Economy numbers out today

[SUBMAN1]

Seems we still grew at 6/10ths of a percent for the first quarter. Looks like we will avoid a recession this year.

-S

[SUBMAN1]

I thought you guys would be happy to hear that the economy grew? Do you guys realize that this is 500% over expectation of all the doom and gloom sayers? There is no excitement over this? I thought its good news, but I guess no one cares.

-S

[Dowly]

Yaaay!http://planetsmilies.net/party-smiley-565.gif

[SUBMAN1]

Yaaay!http://planetsmilies.net/party-smiley-565.gifThat's what I thought! Its good for everyone. The US economy added $83,0620,950,000 to its economy in Q1 of 2008.

Bad news is, the US dollar is getting stronger.

-S

[Konovalov]

Great news and growth was ahead of expectations apparently too. 6 tenths of one percentage point GDP is absolutely stunning not. :-?

I still think that the US economy will move into a recession by the end of year. I say this because for a long period of time it has been consumer confidence and spending which has kept the economy moving forward. But consumer confidence has taken a bit of a hit recently. And just look at the banks shop windows. They are all encouraging people to save for a change and not spend.

http://news.bbc.co.uk/1/hi/business/7375522.stm

"We see very little reason for optimism, however. There are some very troubling signs in this report."

Consumer spending, which accounts for two-thirds of economic activity, grew at the weakest rate since the second quarter of 2001, the Commerce Department report showed.

It rose 1% after growing 2.3% in the fourth quarter.

"The outlook on the consumer side is still cloudy. There is no assurance that consumer spending is even steady," said Pierre Ellis, senior global economist at Decision Economics.

Spending on residential construction fell 26.7%, indicating the extent of the slowdown in the American housing sector.

High inventories also masked the true picture, other analysts said.

Stephen Malyon, senior currency strategist at Scotia Capital, said the GDP figures were a bit stronger than market expectations "but the strength is slightly misleading as inventories has accounted for 0.8% of the rise".

"Final domestic demand actually fell 0.4% underscoring the deterioration in the US economy, " he added.

Hardly confidence inspiring stuff. Uncertain times ahead as no one really seems to know how deep the credit crunch will run and how it will impact the global economy.

Hey Subman, what happened to you replying to that other thread as you said you would? This one in case you forgot: http://www.subsim.com/radioroom/showthread.php?t=135580&page=2

[SUBMAN1]

...Hardly confidence inspiring stuff. Uncertain times ahead as no one really seems to know how deep the credit crunch will run and how it will impact the global economy.

Hey Subman, what happened to you replying to that other thread as you said you would? This one in case you forgot: http://www.subsim.com/radioroom/showthread.php?t=135580&page=2It is confidence inspiring, and if the number of people in Loewe's the other day is any indication, great times ahead. All this doom and gloom stuff has going on for 2 years now and it has failed to materialize.

And on that thread - when I feel like it. Not high on the priority list right now, and besides, Letum already did a lot of my work for me by re-iterating my points. Thanks Letum!

-S

[Sea Demon]

Yaaay!http://planetsmilies.net/party-smiley-565.gifThat's what I thought! Its good for everyone. The US economy added $83,0620,950,000 to its economy in Q1 of 2008.

Bad news is, the US dollar is getting stronger.

-S

Come on Subman. We can't let the dollar bottom out. At any rate, it would also help us economically if we increased our own domestic supply of oil, by tapping our own domestic reserves. It's not going to help if gas prices continue to rise like they're doing. It's harmful to the country to leave those supplies untapped because of the stupid people in the environmental "global warming" movement and their fake/paid for issue.

[SUBMAN1]

Come on Subman. We can't let the dollar bottom out. At any rate, it would also help us economically if we increased our own domestic supply of oil, by tapping our own domestic reserves. It's not going to help if gas prices continue to rise like they're doing. It's harmful to the country to leave those supplies untapped because of the stupid people in the environmental "global warming" movement and their fake/paid for issue.I hear ya. We should tap our oil in AK for example, but this would be a band aid. Synthetic gas was on the plate in the 1980's, but was scrapped since it would cost about 2x what oil was selling for back then. Today, it would cost about $50 a barrel to make synthetic gas, but right now, that sounds pretty good!

Now why oil has been so cheap for the US for so many years? OPEC was waiting for the synthetic oil projects to be cut. They were, and now its 2008 and $114 a barrel.

Seems to me, those projects need to be revived.

As for the countries reserves, they shouldn't be touched except in time of crisis. Having expensive gas is not considered a crisis in my book.

-S

PS. Some non official info on it - http://en.wikipedia.org/wiki/Synthetic_fuel - You can get it even from coal, which the US has plenty of.

