The economy is no longer contracting

[nadinbrzezinski]

http://www.bea.gov/national/nipaweb/TableView.asp?SelectedTable=1&FirstYear=2008&LastYear=2009&Freq=Qtr

Yes, it did grow in the third quarter... this is GOOD news... so pay attention to this ok.

Are we still in a recession? You betcha.

It is a bad one? Sure it is.

Are jobs going to be on the positive next week? No... but has the decline slowed down? Yes.

In my view they will continue on the gloomy side for a while to come... and that has implications for the 2010 mid terms, but things, the LEADING indicators, are starting to show signs of life.

Do we need another stimulus? Yeah. Not counting on it, but by any definition of this, aka standard definition we never reached a depression level. And that is ... a GOOD THING.

Just a little reality...

Oh and could this still go for double dip? Yes the possibility is there... and I am hoping, for our sakes, it does not.

[Capn Sunshine]

1. good news doesn't play well here in GD

apocryphal lamentation, that's where it's at. Don't you know we're DOOOOOOOMED

[nadinbrzezinski]

3. Well I was one of the greatest doomsayer on the way down

I admit, I did expect a depression, that is what the indicators pointed to in the middle of it, as in how fast they were going down... I mean by the trend in the worst of it we would have hit the 10% contraction easy... I thank my lucky stars (and a little Keynes) we did not.

But you are right.

Let me join you.

THE SKY IS FALLING WE ARE DOOOOMMMEEEEDDDDDD!!!!!!!!!!

[Capn Sunshine]

6. DOOOOOOOMED

lol right on, bro

[Better Believe It]

69. Come on now .... sing along with me! Ahhh one and a two and a three ....

http://www.smart-central.com/happydays.htm

Why so gloomy? Put on your smiley face!

Whooppeee!

[CaliforniaPeggy]

2. Some good thoughts...

I'm holding onto them.

K&R

[Capn Sunshine]

4. That's right, Peggy!

forgive my snark. Things are starting to turn around. :)

[CaliforniaPeggy]

5. Snark all you want!

I was rather amused to see your remarks next to mine!

Classic DU!

Who knows which one of us is right?

:pals:

[FarLeftFist]

7. The recession was manufactured by the media.

90%

[nadinbrzezinski]

8. No it was not

I guess the unemployment numbers are also manufactured?

:banghead:

[FarLeftFist]

16. The media over-sensationalized the crisis as usual

And businesses and consumers bought into the fear. Without the fear this recession wouldn't have looked so scary. 10% unemployment=90% employed (who are eligible for employment). Recessions often happen in capitalist societies like ours because greed fuels speculation instead of supply and demand, so of course businesses will over-produce, call it speculation or maybe just superstition and wishful thinking, then when there is too much supply instead of demand the economy enters a lull or a recession, factories slow down, workers are laid off, until the engines start revving again. I'm not saying the economy wasn't shitty, It most definitely was, but think of how many jobs, especially from small businesses were lost due to the media's fear-mongering. It's funny how the economy seems to be it's own living, breathing entity that no one can seem to figure out. Even experts on the economy can only make speculations, there's no definitive answer or solution.

[nadinbrzezinski]

19. Them statistics are not with you

in fact the media tried to sell a shit sandwich because Bush was still in power.

[FarLeftFist]

30. They're over-sensationalized.

That's my new word for 2010. Sensationalized. My point is the media is so cliche, we all see right through their BS but it's like a trainwreck. We know how they will sell or spin every story before they even know. We already know what the RW will say and how the LW will respond. It's a political reality show. Its 'Real World DC'. The fact of the matter is every pundit or "strategist" nowadays seems to believe once the camera's rolling they are suddenly experts on any given subject and their opinion's are worth their weight in gold, everyone is stepping up and acting like Indian Chiefs now more than ever instead of just the Indians they used to be, because secretly, and sometimes not so secretly, the RW feels our president is an illegitimate one and they feel the need to disregard every one of his actions and decisions because they are in survival mode. This past election came damn near close to making the republicans an endangered species, so they will do everything in their power to stay alive.

[nadinbrzezinski]

32. SHH this is why you go and find the NEBR and check the data YOURSELF

Oh like I have been doing for years...

