I still don't think we're in a recession. The media doesn't help anything any president that says he can stop or cause the opposite is a LIAR. Presidents cannot change/affect the economy like some think they can. And I'm not sure who said this, but it wasn't me; "The media has successfully predicted 38 of the last 2 recessions." 
Think about that next time the media is talking about a recession. As far as I am concerned, the US was in a recession a few months ago, they only really seriously started talking about it when Bernake dropped the "R" word.
Despite what you think, the US is the most stubborn economy to admit when it is in a recession, part of the reason is information lag to "truly call it a recession", another is just pride, another is to try not to panic everyone on the markets. Don't even get me started on the media They have to be careful to call it a recession. It would cause a panic in the market. They could be nearing a depression, but wont call it that. It is a case of cause and effect, people hear the word recession, they react by stopping spending etc... there for slowing economy further, snowballs from there, and tadaa an even worse recession.
I am not sure that the USA are going to be in recession. But it's a strong warning for US economy and all the developed countries about the perverse consequences of a financial market without well-defined rules
| Quote: |
| They have to be careful to call it a recession. It would cause a panic in the market. They could be nearing a depression, but wont call it that. It is a case of cause and effect, people hear the word recession, they react by stopping spending etc... there for slowing economy further, snowballs from there, and tadaa an even worse recession. |
This is basically correct. It's not an issue of lying, it's an issue of recognizing that consumer reactions to political messages play a huge role in the direction of the economy.
Meanwhile, small business growth is at its lowest in 28 years, companies are laying off workers by the hundreds of thousands, and confidence is extremely low. What part of that doesn't scream "recession?"definition of recession:
| Quote: |
| A recession is defined to be a period of two quarters of negative GDP growth. |
GDP growth in U.S.A quarterly:
| http://www.economagic.com/em-cgi/data.exe/var/rgdp-qtrchg wrote: |
2007 03 4.9072
2007 04 0.5776 |
Thus, the USA is not in a recession. It's as simple as that
However,
Shows us that, according to the natural business cycle of:
recovery and prosperity to contraction or recession to recovery and prosperity
http://en.wikipedia.org/wiki/Business_cycle
Thus, from this graph, and with very little data analysis, you could say that a recession/contraction is looking very likely currently [quote="bogger"]definition of recession:
| Quote: |
| A recession is defined to be a period of two quarters of negative GDP growth. |
Agreed, basically what a recession is
GDP growth in U.S.A quarterly:
| http://www.economagic.com/em-cgi/data.exe/var/rgdp-qtrchg wrote: |
2007 03 4.9072
2007 04 0.5776
Thus, the USA is not in a recession. It's as simple as that |
Your data just takes you to the end of 2007. Still gotta wait for the 1st quarter data (refer to post about information lag), and I agree, 0.5776 GDP growth during Christmas is very disturbing. It is not going to get any better, not with the job numbers being posts, housing starts (wait a second)....., I don't need to go on, I will just wait, I still think Jan 2008 is going to be the beginning of the recession in the US. I hope I am wrong! USA in recession, well we here down in Australia believe you guys are heading for a recession. Then again they love to feed fear to people in the US and here in Australia. Let's make everybody afraid ........ so they stop spending money and than we'll go into recession and we can tell everybody I told you so!!!
Anyway the USA has a very poor president at the moment, pouring money into war, neglecting all other sectors, so the sh#t will hit the fan eventually. Let's hope Barrack wins it and the world will be a better place.
let's avoid a contemplation of any "presidential candidates" until after one of them has been nominated by those pesky democrats and their convoluted system.
George Bush has been economically horrible for the USA, it's true.
| Bureau of Economic Analysis wrote: |
| Gross Domestic Product, 1st quarter 2008 (advance) April 30 8:30 am |
link http://www.bea.gov/newsreleases/2008rd.htm
I can't wait for this one 
Yeah, I wouldn,t say the US is in a recession, but that it could happen easily.. the US economy has to grow so much every year to avoid a recession, I think it will happen sometime.
ok, so news is out!
http://www.bea.gov/newsreleases/national/gdp/2008/gdp108a.htm
America is not in a recession yet it seems. GDP increased again by 0.6% a measly, but not quite negative amount, as such, the USA is still not in recession..
Please note that these figures are both preliminary and seasonally adjusted (i.e. pure BS...) so ignore them until the actual figures come out, 29.05.08
Worryingly, however the Consumer price index (i.e. inflation) has increased by 3.5%... inflation > growth makes bogger unhappy. =/ You really don't think the President (or government in general) can change the direction of the economy?