Several factors make synthetic fuels attractive relative to competing technologies such as biofuels (http://en.wikipedia.org/wiki/Biofuels), ethanol/methanol or hydrogen (http://en.wikipedia.org/wiki/Hydrogen):
The raw material (coal) is available in quantities sufficient to meet current demand for centuries
It can produce gasoline, diesel or kerosene directly without the need for additional steps such as reforming (http://en.wikipedia.org/wiki/Catalytic_reforming) or cracking (http://en.wikipedia.org/wiki/Cracking_%28chemistry%29)
There is no need to convert vehicle engines to use a different fuel
There is no need to build a new distribution network

[Sea Demon]

As for the countries reserves, they shouldn't be touched except in time of crisis. Having expensive gas is not considered a crisis in my book.

-S
I'll agree that those projects definitely need to be looked at again. Especially coal. As far as expensive gas goes, at some point the price of gas will hinder the ability to deliver goods and services across different sectors of the economy efficiently, and in a cost effective manner. At some point we could see downturns in investment which drive job growth and creation to become stagnant. And perhaps we'll see job losses. How much is a guess, but I can see where it could lead to a crisis if market forces do not correct to adjust for the increased prices at the pump. If we've got the resources, we should use them. Let the OPEC suppliers rot in hell.

[SUBMAN1]

I'll agree that those projects definitely need to be looked at again. Especially coal. As far as expensive gas goes, at some point the price of gas will hinder the ability to deliver goods and services across different sectors of the economy efficiently, and in a cost effective manner. At some point we could see downturns in investment which drive job growth and creation to become stagnant. And perhaps we'll see job losses. How much is a guess, but I can see where it could lead to a crisis if market forces do not correct to adjust for the increased prices at the pump. If we've got the resources, we should use them. Let the OPEC suppliers rot in hell.All true.

OPEC - can't agree more. I mean, look at their members. 99% of them hate the US, and then you wonder why we have $114 barrels of oil?

-S

[Konovalov]

OPEC - can't agree more. I mean, look at their members. 99% of them hate the US, and then you wonder why we have $114 barrels of oil?

-S

:rotfl: :rotfl: :rotfl: Oh heck.

99% of OPEC hate the US hence high oil prices. What a pile of poo poo. Don't be so simplistic. China, India for a start......

Off to watch Liverpool v Chelsea in the 2nd leg of the other Champions League semi-final before returning to this comedy.

[SUBMAN1]

...99% of OPEC hate the US hence high oil prices. What a pile of poo poo. Don't be so simplistic. China, India for a start......Sometimes things are that simplistic. If you want to get complicated, start reading up on the delisting of barrel prices based on supply. Also look at the people to the countries involved, from Chavez to Iran. All wonderful people! I would like to have lunch with them! :p

-S

[Konovalov]

...99% of OPEC hate the US hence high oil prices. What a pile of poo poo. Don't be so simplistic. China, India for a start......Sometimes things are that simplistic. If you want to get complicated, start reading up on the delisting of barrel prices based on supply. Also look at the people to the countries involved, from Chavez to Iran. All wonderful people! I would like to have lunch with them! :p

-S
The lack of supply is only one of many major factors influencing the high oil prices. It's not just as simple as you say. There is:
1. Supply shortage - caused mainly by industry underinvestment.
2. Slightly increased demand fueled by China, India and co.
3. War in Iraq, while instability in Nigeria due to ethnic tribal tensions have resulted in lower outputs.

[Fish]

Off to watch Liverpool v Chelsea in the 2nd leg of the other Champions League semi-final before returning to this comedy.


Bad outcome for me. :x

Fan of the Red's.

[SUBMAN1]

The lack of supply is only one of many major factors influencing the high oil prices. It's not just as simple as you say. There is:
1. Supply shortage - caused mainly by industry underinvestment.
2. Slightly increased demand fueled by China, India and co.
3. War in Iraq, while instability in Nigeria due to ethnic tribal tensions have resulted in lower outputs.I see you easily buy into hype.

1. No supply shortage exists. Prices are not based on Supply at all.
2. Fuel demand hasn't changed in 50 years, growing at an average rate of about 1% per year for as long as most of us have been alive. This includes Chinas increased demand for fuel.
3. There has never been peace in the middle east and hostilities have never affect prices before.

Skybird can explain it to you in detail since I do not have time, but it is clear that you do not understand what is going on. Ask him. I'm sure he will oblige.

-S

[PeriscopeDepth]

For those looking for numbers, may I suggest:
http://www.eia.doe.gov/international/

PD

[mookiemookie]

1. The economy is in a recession. The old "two quarters of negative GDP" blah blah, is not the hard and fast rule of determining recessions. According to the NBER, the group who officially determines start and end dates of recessions, the definition is a "significant decline in economic activity spread across the economy, lasting more than a few months."