[HamdenRice]

68. I kind of agree

There were serious underlying problems, like over indebted consumers, a spike in energy prices that destroyed family budgets, an initial foreclosure crisis, etc. -- and then a near catastrophic near death financial collapse.

But if you look at the time line, the massive layoffs came after the financial crisis was brought under control.

This was not a classic recession by any means. It was not caused by a build up of inventories and lagging consumer demand.

This was, however, a classic financial and economic panic -- something we had not seen since the 1929 through the 30s, and before that, the late 1800s, so to a certain extent it was a media created recession, to the extent that the media helped spread the fear.

Of course just because it was created by a panic doesn't mean that it isn't real. It has become real. Now we are in a classic Keynesian "low equillibrium" trap in which fear, led to layoffs, led to low demand, led to decreased sales of everything, led to more layoffs, etc. These are very difficult to get out of, compared to a typical post war excess inventory led recession.

But I think it's worth pointing out just how different it was from recent post war recessions, and how much fear played a role in it, which is why the federal government's counter-cyclical policies were so important in preventing a depression.

[JeffR]

18. Preposterous contention.

Certainly the media has sensationalized it, especially because the president is a Democrat and his party holds majorities in Congress, but "manufactured"? Not hardly.

[Sinti]

9. I think that double-dip depends on how grasping and greedy

our owners choose to be. OTOH, President Obama is having a summit of some sort on this. They may come out with some good ideas. I still think zero or extremely low-interest loans and/or grants after the upcoming infrastructure rebuilding project(s) would be a great help, especially in green tech and sustainable clean industries. The problem is all the money is at the top, still.

[nadinbrzezinski]

11. Well yes, we are talking John Maymard Keynes

and 'eep the foot on the damn accelerator.

:hi:

Good news this is not a depression

but on the other hand I think some of them top guys were not sufficiently scared.

[Sinti]

36. I'm personally feeling optimistic, ATM

but that doesn't mean I'm right. I just want to avoid the revolution that will come if they don't straighten out - less death is always the best route for everyone, IMO. I think we need systemic change to fully sort, maybe we'll get it. It's been a long time coming. :)

[nadinbrzezinski]

41. Oh I get that truly

hugs

[anonymous171]

10. Employment is the only thing that matters right now. nt

[Think-Its-Patriotic]

12. There's a big difference between "not contracting" and "recovering"

For example, me finding a full-time job. It's been terrible out there.
And the thing that really cheeses me off is people complaining that Obama is "not doing anything" and "taking too long." Even Democrats. Seriously! 8 years of Bush breaking the foundation of the strong Clinton economy, a huge war, gutting regulation, and Obama can't wave a magic wand fast enough. It takes time!
But I'd still like it a little faster!

[CaliforniaPeggy]

14. Welcome to DU!

:hi:

[nadinbrzezinski]

21. Oh and what she said, sorry

[nadinbrzezinski]

15. Knowing how this works

we have gone from 900,000 negative job growth to 200,000... and I do not foresee it going into the positive numbers before the 2010 midterms. It is a sucky economy and employment always leads on the way in and always lags on the way out. A second stimulus may accelerate this.

It does not make it easier if you are looking for a job, not saying that... but faster we will need a second stimulus.

[FarLeftFist]

24. True, after 8yrs of Bush destroying the foundation of our economy and dis-regarding the Constitution

I personally think it would take about 5 yrs to fix 8 yrs of destruction. It would have been nice if Bush left us with some money in the bank in case we have an emergency crisis like, I don't know....Hmmm, maybe a recession or something?!

[reflection]

46. Welcome to DU, Think!

:fistbump:

[renate]

49. welcome to DU!

:hi:

And good luck finding a full-time job. I hope you get to see a little chunk of the recovery soon yourself!

[Truth2Tell]

13. Must be that bank bailout finally kicking in.

:eyes:

[nadinbrzezinski]

17. actually NO, this is a direct consequence of the STIMULUS package

two separate issues.

[Truth2Tell]

20. If you say so. nt

[nadinbrzezinski]

22. You think they are the same thing? Ok

if you believe so we have nothing more to say to each other.

[Truth2Tell]

31. I don't believe they are the same thing.

But neither has had any real measurable effect on the American economy so they might as well be. The collapse continues unabated. The only question left to ask is how many people will continue to say it's not happening as it happens right before their eyes.