The executive and legislative branches are, with limited exceptions, extremely limited in their capacity to make intentional changes to the short run direction of the economy.
First, as an elected official, the modern president probably doesn't know any more about the mechanics behind the economy than your average American citizen. The basis for his "hiring" covers such a broad--and contentious--set of qualifications that he's probably more learned in the political process than the issues that the political process attempts to address.
That's just my cynical take. The reality is that it isn't the frontman who knows what he's doing--it's the advisors and think tanks standing behind him.
Now technically speaking, fluctuations in government spending and tax rates can lead to changes in GDP growth. Changes in regulations can play a big role in things like how much cash you carry on hand, or how much money you want to invest in a given market. In addition, it's the government's job to retain consumer and business confidence when the economy's struggling to avoid dropoffs in consumption (70% of GDP) and investment spending.
Unfortunately that last role means that if you're working for the Fed or the Executive Branch, your role is always going to be to act like the economy is doing fine. You don't want to stir a panic.
In sum it's probably more likely that the president will mess things up than fix things. Hence, George W Bush.
I will agree President Bush sure has messed the country up. As for recession, by definition we are not. Listen to the media, we are. What I want to hear from all is how do we get out of/avoid it?
Avoiding a recession is in one sense, quite easy, and yet nigh on impossible...
Consumer confidence plays a big part in any recession, if people believe one will happen, then it's much more likely to happen, this is why the media are very much to blame, their scaremongering to increase sales is causing a recession which will hurt them!
Best way to avoid recession is, in my uneducated mind, is to reduce the fiscal deficit by raising taxes and rebuilding the federal reserve, the weak dollar may be improving exports, but it means that the dollar is no longer the global currency, which is bad.
| deStructuralized wrote: |
Meanwhile, small business growth is at its lowest in 28 years, companies are laying off workers by the hundreds of thousands, and confidence is extremely low. What part of that doesn't scream "recession?" |
hundreds of thousands? While unemployment is still around (record lows of) 5% ??
Wow. Show some data to back up your lies, err, I mean claims. 
Error 404: Recession not found. High gas prices found. High housing prices found. High food prices found. Recession not found.I'm sorry, but this really goes with my point, so I felt obliged to post it:
http://www.economist.com/daily/kallery/displaystory.cfm?story_id=11294947
by Kal for [url="www.theeconomist.com"]The economist[/url]
I quite enjoy the comments here, note worthily:
| Quote: |
| The cartoon would be more accurate if the balloon was above the American consumer pulling him to his feet via a noose around his neck. The caption should then read "We got to do this just right!" |
| Quote: |
I really don't get what the Fed is doing on this one.
Inflation is clipping along in the form of high fuel and food prices, and encouraging people to borrow more with an already over-leveraged consumer just doesn't seem like a healthy strategy to me. |
and in reply to the above comment:
| Quote: |
it's basically a game of "pass the buck".
You're right that it's not a healthy strategy. Neither was baling out the mortgage companies, or the credit card companies. They are simply a way of prolonging the delay of the inevitable failure.
They do, however, realize that they've delayed so long now that when it happens, it's going to be catastrophic, and neither Party wants that. So they BOTH push for stop-gap measures, and hope that whenever the whole thing implodes, it'll be the *other* Party holding the Governmental reins at the time.
Just look at the current proposed legislation to "help consumers" with "fraudulent" credit card practices ... Seriously .. what the hell?? The Govt wasn't aware of this going on BEFORE now? Of course they were ... But now there's this HUGE spotlight on it, and they can't ignore it anymore. So they have to try and come up with a way to 1) help the companies, because if they don't, the economic is going to fall badly, and 2) because consumers expect the Govt to babysit them and make things right when they've overspent themselves. |
I quite enjoy the debate going on with the economist currently | bogger wrote: |
ok, so news is out!
http://www.bea.gov/newsreleases/national/gdp/2008/gdp108a.htm
America is not in a recession yet it seems. GDP increased again by 0.6% a measly, but not quite negative amount, as such, the USA is still not in recession..
