point is that we are already headed into a recession.

Says who??

Well, Krugman has been saying that we are already in a depression.

Virtually all of the economic data and revisions look like shit. You might want to get your nose out of Obama's pubes and take a look at it.

[ASUMountaineer]

What's your remedy Graddy?

Reduce government spending to stop the decline in the dollar. Raise interest rates, so banks can make a buck and will start lending again. Reduce the tax burden, including but not limited to income tax rates.

Will increased interest rates cause a recession? Probably. The point is that we are already headed into a recession. The difference is that higher interest rates will break the Keynesian boom/bust cycle and establish conditions for long-term stable growth.

While it's possible we could experience a "double-dip" recession, we are currently not in one and don't see one shortly around the bend. However, I do agree wholeheartedly with the bolded sentence.

[DSUrocks07]

How long do people expect Fed interest rates to hover near 0% and that be a good thing?

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[89Hen]

Raise interest rates, so banks can make a buck and will start lending again.

I'd like to hear more on that. Banks do well no matter where interest rates are Grad. When lending rates are low, the banks offer lower savings rates. When rates go up, they pay more for savings rates.

[CitadelGrad]

Reduce government spending to stop the decline in the dollar. Raise interest rates, so banks can make a buck and will start lending again. Reduce the tax burden, including but not limited to income tax rates.

Will increased interest rates cause a recession? Probably. The point is that we are already headed into a recession. The difference is that higher interest rates will break the Keynesian boom/bust cycle and establish conditions for long-term stable growth.

While it's possible we could experience a "double-dip" recession, we are currently not in one and don't see one shortly around the bend. However, I do agree wholeheartedly with the bolded sentence.

Why wouldn't you see a recession around the bend? Do you think QE IV will save us? The negative growth is just a continuation of a trend. GDP growth and GDP forecasts have been declining for more than a year. If you have some knowledge of events that will break that trend, I'd like you to share with the rest of us.

The data that has been published by the NY, Philly, KC and Richmond Feds recently makes today's news a bit of a yawner. Anyone who is shocked by negative growth just hasn't been paying attention.

[CitadelGrad]

Raise interest rates, so banks can make a buck and will start lending again.

I'd like to hear more on that. Banks do well no matter where interest rates are Grad. When lending rates are low, the banks offer lower savings rates. When rates go up, they pay more for savings rates.

They make their money on the variance between the two rates. ZIRP (and inflation-adjusted NIRP) makes that variance very small.

[DSUrocks07]

Raise interest rates, so banks can make a buck and will start lending again.

I'd like to hear more on that. Banks do well no matter where interest rates are Grad. When lending rates are low, the banks offer lower savings rates. When rates go up, they pay more for savings rates.

But that discourages savers from keeping deposits at their banks which lowers their available capital. Having a savings account that carries a 0.05% interest rate isn't a very exciting prospect.


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[ASUMountaineer]

While it's possible we could experience a "double-dip" recession, we are currently not in one and don't see one shortly around the bend. However, I do agree wholeheartedly with the bolded sentence.

Why wouldn't you see a recession around the bend? Do you think QE IV will save us? The negative growth is just a continuation of a trend. GDP growth and GDP forecasts have been declining for more than a year. If you have some knowledge of events that will break that trend, I'd like you to share with the rest of us.

The data that has been published by the NY, Philly, KC and Richmond Feds recently makes today's news a bit of a yawner. Anyone who is shocked by negative growth just hasn't been paying attention.

Yes, we have seen negative growth. But, even our positive growth isn't rapid and huge. I'm not discounting the possibility that another recession could hit us while we're slowly working our way out of one, but IMO it's not a certainty yet either.

[GannonFan]

Living in the manufacturing sector I can tell you it's been generally piss poor for the past 6 months and there's no real silver lining on the horizon right now. Business across multiple sectors and worldwide is down and there's a lot of treading water with the hope that things will be better sometime soon. So in this context, a GDP contraction isn't surprising. Heck, we've had only meager increases in GDP over the past couple of years so even when we've had growth it's been pretty anemic. It's not really rosey right now out there.

[bluehenbillk]

Let's just revisit this thread 3-6 months ago and see if we're in a Rebound or a Recession.....

[ASUG8]

We finished '12 up over 10% in gross sales vs. '11, and GM up nearly 11%. Looks like another nice bonus year.

[CitadelGrad]

Let's just revisit this thread 3-6 months ago and see if we're in a Rebound or a Recession.....

Do you have a time machine?

[bluehenbillk]

Let's just revisit this thread 3-6 months ago and see if we're in a Rebound or a Recession.....

Do you have a time machine?

Haha, my f-up....3-6 months from now

[Skjellyfetti]

Let's just revisit this thread 3-6 months ago and see if we're in a Rebound or a Recession.....

Exactly. They've done this every time there's been bad news the past few years.

RECESSION IMMINENT. COLLAPSE OF THE WORLD ECONOMY INCOMING. I SEE A HEAD AND SHOULDERS PATTERN DEVELOPING, ETC. ETC.

Then they're silent when the economy (slowly) improves.

And, this reminds me-- Col. Hogan still owes me for the bet on the stock market a few years ago (that he was off by like 4,000 points on ). Here's that thread if anyone wants to revisit for some Doom-and-Gloom forecasting lol's.
viewtopic.php?f=10&t=16245&p=305389&hil ... ad#p305389" onclick="window.open(this.href);return false;

[CitadelGrad]

The resident idiot thinks the stock market is an economic indicator.

BTW, you were wrong about the head and shoulders pattern. It was followed by a decline just as some of us predicted.

The economy isn't improving by any measure that I've seen. The rate of already anemic growth is declining. We would already be in a technical recession were it not for accelerated government spending. Of course, government spending shouldn't be included in GDP figures, but that's a different issue.

[Grizalltheway]

We finished '12 up over 10% in gross sales vs. '11, and GM up nearly 11%. Looks like another nice bonus year.

Be sure to send the Obamas a thank you card.

[ASUG8]

We finished '12 up over 10% in gross sales vs. '11, and GM up nearly 11%. Looks like another nice bonus year.

Be sure to send the Obamas a thank you card.

Nobody can afford to hire people to do things in this market, so the DIY market is booming.

[Grizalltheway]

Be sure to send the Obamas a thank you card.

Nobody can afford to hire people to do things in this market, so the DIY market is booming.

I believe it. The company I work for saves big companies quite a bit of moolah on their energy costs, so business/hiring has been pretty robust since the downturn started.