[nadinbrzezinski]

34. Thats the point, the ECONOMIC STATISTICS are not with you

oh wait....

THE SKY IS FALLING WE ARE ALL DOOOMMMMEEED.

And for the damn record the trends when this started said collapse... the trends right now say WEAK recovery.

I guess we are done.

[Truth2Tell]

51. Shall we revisit this discussion in one year?

I'll bet my last Dollar that in one year the economy will be farther in the tank, and additionally that you and others like you will STILL be saying that we are on the verge of a recovery. And one year after that? Same exact bet, double or nothing. Deal?

[nadinbrzezinski]

54. I was one of the doom sayers on the way down

I guess I can interpret Economic statistics.

There is more... I am going to tell you this NOW.

JOBS are not going to have a stellar recovery... and if they are under 10% by the midterms I will be shocked and surprised. THough that MIGHT happen if they decide to do what they NEED TO FUCKING DO, and that is a second, and quite more robust, stimulus package, Keynes and all that.

That does not mean we are in the middle of a depression m'kay. Now some of you folks, for ideological reasons, want and desire a total collapse. Well then that ain't gonna happen.

[Truth2Tell]

59. Cheapest straw man out there: Accuse those who

believe things are getting worse of wanting a collapse.

You may have predicted this fall, like many of us, but you were also pimping the Wall Street bailout hard, as I recall. How'd that work out? Or is your position that secret awful things would have happened had we not done it?

What do you think caused this economic "downturn?" Just the housing bubble? Just some shifting trends? I'm curious what you believe has fundamentally changed with our economy since, say, two years ago? What will now make it go back up? Surely not just a tad more government spending - like the stimulus barely even big enough to have a statistical impact?

Even if we were to launch into Keynesian overdrive and stimulate like mad (which is fine with me) that still wouldn't negate the larger, more overwhelming fundamental issues driving our economy down. Examples: the ongoing massive movement of capital and resources offshore, or the overprinting of Dollars, or the waste of billions on war, or the creation of massive derivatives bubbles and phony financial instruments, etc etc etc.

If we don't fix any of that stuff then all the stimulus in the world is only going to buy you a nice meal on the deck of the Titanic.

[nadinbrzezinski]

60. Some folks here do, and that is a fact

And I expected it at the worst moment of the crash as well. GNP was contracting at a high rate POINTING by extrapolation to a depression. Which by the way we got close to... and I am talking about the technical definition of one.

And if you think all I think needs to be done is a stimulus you are dead wrong, but a stimulus is needed as part of a multi response.

Hells bells in a major crash we just didn't deal with patients, but also with transport, and traffic control and at times haz mats and fires... well think about this the same way.

[Truth2Tell]

63. So if what's needed is a multi response..

then how is it that you think things have turned, when in fact there has been no multi response?

What has caused the other bigger negative factors to turn positive, if you believe they have? And if they haven't, then how do explain this potential "recovery" that you imagine happening? The consumer credit bubble hasn't even begun to implode yet and it's way uglier than the housing bubble was (and still is). And the derivatives catastrophe has only been temporarily averted, not prevented. And our huge debt is still sitting there and growing. And capital and jobs are still leaving. How do you see any of this changing to enable this recovery you predict? :shrug:

[nadinbrzezinski]

65. We have had a multi response

not as robust as it should be.

And again these are the STATISTICS... that tell me things ARE STARTING TO TURN.

I am not going to go as far a the NEBR that declared it over...

I know economic statistics are difficult to understand, and most people fix their eyes on wall street and employment

Well wall street is NOT an economic indicator and employment is well... LAGGING

[Truth2Tell]

70. I agree that Wall Street is not a reliable indicator

of economic strength. Nor employment. Nor GDP.

You keep mentioning these all caps STATISTICS. Can you be specific? Which statistics do you think indicate a real "turn-around?"

[nadinbrzezinski]

76. Employment and GDP are core indicators

sorry.

As I said, most people in this country do not know what an indicator is, even if it waggled it's feet, started to jump, came in nice shiny colors and went LOOK AT ME!

[Truth2Tell]

82. So you think

that a slowing of the rate of job losses indicates, "no longer contracting?" The real unemployment rate is close to 15% and still growing, not contracting.