Please note that these figures are both preliminary and seasonally adjusted (i.e. pure BS...) so ignore them until the actual figures come out, 29.05.08
Worryingly, however the Consumer price index (i.e. inflation) has increased by 3.5%... inflation > growth makes bogger unhappy. |
Oy, the inflation numbers are horrible. How are food prices across the pond? Up in Canada, the growth in our dollar nerf'ed it this year, but I am expecting to get hit hard this year. Do you think they will sneak the recession in like they did in 2000 (or how I feel they did) when they revised it quite a while later?P.S. to the thread that was opened and subsequently closed. A US recession would not last 5 years, more likely 1 to 2 max, pending some other disaster. I do agree though, the only thing that can fix it at this point is time. Feds are just trying to calm the masses...
I have no idea what recession even is. I'm going to look it up and do some research on it, but I do believe that the way things are currently set up in our government the president doesn't have really too much of an affect on our economy, but still I'll look up the word and find out what it means. Lol.
| thegoswebs wrote: |
| I have no idea what recession even is. I'm going to look it up and do some research on it, but I do believe that the way things are currently set up in our government the president doesn't have really too much of an affect on our economy, but still I'll look up the word and find out what it means. Lol. |
See my post above. http://www.frihost.com/forums/vp-760353.html#760353
@ lumberjack: it's a vicious circle, only propaganda or time can fix it! (propaganda, it just works).
| LumberJack wrote: |
| Do you think they will sneak the recession in like they did in 2000 (or how I feel they did) when they revised it quite a while later? |
I think that's illegal...think what you want. I happen to think that the economy is taking a downturn. As long as oil is reach the point of "the big turnover" the economy will continue to stall. The point of turnover is when it's a sellers gas market, rather than a buyer's gas market. Once that hits, we here in America are screwed first. Then the rest of the world. The two main issues Americans are facing is gas and health care. Those two things will be the driving force in slowing down our economy. If we can't fix those two issues fast, we are in a heap of trouble.
| BigMo420 wrote: |
| deStructuralized wrote: |
Meanwhile, small business growth is at its lowest in 28 years, companies are laying off workers by the hundreds of thousands, and confidence is extremely low. What part of that doesn't scream "recession?" |
hundreds of thousands? While unemployment is still around (record lows of) 5% ??
Wow. Show some data to back up your lies, err, I mean claims.
Error 404: Recession not found. High gas prices found. High housing prices found. High food prices found. Recession not found. |
Given that the United States' workforce size rounded out to about 153,100,000 in 2007, "hundreds of thousands" would actually be a conservative estimate. 5% of 153,100,000 is 7,655,000.
| Quote: |
| As of November 2007, at least 1,408,852 people have lost their jobs due to mass layoffs, a 6% increase from 2006, according to the Department of Labor’s Bureau of Labor Statistics. And that figure only reflects those who claimed unemployment insurance from employers who cut 50 or more employees at a time. |
Error 404: Your attempt to look smart by calling me a liar was not well founded. Did you mean to type something smart? Maybe you would like to take a look at:
| BigMo420 wrote: |
| deStructuralized wrote: |
Meanwhile, small business growth is at its lowest in 28 years, companies are laying off workers by the hundreds of thousands, and confidence is extremely low. What part of that doesn't scream "recession?" |
hundreds of thousands? While unemployment is still around (record lows of) 5% ??
Wow. Show some data to back up your lies, err, I mean claims. Rolling Eyes
Error 404: Recession not found. High gas prices found. High housing prices found. High food prices found. Recession not found. |
I would also be interested in seeing your sources for your statements, BigMo420.
| deStructuralized wrote: |
Did you mean to type something smart?
|
Thank you , but the intelligence of that post was merely coincidental destructuralizedI don't think that United States are going to be in recession. I am sure they have enough strong points in their economy to go through.
| bogger wrote: |
| Thank you , but the intelligence of that post was merely coincidental destructuralized |
Nothing coincidental about it; you clearly know what you're talking about, and while I think there might be more to a recessive economy than the technical definition, you provide a clear basis for your arguments without resorting to name calling
On another note, since there is heavy talk about statistics here, I think the following might interest some of you:
http://www.mindfully.org/Reform/2008/Pollyanna-Creep-Economy1may08.htm
www.shadowstats.com
I haven't read enough on this subject to completely defend what's written, and I actually disagree with some of the article. It's clearly got a leftist slant (what with being published in Harper's), which doesn't discredit it entirely, but might skew the presentation of certain facts.
