SUBSIM Radio Room Forums - Economy numbers out today

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- - Economy numbers out today (https://www.subsim.com/radioroom/showthread.php?t=136062)

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

PD

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:

Quote:

"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/rese...olume-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/...538412,00.html

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

Quote:

Originally Posted by SUBMAN1

I see you easily buy into hype.-S

Nope. I just don't buy into your bull spin.

Quote:

Originally Posted by Konovalov

Quote:

Originally Posted by 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

Quote:

Originally Posted by 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 by saying the below:

Quote:

Originally Posted by Skybird

Quote:

Originally Posted by Tchocky

Quote:

Originally Posted by PeriscopeDepth

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:

Quote:

Originally Posted by SUBMAN1

Oh, so a recession is somebody's idea on a whim?

What that somebody is the NBER, it is.

Wikipedia:

Quote:

Simon Kuznets was working at the NBER when the U.S. government asked him to help organize a system of national accounts in 1930, which was the beginning of the official measurement of GDP and other related indices of economic activity. Due to its work on national accounts and business cycles, the NBER is well-known for providing start and end dates for recessions in the United States.

And why does analyzing a broader set of economic indicators than GDP alone makes it a "whim?"

Quote:

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.

Quote:

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.

Quote:

Slowed economic growth does not count.

According to them it does. Again, I'll stick with the experts.

Quote:

.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.

Quote:

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:

Quote:

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.
The March 2001 peak was announced November 26, 2001.
The March 1991 trough was announced December 22, 1992.
The July 1990 peak was announced April 25, 1991.
The November 1982 trough was announced July 8, 1983.
The July 1981 peak was announced January 6, 1982.
The July 1980 trough was announced July 8, 1981.
The January 1980 peak was announced June 3, 1980.

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.

Quote:

Originally Posted by Konovalov

Quote:

Originally Posted by 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 by saying the below:

Quote:

Originally Posted by Skybird

Quote:

Originally Posted by Tchocky

Quote:

Originally Posted by PeriscopeDepth

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.

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/show....php?t=131843&

-S

Quote:

Originally Posted by SUBMAN1

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.

Quote:

Originally Posted by 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.

Quote:

Originally Posted by VipertheSniper

Considering the EU sees 2% as phenomenal, then .6 is still decent there, so you tell me?

-S

Quote:

Originally Posted by SUBMAN1

Quote:

Originally Posted by VipertheSniper

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"?

Quote:

Originally Posted by SUBMAN1

Quote:

Originally Posted by VipertheSniper

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/1...?s=1209681946?

and in table format:

http://www.swivel.com/graphs/spreads...40?per_page=50

http://money.cnn.com/2008/12/01/news...ion=2008120115

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