Why do you assume that the rate of job losses will continue to slow rather than remain flat or rise again? Where do you see the new jobs coming from, on a sustainable basis?

If the GDP bump is the result of the stimulus, where do you see the resources for those kinds of infusions coming from, on a sustainable basis?

[nadinbrzezinski]

83. No, I think it is no longer contracting because the

GROSS NATIONAL PRODUCT went from negative numbers (aka contracting) to Positive numbers, aka expanding.

This is economics 101...

If you do not understand this, there is nothing I can do for you beyond recommending, seriously, investing in either an econ 101 class or a textbook on it.

[Ozymanithrax]

23. So this is another indicator that the recession is over...

Last month they released informaiton that the economy was growing again, which means that the recession is over, unless it is a W shaped recession.

[nadinbrzezinski]

25. That is my only concern, but yes

the NEBR came out and said it... problem is nobody expects fast growth... and unemployment is expected to remain high, which makes this a weaker recovery.

[Ozymanithrax]

26. Now, we need to see how much unemployment numbers slow...

and what the shopping looks like for Christmas.

[nadinbrzezinski]

28. Unemployment has gone from 900,000

to 200,000 more claims since January, a significant improvement.

We'll see as well with shooing, though some of the retail sectors showed unusually high numbers for October including Auto, no longer cash for clunckers related and apparels, as well as hobby shops...

We are starting to see positive growth

[era veteran]

27. I am pretty sure the economy will fluctuate

The stock market usually leads coming out of a recession which it is doing. I feel that 20 years ago a double dip would have happened. Now the rules have evolved, the economic tiger of the east will drive this recovery. It will be interesting times............. If we could only build stuff again. Peace, Richard

[nadinbrzezinski]

29. Peace to you too

and welcome to DU

[dmallind]

43. We are the world's 3rd largest manufacturer still. NT

[DU GrovelBot]

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[nadinbrzezinski]

35. Wow positive news gets unrecced

WE ARE DOOMED WE ARE ALL GONNA DIE!!!!!!!

That would get recs...

This is just an amazing comment on DU...

[Double T]

37. Bolognie. Our phony economy is so propped up it is ridiculous.

Take away the stimulus, the bank bailouts, the car bailouts, the first time home buyer bailouts and the etc. bailouts; what do you think would be left? Add in ACTUAL unemployment at over 20% and the fact that most of lost jobs are not coming back...ever. With midterm elections less than a year away, the numbers will be manipulated to provide the desired affect.

[nadinbrzezinski]

39. If democratic underground existed in 1935 I could have written that

exact post...

After all we all know John Maynard Keynes was nuts...

Not that this administration is 100% keynseian.

[Double T]

61. Where WE are headed will make 1935 look like good times.

Inexperience, indecision and business as usual arte NOT answers to gigantic economic and financial problems. As the US dollar goes, so goes our destroyed nation.

[Ozymanithrax]

38. When bussiness fails to do the job, nations must pour money into the economy...

Money is money to the economy, it deosn't matter where it comes from.

[Subdivisions]

40. Based on what? n/t

[Echo In Light]

74. And where are the new jobs coming from, & what type are they?

[Craftsman]

42. So where are the good paying jobs?

[dmallind]

44. 9-10 mos away just like they always are after a recession ends.

And that of course does not mean full employment in 9-10 mos but the beginning of a job recovery in 9-10 mos.

Unemployment peaks latest. Jobs come back as sustained demand (which by the way like always comes from the majority who still DO have jobs being comfortable enough spending) leads to reduced inventories becoming too low (and inventories fell again in the latest numbers) for comfort which leads to increased production which leads to needing more people to support it. Not unusual. Not complicated.

Why is it this way round about jobs on DU? Why does nobody deny a recession started in late 07 because unemployment was still pretty low? Why wasn't it "oh it's all about jobs so we're fine" then?

[nadinbrzezinski]

55. THose are a leading indicator on the way down and

a trailing indicator on the way out. We will really not see a sea change as in positive numbers before 2010... and that is not a good thing... Nor am I expecting a stellar recovery on that front, not unless they implement Keynes fully and deploy a robust stimulus package.

[Orsino]

45. Then maybe the economy will start thinkng about getting off its ass...

...and hiring some goddamned workers.