This is from NBER:

"Most of the recessions identified by our procedures do consist of two or more quarters of declining real GDP, but not all of them. Our procedure differs from the two-quarter rule in a number of ways. First, we consider the depth as well as the duration of the decline in economic activity. Recall that our definition includes the phrase, "a significant decline in economic activity." Second, we use a broader array of indicators than just real GDP. One reason for this is that the GDP data are subject to considerable revision. Third, we use monthly indicators to arrive at a monthly chronology."

To cement the fact even further, when GDP grows less than the population growth rate, currently at 1-1.5% a year, the economy needs to grow at least that much to even stay in place or else GDP per capita declines. I.e. recession.

2. Oil prices are being bid up in no small part due to hedge funds/pension funds/banks, etc looking for returns outside of the stock and bond markets. Consider the fact that "Crude oil futures had the highest volume of commodity futures contracts from January - October 2007 at 101.5 million contracts traded. That was an increase of 79 percent over the previous year." (source: http://commodities.about.com/od/researchcommodities/a/volume-2007.htm)

Speigel had a great article a while back about this. This chart says it all:

http://www.spiegel.de/img/0,1020,1110230,00.jpg

http://www.spiegel.de/international/business/0,1518,538412,00.html

[SUBMAN1]

Oh, so a recession is somebody's idea on a whim? I don't buy that. Its a hard statistical number that is based on GDP. Always has been, always will be unless someone is trying to twist the numbers or definition for some reason.

Slowed economic growth does not count. That is still growth. .6% would be decent growth in Europe for example. In the US, it's only so so, but still OK.

By the way, has the NBER called this a recession? I beleive they have not. Only the media has.

-S

[Konovalov]

I see you easily buy into hype.-S
Nope. I just don't buy into your bull spin.

[SUBMAN1]

I see you easily buy into hype.-S Nope. I just don't buy into your bull spin.:rotfl::rotfl::rotfl: I thought it was you spinning bull! Maybe you are spinning the spin? :D

-S

[Konovalov]

Skybird can explain it to you in detail since I do not have time, but it is clear that you do not understand what is going on. Ask him. I'm sure he will oblige.

-S
Indeed he did in this thread (http://www.subsim.com/radioroom/showthread.php?t=136087)by saying the below:
I think emerging powers, rising oil and food prices, and Iraq are all tied together. Definitely the first three. As people get richer, they eat more meat and burn more oil. Hence our present situation. I think the current mess in Iraq is a accelerating factor, but not a cause.
Stiglitz, whom I mentioned before, and who is referred two in another current thread, totally disagrees, pointing out that before the Iraq war the prognosis on oil prices expected them to be stable at around 25-35 US$ for longer time to come - increased world demand and raised demand in China and India already calculated in. The explosive multiplication of oil prices he directly attributes to the Iraq war.
That covers the bit I mentioned about the war in Iraq. Doesn't quite support your argument now does it? Who is laughing now. :roll:

[mookiemookie]

Oh, so a recession is somebody's idea on a whim? What that somebody is the NBER, it is.

Wikipedia: Simon Kuznets (http://en.wikipedia.org/wiki/Simon_Kuznets) was working at the NBER when the U.S. government asked him to help organize a system of national accounts (http://en.wikipedia.org/wiki/National_accounts) in 1930 (http://en.wikipedia.org/wiki/1930), which was the beginning of the official measurement of GDP (http://en.wikipedia.org/wiki/GDP) and other related indices of economic activity. Due to its work on national accounts and business cycles (http://en.wikipedia.org/wiki/Business_cycle), the NBER is well-known for providing start and end dates for recessions (http://en.wikipedia.org/wiki/Recession) in the United States.
And why does analyzing a broader set of economic indicators than GDP alone makes it a "whim?"

I don't buy that. Its a hard statistical number that is based on GDP. Always has been, always will be unless someone is trying to twist the numbers or definition for some reason.
Well, according to the NBER, whos been doing this since 1930, it's not. And since they're kind of the official arbiters of business cycles, I'm going to go with them.

The NBER does not define a recession in terms of two consecutive quarters of decline in real GDP. Rather, a recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. For more information, see the latest announcement on how the NBER's Business Cycle Dating Committee chooses turning points in the Economy and its latest memo, dated 07/17/03.


Slowed economic growth does not count. According to them it does. Again, I'll stick with the experts.

.6% would be decent growth in Europe for example. In the US, it's only so so, but still OK.
You're missing the point. It's still below the population growth rate. That means that GDP growth per person has shrunk. Not slowed down, but shrunk. And it's been shrinking since 4Q07.


By the way, has the NBER called this a recession? I beleive they have not. Only the media has.
They call it after the fact, not during.