Nevertheless, there are valid points to be made. The historical reconstitution of leading indicators such as GDP, unemployment, and the CPI is undeniable...what is up for debate is whether this has brought us closer to understanding reality. On a broader level, we need to ask ourselves what role politicians play in codified economic policy.while the points made there are good, I note that the change in unemployment is unchanged,
I've also been a fascist bastard, unrepentedly, from the economic side of things. So obviously I'm forced to dispute everything he says, and to insult the editor of that article as an idiot!
the prices are high, salaries remain the same, people can't afford stuff, the market dies, simple as that. What we need to do is invest in companies with good turn-a-rounds like pepsi or apple. shop for bargains, and, aside from saving a bit more, continue as normal. if we ignore the issue of a bad economy, it will likely repair itself. e conservative, not a hermit. the economy suffers from sudden changes, so it is best to conduct business like always.
the recission will become a very horrible thing in next 5 years with petrol prices soaring to new heights.
in 5 years, hopefully, I'll have moved to iceland, and will be laughing with my hydrogen powered car!
anywayz....
@thadnation, very good points! trying to buy bargains isn't always a good thing though, for the economy, it helps yourself, but generally not the country, as for most rich countries cheap = imported from Asia. This ruins the national terms of trade. The best thing you can do is buy local. This also helps the environment because of no shipping costs, but economically, who cares about that...
| bogger wrote: |
in 5 years, hopefully, I'll have moved to iceland, and will be laughing with my hydrogen powered car!
anywayz....
@thadnation, very good points! trying to buy bargains isn't always a good thing though, for the economy, it helps yourself, but generally not the country, as for most rich countries cheap = imported from Asia. This ruins the national terms of trade. The best thing you can do is buy local. This also helps the environment because of no shipping costs, but economically, who cares about that... |
very true. we should always buy american whenever possible. but with something like 70% of all products made in china, it really doesn't matter whether you buy cheap or not. nearly all national retailers use ruthless labor practices. the important thing is to BUY. when money is brought into the fat pockets of corporate conglomerates, some of it trickles down to ordinary people like you and me. like I said before, attempt to go on as normal. small, slight changes, nothing drastic. | thadnation wrote: |
very true. we should always buy american whenever possible. but with something like 70% of all products made in china, it really doesn't matter whether you buy cheap or not. nearly all national retailers use ruthless labor practices. the important thing is to BUY. when money is brought into the fat pockets of corporate conglomerates, some of it trickles down to ordinary people like you and me. like I said before, attempt to go on as normal. small, slight changes, nothing drastic. |
I agree, buying what's made in your country (wherever) helps put the most money directly back into the local economy; we won't get into foreign ownership, etc. I smiled at the intelligent dialog from most; emphasis on most I will work on backing up my opinion better with facts, too.you basically need to rely on local businesses. I advocate small changes. look at it this way. we eat out once every other month, usually getting sodas, but not always. if we cut out sodas more often thats 8 bucks saved, which is 48/year. not much, but considering the meal is about five bucks, you're now paying 20 dollars, instead of nearly 30. so now you can put away those extra 48, feel better, and that guy can still afford to take his daughter to a doctor, which ten bills the insurance company you happen to work for. the wealth keeps cycling, and everyone's happy. making small cuts that seem minor, but yet allow you to keep doing what you're doing. some things you can completely cut. we never turn on our a/c unless it's above 90 (and in wisconsin, that's rare) and the heat stays off unless it's below 53 degrees. our bill is 50 bucks, half of most people's. when it comes down to it, there's no one who can't survive, albeit a bit less comfortably.
| bogger wrote: |
while the points made there are good, I note that the change in unemployment is unchanged,
I've also been a fascist bastard, unrepentedly, from the economic side of things. So obviously I'm forced to dispute everything he says, and to insult the editor of that article as an idiot! |
US has always had an interesting way of calculating unemployment I think if it was calculating using what most of the world does, it would actually be worse.@lumberjack: yeah, you guys are crazy. Maybe someone could find a topic of someone calculating american unemployment using European standards? I'd say that if it differs, someone's measured it.
@thadnation: buy irish please? and sodas?
Recession avoidance doesn't happen if you pinch your pennies, you gotta spend more! recessions are reliant on low consumer confidence, talking about how to save money, is low consumer confidence!
| bogger wrote: |
@lumberjack: yeah, you guys are crazy. Maybe someone could find a topic of someone calculating american unemployment using European standards? I'd say that if it differs, someone's measured it.
@thadnation: buy irish please? and sodas?