It's been freeloading for too long.

[Beetwasher]

47. There WILL Be More Stimulus

It won't necessarily be labeled "stimulus II" but it's coming and it will happen in pieces.

Piece one will be HCR. Then a Jobs program. Then a clean/green energy investment program etc. Then a grid upgrade etc.

[Spider Jerusalem]

48. It won't last...nor can it, realistically.

Economic growth and rising demand will lead to more demand pressure driving up the price of oil, which along with increased market speculation as a result of rising oil prices and hard supply limits, will serve to depress demand and cause an economic contraction, all over again. US dependence on oil as a requisite for economic growth and the fact that maximum global petroleum production capacity isn't there to meet significantly increased demand beyond mid-2007 levels will lead to increasing and more rapid cycles of economic disturbance, and absent significant changes in lifestyle on the part of the American public and serious public investment in public transit infrastructure and other measures, there's nothing that can be done to prevent it.

[robdogbucky]

73. What Spider said...

and add to that, nothing has changed about the underlying factors of "no savings" and "nothing produced," by Americans. No jobs, no recovery, just speculation and wishful thinking. Oh, and more psyops. Recall that Wall St. and the "economists," have long relied on disinformation and psychology, er "lying," to "turn the market around." The market is not the economy however.

What I see and hear on the ground locally is no jobs, small businesses continue to fold, no growth in anything coming, wages low and going lower, etc.

RE will get worse when the cycle turns again, this time on commercial RE. After any anticipated/ginned up "Christmas rally," it is back to reality if we can see it through the fog and behind the big curtain. Business may be benefitting from the low wages bubble, but they cannot continue to kill the golden goose of a prosperous and secure middle class at the wage earning level. Methinks it's finger in the dike time for TPTB.

I cannot engage in Pollyana thinking anymore. Too much at stake.

Interesting on DU to compare the competing threads, "This is not a recovery, it's a coverup," and then this thread.


Just my dos centavos,

robdogbucky

[kentuck]

50. delete

wrong thread

[LeftHander]

52. contractions stopped and the recovery was stillborn....nt

[kentuck]

53. We just got the news this morning..

225 people on my floor at a call center/sales place will be laid off starting in January. That leaves 300 of us waiting for the building to be sold.

[Robb]

56. You are absolutely correct.

A slowing decline we have indeed.

[Taverner]

57. Uh...yup!

[deaniac21]

58. It's easy to see that things are 100 % better!

[Statistical]

62. Um if economy is expanding then we are not in a recession.

Recession =/= "bad times"

Recession is a contraction in economic activity over a period of 2 or more consecutive quarters.

Could we enter a "double dip" recession if/when GDP goes negative in Q2 or Q3 next year? Sure however as of right now there is no recession.

[nadinbrzezinski]

66. THat's the fear

why I raised the specter of needing another, far more robust, stimulus...

[dysfunctional press]

64. i'll hold my exuberance until after the numbers are revised in january...

i think that the numbers are being ginned up to make consumers think that it's okely-dokely to go out and spend spend spend for christmas, because the return to prosperity is well underway.

i don't see anything REAL to indicate that anything's getting any better, or even getting worse a little slower. :shrug:

[nadinbrzezinski]

67. Given that GNP is mentioned ONCE during the

release at the beginning of the quarter, and not more than that... mostly people don't get it... no, nobody is going on the TV machine (Except Joe last night on the Daily Show) and going SEE GNP is positive.

Hell most of the real economic indicators, if you want to keep an eye on them, you have to mostly go hunt for them

[debbierlus]

71. The economy is dead in the water

And, we haven't even seen the worst.

[Better Believe It]

72. The economy is rebounding! Hip Hip Hooray! Nevermind. Housing starts tumble 10.6%

Housing starts take unexpected tumble, fall 10.6 percent
By Renae Merle
Washington Post Staff Writer
November 18, 2009

New home construction took an unexpected tumble last month, reflecting the bumpy nature of a tentative housing recovery.

