There is still no recession

Discussion in 'Politics, Religion, Social Issues' started by squeeks, Aug 28, 2008.

  1. squeeks macrumors 68040


    Jun 19, 2007
  2. Desertrat macrumors newbie

    Jul 4, 2003
    Terlingua, Texas
    Trouble is, while all sorts of things are corrected for inflation, GDP is not. The GDP number grows, but it's a bunch of people spending more and getting less for it. Food, transportation fuel and heating oil, anything made with steel, stuff like that.

    So if you spend more and get less, how are you better off? Supposedly, an increasing GDP is a measure of "better-offness", even though it includes spending for such things as repair of Katrina damages...

    Believe what you want. We all know that no government would ever con anybody.

  3. kavika411 macrumors 6502a


    Jan 8, 2006
    Let the countdown to the stripping of the definition of "recession" begin.
  4. pseudobrit macrumors 68040


    Jul 23, 2002
    Jobs' Spare Liver Jar
    GDP numbers are cooked. If you take out the stimulus checks and inflated monetary supply, we're still moving backward. We've been moving backward since at least the first quarter of 2008, and it's going to take a lot longer to bounce back. The markets are light on volume. Too much volatility. Investors are spooked.

    We have about $2 trillion in overpriced real estate that will deflate. That's going to take a lot longer to sort itself out than what happens with a standard recessionary market.
  5. iShater macrumors 604


    Aug 13, 2002
    +1 to all the wise ones at MR.

    We are sinking, albeit at a slower rate than expected. The question is how long this is going to take, and when will inflation kick in where it makes our lives miserable.

    Or I should say MORE miserable. :eek:
  6. Rodimus Prime macrumors G4

    Rodimus Prime

    Oct 9, 2006
    umm the Media stop caring about the truth a LONG TIME ago.

    I read an article I believe on CNNMoney last week that one thing that it pointed out is yes we are in a slow down. But it is not as bad as it looks. The media is making it out to be a lot worse than it really is. most people are doing just fine. Heck the average American making the MEDIUM income level life has improved since 2001 and make more money inflation adjusted. The high end of the pay scale has dropped a lot screwing up the average when you adjust for inflation.

    Also does it sell putting stories out about how most people are doing just fine. instead they cherry pick the ones that make things look bad.

    But like I said when was the last time the Media cared about the real truth instead of how to make a buck.

    They are already seeing indicators of inflation slowing down. The stimulus checks caused part of them. The dollar dropping like a rock did not help. now that the dollar is getting stronger, the stimulus checks are spent, fed not lowering interested rates and making threats of raising it, the credit crunch effects starting to kick in on the money. Inflation is starting to slow down a lot. Now that spending power is getting more tied to income instead of credit it should help quite a bit.
  7. pseudobrit macrumors 68040


    Jul 23, 2002
    Jobs' Spare Liver Jar


    This is bull. The financial news is full of bottom calls and positive signs. Bernanke and Paulson are quoted at length each and every time they open their mouths to voice positive spin.

    No, here's what's happening (listen to fund managers):

    -Asset deflation in real estate. Puts us at risk of widespread deflation, which is the purest poison to growing an economy. So the Fed keeps rates low and monetary inflation high. They're watching wages to make sure they don't follow and trigger a spiral. But in the meantime, they keep printing money to cushion the losses in property values.

    The dollar bump is anomalous. It will continue to trend downward over the next several quarters. This is good for U.S. exports. A stronger dollar will abort the weak dollar-inspired increase in manufacturing exports.

    The commodities selloff is overdone, but the bubble was overdone, too. Markets are shaky and risky. Cash is king right now, as long as you don't get tempted by any of the apparent "deals" out there (like when those tech stocks crashed down 80% off their highs and found momentary support before proceeding to bagel land).

    The credit and banking problems are far from over. Banks are facing severe liquidity crises and are borrowing wheelbarrow-loads of cash from the Fed to cover their souring derivatives contracts. The SEC's short-sell ban on selected securities created a pocket of air under the financials which kept their equity prices artificially high for too long and inhibited market makers from pricing in the risks to these institutions. Fannie and Freddie will almost surely be killed off.

    This market is still $2T heavy and it's going to starve (slowly, since real estate takes much longer to unwind than losses through other vehicles) until it gets to a healthy weight.
  8. pseudobrit macrumors 68040


    Jul 23, 2002
    Jobs' Spare Liver Jar
    Because I can't stress this enough, it gets its own post:

    The real danger to our economy is deflation, and in spite of all the talk of inflation being out of control and sinking us, we are at very serious risk – only one or two misguided manoeuvres away – from slipping into a deflationary situation.
  9. toontra macrumors 6502

    Feb 6, 2003
    London UK
    A Bank of England advisor broke ranks yesterday to say exactly this - the obsession with controlling inflation was in imminent danger of steering the UK economy into a deep and lasting recession (albeit with projected inflation rates of under 1%).

    No link to be found - this was an exclusive on BBC Newsnight.
  10. Desertrat macrumors newbie

    Jul 4, 2003
    Terlingua, Texas
    Dunno if this will help, but when the economist types talk about "deflation", they're referring to asset prices, tied to lessened availability of credit. There are two types of "inflation": One is the money supply--which is still growing at an estimated 15% per year, and the other is consumer prices.

    Consumer prices, depending on whether you look at offical federal numbers or listen to your wife after a shopping trip, are rising at a rate somewhere between six percent and maybe ten percent. "" is probably the best indicator. At least Williams shows how he gets the number.

    Historically, the rise in consumer prices--the common usage of "inflation"--tracks the rise in money supply, lagging by a year or three. M3 has been rising at 15% and more for a good number of years, now.

    As far as folks being well off, a recent analysis claimed that when corrected for inflation, the median income had dropped. Roughly $2,000; from around $53,000 per year to $51,000 per year. (No link; an Agora email a day or three back.)

    There are numerous indicators for "Hard times": E.g., more use of credit cards for groceries, because people don't have the ready cash. More prime loan mortgages either delinquent or going to foreclosure. More personal property being offered for sale: ATVs, bass boats, 2nd or 3rd cars/trucks. Hock shops are doing a booming business.

    IMO, this dollar rise against other currencies is a short-term event. Same for lower commodity prices.
  11. stubeeef macrumors 68030


    Aug 10, 2004
    A bump from stimulus checks? Why that sounds so capitalistic! Oh my!!!!

    I wonder what would happen if taxpayers got to keep more money and stimulate the economy with it? Hmmmm
    I wonder if anyone ever tried that successfully?

    looky here and see
  12. solvs macrumors 603


    Jun 25, 2002
    LaLaLand, CA
    I don't care what they call it, things are not good. Just look around. People are struggling right now. Prices are going up while wages really aren't. The stimulus check did a little help in the short term, but it really didn't help much overall. Most are using it to pay off bills. The middle and lower classes are hurting, and how anyone can claim they aren't, I just don't understand. You must not be paying attention, and/or you make a lot more than the rest of us in a job that isn't in danger of being lost at any time soon.

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