Recession avoidance doesn't happen if you pinch your pennies, you gotta spend more! recessions are reliant on low consumer confidence, talking about how to save money, is low consumer confidence! |
you are right, but with people in position to lose their jobs we can't go crazy. all im saying (and have said for the last five posts!) is that one should make small, barely noticable changes. cutting out small thigns, as opposed to excluding markets. for example, Gm closed an assembly plant in janesville, wi. 6 percent of janesville is now unemployed. analyst are afraid that people will eat out less, and that plus the manufacturing comapnies suffering as a result of the closing will just make their economic situation worse. if they do like i do, they can still eat out | Quote: |
| Recession avoidance doesn't happen if you pinch your pennies, you gotta spend more! |
I can't help but agree. Think that is how the US managed to struggle its way out of the great depression of the thirties. The Government spent money on special projects. | deanhills wrote: |
| Quote: | | Recession avoidance doesn't happen if you pinch your pennies, you gotta spend more! |
I can't help but agree. Think that is how the US managed to struggle its way out of the great depression of the thirties. The Government spent money on special projects. |
ah yes, but back then everything was a "project", if you catch my drift.
</joke_only_funny_to_me> | thadnation wrote: |
| deanhills wrote: | | Quote: | | Recession avoidance doesn't happen if you pinch your pennies, you gotta spend more! |
I can't help but agree. Think that is how the US managed to struggle its way out of the great depression of the thirties. The Government spent money on special projects. |
ah yes, but back then everything was a "project", if you catch my drift.
</joke_only_funny_to_me> |
Agreed, I do catch the drift .... BUT .... to my mind the only thing that has changed is people who are more savvy at working the numbers. I did a course in invesments in 1996-1998 and there were certain predictors that we studied that indicated a major correction in world wide stock exchanges, and it never happened. There are no patterns any more as everything seems to be manipulated and controlled. What has happened for example with this enormous debt that is for real, but has not appeared in the press for a long looooooong while? Consider that the US Public Debt is currently 9.1 Trillion US dollars and the equivalent of 31,000US dollars per person in the United States!
More info at this link:
http://en.wikipedia.org/wiki/United_States_public_debt | deanhills wrote: |
| thadnation wrote: | | deanhills wrote: | | Quote: | | Recession avoidance doesn't happen if you pinch your pennies, you gotta spend more! |
I can't help but agree. Think that is how the US managed to struggle its way out of the great depression of the thirties. The Government spent money on special projects. |
ah yes, but back then everything was a "project", if you catch my drift.
</joke_only_funny_to_me> |
Agreed, I do catch the drift .... BUT .... to my mind the only thing that has changed is people who are more savvy at working the numbers. I did a course in invesments in 1996-1998 and there were certain predictors that we studied that indicated a major correction in world wide stock exchanges, and it never happened. There are no patterns any more as everything seems to be manipulated and controlled. What has happened for example with this enormous debt that is for real, but has not appeared in the press for a long looooooong while? Consider that the US Public Debt is currently 9.1 Trillion US dollars and the equivalent of 31,000US dollars per person in the United States!
More info at this link:
http://en.wikipedia.org/wiki/United_States_public_debt |
so fiscal responsibility only goes so far? is wealth really more virtual than tangible? | thadnation wrote: |
| so fiscal responsibility only goes so far? is wealth really more virtual than tangible? |
Think you will have to explain this question to me. Section by section ... think you have lost me, especially with the second question (but also the first). What is virtual wealth? Is that when it only appears on paper? And tangible wealth is when you put your cash in a box under your bed? But then the cash in the box was printed by the Government (if I got your meaning right), and the Government should not really be printing money as it is in the red by trillions, in fact somewhere it is recorded that there is a per capita running debt of 31,000US and of course growing.
So what portion of wealth is tangible? | deanhills wrote: |
| thadnation wrote: | | so fiscal responsibility only goes so far? is wealth really more virtual than tangible? |
Think you will have to explain this question to me. Section by section ... think you have lost me, especially with the second question (but also the first). What is virtual wealth? Is that when it only appears on paper? And tangible wealth is when you put your cash in a box under your bed? But then the cash in the box was printed by the Government (if I got your meaning right), and the Government should not really be printing money as it is in the red by trillions, in fact somewhere it is recorded that there is a per capita running debt of 31,000US and of course growing.