NBER:

The determination that the last contraction ended in November 2001 is the most recent decision of the Business Cycle Dating Committee of the National Bureau of Economic Research. Announcement dates:
The November 2001 trough was announced July 17, 2003. (http://www.nber.org/cycles/july2003.html)
The March 2001 peak was announced November 26, 2001. (http://www.nber.org/cycles/november2001/)
The March 1991 trough was announced December 22, 1992. (http://www.nber.org/March91.html)
The July 1990 peak was announced April 25, 1991. (http://www.nber.org/cycles/april1991.html)
The November 1982 trough was announced July 8, 1983. (http://www.nber.org/cycles/july1983.html)
The July 1981 peak was announced January 6, 1982. (http://www.nber.org/cycles/jan1982.html)
The July 1980 trough was announced July 8, 1981. (http://www.nber.org/cycles/july1981.html)
The January 1980 peak was announced June 3, 1980. (http://www.nber.org/cycles/june1980.html)
By any measurement that they look at, it's clear that the economy is in a recession. The only question left now is how deep and how long.

[SUBMAN1]

Skybird can explain it to you in detail since I do not have time, but it is clear that you do not understand what is going on. Ask him. I'm sure he will oblige.

-S Indeed he did in this thread (http://www.subsim.com/radioroom/showthread.php?t=136087)by saying the below:
I think emerging powers, rising oil and food prices, and Iraq are all tied together. Definitely the first three. As people get richer, they eat more meat and burn more oil. Hence our present situation. I think the current mess in Iraq is a accelerating factor, but not a cause. Stiglitz, whom I mentioned before, and who is referred two in another current thread, totally disagrees, pointing out that before the Iraq war the prognosis on oil prices expected them to be stable at around 25-35 US$ for longer time to come - increased world demand and raised demand in China and India already calculated in. The explosive multiplication of oil prices he directly attributes to the Iraq war. That covers the bit I mentioned about the war in Iraq. Doesn't quite support your argument now does it? Who is laughing now. :roll:No - that is Skybird changing his story from one day to the next, if it makes the US look bad. Here is what I was refering to:

http://www.subsim.com/radioroom/showthread.php?t=131843&

-S

[Platapus]

OPEC - can't agree more. I mean, look at their members. 99% of them hate the US, and then you wonder why we have $114 barrels of oil?

Perhaps a little less paranoia and a little more research instead?

OPEC consists of Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela.

Of those 13 only two "hate" us and those would be Iran and Venezuela two countries we seem to be going out of our way to antagonize. That would be 15% not 99%. Iraq, we invaded so they are up in the air. Only time will tell whether the United States will allow the "free" government of Iraq to do anything other than our bidding. As for the other 11? We either have friendly or neutral relationships with them.

The price of oil is rising for many complicated reasons. The emotional feeling that "they" hate us is not one of them.

[VipertheSniper]

Oh, so a recession is somebody's idea on a whim? I don't buy that. Its a hard statistical number that is based on GDP. Always has been, always will be unless someone is trying to twist the numbers or definition for some reason.

Slowed economic growth does not count. That is still growth. .6% would be decent growth in Europe for example. In the US, it's only so so, but still OK.

By the way, has the NBER called this a recession? I beleive they have not. Only the media has.

-S

0.6% Decent growth in Europe? You've got to be kidding me... I think the lowest we had in our country in the past few years wasn't below 1% and it still was alarming economists, but I guess it's easier to live with your rose tinted glasses on.

[SUBMAN1]

0.6% Decent growth in Europe? You've got to be kidding me... I think the lowest we had in our country in the past few years wasn't below 1% and it still was alarming economists, but I guess it's easier to live with your rose tinted glasses on.Considering the EU sees 2% as phenomenal, then .6 is still decent there, so you tell me?

-S

[Konovalov]

0.6% Decent growth in Europe? You've got to be kidding me... I think the lowest we had in our country in the past few years wasn't below 1% and it still was alarming economists, but I guess it's easier to live with your rose tinted glasses on.Considering the EU sees 2% as phenomenal, then .6 is still decent there, so you tell me?

-S
When did the EU or a member of the EU describe 2% GDP growth as "phenomenal"?

[mookiemookie]

0.6% Decent growth in Europe? You've got to be kidding me... I think the lowest we had in our country in the past few years wasn't below 1% and it still was alarming economists, but I guess it's easier to live with your rose tinted glasses on.Considering the EU sees 2% as phenomenal, then .6 is still decent there, so you tell me?

-S
GDP growth rates for the EU 25 going back to 1970

http://www.swivel.com/graphs/image/18777540/default/600/337/ignore/absolute/LineGraph/ALPHABETICAL/all+time/yearly/ignore?s=1209681946?

and in table format:

http://www.swivel.com/graphs/spreadsheet/18777540?per_page=50

[mookiemookie]

http://money.cnn.com/2008/12/01/news/economy/recession/?postversion=2008120115

Sorry to necro this thread, but I just wanted to say...."TOLD YA SO!" :p