Housing starts fell 10.6 percent to a seasonally adjusted annual rate of 529,000 in October, according to Commerce Department data. Analysts were expecting an increase. Housing starts were down 30.7 percent compared with the same period a year ago.

http://www.washingtonpost.com/wp-dyn/content/article/2009/11/18/AR2009111802028.html

[galileoreloaded]

75. Nadin, I love your posts but you are incorrect. Google M1 MULT...

Better yet, here is the link:

http://research.stlouisfed.org/fred2/series/MULT

This is an unprecedented crisis of confidence and currency, never seen in this country. Not even the Great Depression, as then we were a creditor nation, and had many future resources to extract. Roads and bridges and tunnels to be built.

When the reading is less than 1, every dollar introduced doesn't roll through the economy, is falls victim to currency destruction thanks to fractional reserve lending, exploding balance sheets, etc. EVERY dollar going in is getting sucked out. I wish it weren't true, but it is.

The M1 MULT is probably the best barometer of actual national economic activity we have, and it shows a catastrophe. Poverty and austerity will be the lagging indicator, not jobs.

We are already seeing currency dislocations in of all places, Vietnam.

NOV 11

http://www.bloomberg.com/apps/news?pid=20601012&sid=aPA2HISVOVqU

"The price of gold in Vietnam was 27.5 million dong ($1,539) per tael today, according to a telephone directory information service run by Vietnam Posts & Telecommunications. It earlier reached a record high of more than 29 million per tael, online newswire Dan Tri reported, citing local jewelers. One tael is about 1.2 oz of gold."

Gold in Vietnam is priced around $1539 an ounce, and their currency isn't balancing with the others on a linear scale. This is problematic as currencies all have an exchange rate, and gold is considered a currency in this manner. This portends a dollar premium, that upsets the apple cart if you will in regards to FX. This will continue to evolve quite rapidly over the next several months, as all great crashes do........right at the traditional harvest time.

Sorry to have to disagree as I always love your posts.

GR

[nadinbrzezinski]

77. No problem, but metals are not a core indicator

that said, there is a crisis in trust in the US dollar, see the deficit... that is true and that is a variable that has not existed before. And that will change how this goes.

:-)

So we are not in disagreement, but GDP has gone positive. Which was the point of this.

Hell I keep an eye at them... and remember Money supply? That was far more accurate than GDP or a few other core indicators... Bush took it off the books... which is related to that money confidence issue.

You and I can look at the shades of gray, don't we?

[galileoreloaded]

79. Shades of gray, for sure.

I just got done reading "The Day the Universe Changed" by James Burk. "connections" was great also. Erie similarities to today's gyrations in global trade even though back then it was a relatively unsophisticated era.

Metals, specifically gold and silver (well, and even salt I suppose) were all principle components of trade, especially after the 16th Century when banking and credit was being led through it's infancy. Because the were fungible, and recognizable.

Metals, much like fiat (when there is stability), are fungible, and they have the unique ability to be recognized globally as fungible currency, albeit at potentially discombobulated exchange rates.

My point is that people and economies have the ability to adjust to the severity of change, but little ability to adjust to the rapidity of change. Gyrations and dislocations have a net effect of destabilizing a populous and their economic systems, and with the numerous input variables we now deal with in the global sandbox, have the very real capacity to have logarithmic effects. Call it Complex Systems Destruction.

For example, what one bank in the world has the power to singlehandedly harpoon the US and its economy??

RBS. The Royal Bank of Scotland.
If the UK ever had to cover the losses to 50% of RBS's portfolio, it would be left NO choice but to dump treasuries to raise cash. They can't really manipulate the EURO and the pound has already taken a thrashing. Any more pound destruction and the ECB would boot the Brits. They would have no choice. It's either that or smoke the only other economic powerhouse by ECB charter, the Germans.

Instead the UK dumps US Treasuries, and as they are the number 3 holder at like $600B, we take a monster hit.

A logarithmic hit.

A best case scenario for us IMHO is to silently bounce along the bottom, making no waves, hoping for stability, and that in 3-5 years that next new thing comes along as an economic engine for this country.

All the best, GR.

[nadinbrzezinski]

80. All the best to you too

And if you have an IPOD there is this little app called simply economy. All it is... well the damn collection of all them core indicators. Metals are in there too, but in the modern world they are more liable to react to instability.

[blindpig]

78. Which economy,

Wall St or Main St?

[nadinbrzezinski]

81. Main street, GNP is talking of Main Street, aka how much product

is produced by the US...