So what portion of wealth is tangible? |
you said that "the only thing that has changed is people who are more savvy at working the numbers." indicating that our economy could be in whichever state that analyst felt like portraying.
then you wrote, "certain predictors that we studied that indicated a major correction in world wide stock exchanges, and it never happened. There are no patterns any more as everything seems to be manipulated and controlled." this gives the impression that on a national scale, the only thing that matters is the government's influence as everything is controlled.
finally, you call attention to our debt which is never mentioned. you say though it is real, we tend to ignore it, which makes sense. it's not in good form to charge into the UN boasting "hey, our debt is 2/3 our gdp!"
what it boils down to is you say the economy no longer relies on principles, just on how the govt. manipulates it. so, i may employ 50,000 people (hypothetically speaking) yet the government could still make it look like we have a mostly unemployed area. so long as a few homeless are on the streets, the public will eat it up. therefore, the individual and their fiscal (financial) management has a realtively low impact overall.
this just made it sound (to me) like wealth isn't so much a possesion, so much as well, wealth. like it's smoke, floating around the way people want to spin it. perhaps im just pulling this out of my ass, but that's how i interpreted it. | thadnation wrote: |
| this just made it sound (to me) like wealth isn't so much a possesion, so much as well, wealth. like it's smoke, floating around the way people want to spin it. perhaps im just pulling this out of my ass, but that's how i interpreted it. |
Your interpretation of how I see it is spot on. Since you seem to have savvy knowledge, would like your comment on my interpretation. To my mind nothing is real. And that does not only go for the US, but perhaps you can comment on that what you are the most expert at. To me lots is contrived. The Government is pretty much sorted out how to get the right information to the people in order to pursue what they want to pursue. They have lobbyists, friends in the press, large corporations and sponsors to please and keep happy. | deanhills wrote: |
| thadnation wrote: | | this just made it sound (to me) like wealth isn't so much a possesion, so much as well, wealth. like it's smoke, floating around the way people want to spin it. perhaps im just pulling this out of my ass, but that's how i interpreted it. |
Your interpretation of how I see it is spot on. Since you seem to have savvy knowledge, would like your comment on my interpretation. To my mind nothing is real. And that does not only go for the US, but perhaps you can comment on that what you are the most expert at. To me lots is contrived. The Government is pretty much sorted out how to get the right information to the people in order to pursue what they want to pursue. They have lobbyists, friends in the press, large corporations and sponsors to please and keep happy. |
i ramble, but i get to the point, and hopefully some of my references make sense.
the thing to keep in mind is that there is a big difference between the individual, and the big picture. the individual's life can change quickly. layoff and bonuses cause us to fluctuate and rise and fall. but things stay the same, overall. this could be for many reasons. there is the belief that no matter what, things in nature must even out. there is the fact that the economy tends to cycle. or one could go with conspiracy theories. usually i take conspiracy theories with a grain of salt, but more and more often I must stop to consider how true they might be.
many people say that the government is indeed all-powerful, and the op-posers say that if it was, how would we be allowed to know? i answer, because ther are always leaks. we cannot stop piracy, because there's always going to be someone how get an advance copy who shouldn't. there will always be ex-govt officials that develope a conscious. this is really because no one can be all-powerful. which is why 18-year-olds with lots of time make things like digg.com. there are always kinks in the chain. so the government can't direct all the wealth, there will be little guys that get a share. you know, the government admits to scanning all net traffic. it has done so since 1997. but yet they don't catch all the cyber-crimes. yet when a litle guy does make it, they find that there's nothing waiting for them. people like brooke brodack can tell you this. everything eventually evens out, and everything falls into step.
but yet we are still a nation founded on free speech, and it is still approx. 30% free, after all the censoring/suing/etc.
so, to answer your question, i agree, mostly. the government controls the big picture, but not the individuals. we are independent entities, free to do what we want small scale. but for the sake of the big picture then yes, i agree.Many countries are worrying me about their economic situation: in Europe (Spain now for example has a very slow economic growth), in the USA.... Only Asia seems to have a durable increase of their economies
| thegoswebs wrote: |
| I have no idea what recession even is. I'm going to look it up and do some research on it, but I do believe that the way things are currently set up in our government the president doesn't have really too much of an affect on our economy, but still I'll look up the word and find out what it means. Lol. |
I learned all the theory about it, and after all the trouble, found that nothing followed the theory. I am very cynical about Government interference in the normal economic cycles.
Basically, recession is when too much money has been going round and the Government has to tighten its belt by printing less. So if there is less money, the interest rates go up. Also less demand for products. Manufacturers have to cut back. Construction slows. People are let go off. People cannot sell their houses. Cash is king. Stock exchange is supposed to dip during this time. Banking shares are usually attractive. Since cash is king.
That is theory however. We are in the middle of a Presidential election. Government may decide to print some more money shortly to get people more positive. Like giving a child who has been to the dentist a lollipop. The Federal Reserve Bank may make some good news statement as well. And the stocks will rally. Sentiment and self-interest. Probably good to check what the patterns were for the year of the previous presidential election. Possibly will be the same.That description of a recession is true for some scenarios but not for all. Rising oil prices, for example, can and have driven previous recessions despite monetary policy...
The basic definition of a recession is easy:
A period of economic decline - specifically a decrease in Gross National Product for two or more quarters.
| Bikerman wrote: |
That description of a recession is true for some scenarios but not for all. Rising oil prices, for example, can and have driven previous recessions despite monetary policy...
The basic definition of a recession is easy:
A period of economic decline - specifically a decrease in Gross National Product for two or more quarters. |
I always wonder at how they measure the GNP. Something is always included or excluded in a country's basket of goods for calculating the GNP. Think I am very cynical about most of these measurements. But obviously your definition is right on.
I also wonder that the price of petrol in the United States, a country who is importing so much oil from the rest of the world, is so much lower than for example in the UK and even lower than Canada's, who is exporting oil to the US. I am sure if someone who is knowledgeable on the number crunching that goes on behind the scenes, that it will all make sense. But I just wonder how many sins are hidden behind high petrol prices. | bogger wrote: |
@ lumberjack: it's a vicious circle, only propaganda or time can fix it! (propaganda, it just works).
I think that's illegal... |
Well that hasn't stopped bureaucrats before has it! I can't find any of the previous articles for you, because they are newspaper subscription sites, but here is google giving you the jist of it. Everyone always waits for the revised numbers to come out, if any.
http://news.google.ca/archivesearch?q=Revised+GDP+2000+Depression&btnG=Search&hl=en&um=1&ie=UTF-8 | LumberJack wrote: |
| http://news.google.ca/archivesearch?q=Revised+GDP+2000+Depression&btnG=Search&hl=en&um=1&ie=UTF-8 |
Thanks for the shortcuts! Had a look and wonder whether people are actually talking themselves into a depression too? I have been trying to get accommodation in downtown Vancouver for the summer, and it is totally booked out. And some of the prices are completely out of this world averaging (medium priced) 1800-3000 Cdn for monthly rentals. No doubt something to do with the Olympics too. But obviously people aren't tightening belts. Or who knows, maybe this is the last of the big spending Haha any thoughts now? dude, were screwed unless obama can do something...but on the other hand, everythings real cheap now! Uh, yeah.
Recession now.
Big time.
BIG, BIG, maybe depression sized recession.
I've always thought recession was, Bikerman said, two consecutive quarters of negative GDP, but there is an NBER agency which 'officially' decides when a recession starts. But they only decide much later.
They can decide it starts sooner, based on an unexpectedly large drop in economic activity, even if it's not quite negative -- but they won't do so until later.
So now, it's obvious to all, that the US and most of the world is going thru a recession.
For newspapers, it will be more like a depression, since the internet is killing the newspaper business.
For Big Banks, it will also be a depression, because there are too many banks.
Let me explain 'fictitious wealth' in a house value example. A 10 year old house is sold at a no-money down ARM 100% financing price of $200 000, in 2003. Two years later, a similar nearby house sells for $250 000, over 10% increase per year. The first homeowner is now $50 000 wealthier -- on paper. He can't really feel that wealth unless he refinances (home ATM), and buys stuff (maybe from China?). But he CAN stop saving anything else, and even max out his credit cards, since he has his 'house savings'.
But builders see that $200 000 houses are selling like hotcakes, so they build a mess of them.
And then, in 2006, they stop selling. And all houses at 'peak prices' stop selling, and those who 'need' to sell, perhaps because their ARM (adjustable mortgage) is going up, they drop the price.
And ALL all all house prices drop. The newly built, never lived, offered at $300 000, no $250, no $220k. The now 13 year old that was $200k in 2003, but $270k at start of 2006, back down to $240k, $220k, maybe even $200.
The $50k was fictitious wealth. Or, for the world, $50 trillion is now gone.
Everybody who had money, or savings, or investments, is now poorer.
We don't know if we're at the bottom.
Bu
