The Recession That Never Was is Now Over

[PaceAdvantage]

http://briefing.com/GeneralContent/I...0TheBigPicture

Recession is a term that applies to the entire economy. Recession comes from the word "recede." It means DOWN.

First quarter real GDP was UP. Continued increases in consumer spending and exports will keep GDP growth positive in the second quarter. The fiscal stimulus will see to that.

There will not be a single down quarter for GDP. This is NOT A RECESSION.

Just weeks ago it was common knowledge that "everyone knows this is a recession." There were financial articles that started with "It is no longer in doubt that this is a recession, it is only a matter of how bad it will be." We disagreed then, and we disagree now.

These are very difficult economic times. Growth is well below the long-term trend of 3%. Nevertheless, there is growth. The difference is important.

If this were a true recession, job losses would be much more severe and corporate profits would not be nearly as good.

[jcrabboy]

Originally Posted by PaceAdvantage

http://briefing.com/GeneralContent/I...0TheBigPicture

[/i][/b]

PA I don't really want to get political as I love this site for the Horse Racing not the politics, but I wanted to comment on this.

I don't think the typical man on the street defines recession by numbers, at least not by government provided numbers, rather he looks at his personal situation and the numbers that affect him personally.

Gas Prices Up. Grocery Prices Up. Company you work for says 'no raises this year due to economy'. Price of higher education for your kids is way Up, etc, etc. These circumstances are occuring at a rapidly accelerating rate.

I think that when the average shmo says we are in a recession this is what he is talking about: If you are working your ass off and can't break even or gain a little, if you are having to tap into your savings or 401K to get by, if you are maxing out your credit cards, etc. then, regardless of what the endless numbers spewed forth by talking heads and the government indicate, it is a recession.

Most corporations will take advantage of the economic perceptions to reduce or eliminate raises. Take a poll among working people concerning their raise and bonus situations this year if you doubt this.

The company I work for really is showing a drop in revenue, but they started laying groundwork for downsizing, etc. a few months ago before the pinch had even been felt.

I believe that, even in a free wheeling capitalist environment, some regulation of entities who can affect the economy and security of the country is a necessary evil. It is my belief that Oil Companies as a group are detrimentally affecting the stability of our country and pushing this perceived recession. They need to be reined in.

Esoteric numbers won't change my mind. A significant drop in prices at the pump might.

I think I am in the majority on this and would suggest that politicians who want to keep their jobs will need to do more than give lip service to this problem.

Just my opinion and I know opinions are like AHs everybody has one.

Jimmie

[ljb]

Earth to Pa, earth to Pa, come in Pa, are you there Pa ?

[pktruckdriver]

JCRABBOY


Awesome post , really you get it so well, and all you say is happening as we post here, and I too love this site, but I too live in this country and feel the crunch, heck I'm being rolled over and over and over, yet some don't feel it.


ljb my sentiments exactly


Patrick, the duck

[chickenhead]

there has to be an agreed upon definition of what a recession is....it's not "Things are going shitty for me", or "Gas sure is farking expensive".

Just say that, if that's what you want to say....that doesn't mean it's a recession. The common agreed upon definition is two consecutive quarters negative GDP growth (and maybe some other stuff too, I don't remember).

It's not a question of someone being right to make another wrong, PA and you are probably both right Patrick, we have not (yet, looking backwards) been in a recession...and things are going shitty for you (and a lot fo other people). It's not like one excludes the other.

[bigmack]

[pktruckdriver]

Chickenhead


You're right , maybe, both me , the duck, and Bossman, are right.


This country allows one to interpret anything , anyway they want to, kinda like the Bible, you can take it anyway you want, thats your right. Love that part.



Love this site and my ability to debate these issues, or give my side of the discussion, with out fear. Bossman is tough, he can handle it, heck he dishes it out sometimes too, and that is ok. I still love this site, really I do.


Patrick , the duck

[lamboguy]

thank god, now i am happy.

i hope that gas price double again from here, i have lost 3 pounds last month without even trying. i stopped driving and took up running and walking.

[jcrabboy]

Originally Posted by chickenhead

there has to be an agreed upon definition of what a recession is....it's not "Things are going shitty for me", or "Gas sure is farking expensive".

Just say that, if that's what you want to say....that doesn't mean it's a recession. The common agreed upon definition is two consecutive quarters negative GDP growth (and maybe some other stuff too, I don't remember).

It's not a question of someone being right to make another wrong, PA and you are probably both right Patrick, we have not (yet, looking backwards) been in a recession...and things are going shitty for you (and a lot fo other people). It's not like one excludes the other.

I think that you can pretty well can the old definitions of a recession as you are unlikely to see 2 consecutive quarters where the data hasn't seen more massages than a Swedish Health Spa.

We have 17+ states (maybe more I haven't checked in the past few days) and counting who say they are going to have huge budget shortfalls due to the economy. States who are showing pluses are almost exclusively Oil Producing (What a shock).

If the country is not in recession then certainly a growing number of states are and once that snowball really starts to roll...

Jimmie

[chickenhead]

I live in California, we have huge budget shortfalls pretty much every year, and yes it will get worse this year. That doesn't mean we are in a depressed state. Our federal government faces budget shortfalls every single year, that doesn't mean our economy is constantly depressed. The public sector is not the private sector, using one as the guide to the other seems a pretty poor substitute.


If you want to use an entirely subjective account of your own well being as the basis for whether the economy is growing and at what rate, fine, just don't expect anyone to necessarily assume it is as broad as you do. I think we all have a tendency to do that, because that's all we really know, but that doesn't mean it has much validity.

At that level, one circumstance is not more valid than another, and hence the fact that someone else somewhere is doing swimmingly completely cancels out your observations.

[jcrabboy]

True enough the public sector and the private sector are not the same.

Anecdotal evidence of recession is by its very nature going to be local rather than national, but when linkage is established thru newspapers, television etc that other areas of the country are feeling the same way about the economy that lends heft to the anecdotal.

I think that scenario is playing out all over the USA right now. I could be wrong. My ROI playing the ponies is proof of that, but don't you think the subjective becomes objective if enough people agree.

I think it was in The Man Who Shot Liberty Valance where a newspaperman said: "when the legend becomes truth print the legend." Or something like that. What I am saying is if enough people see this as a recession then you can bounce charts, graphs, quotes from famous economists, etc. off them till you no longer are able to speak or write, but they will still see it as a recession even if the evidence is only anecdotal.

Jimmie

[chickenhead]

can't argue with much of that, but I still like to keep the distinction in mind, knowing how lacking my own perspective can sometimes be...and how easily influenced.

Anyway, good stuff

[OTM Al]

There's one other thing I failed to mention in the other thread as well. Even though they call it quarterly GDP, it is actually measuring a yearly GDP rate estimated on what happened that quarter. Now given the fact that much more production and sales go on late in the year for the holidays than in the first quarter, one could expect that you can estimate positive GDP for the year even if it is in reality flat for the first quarter. We saw a very low estimate for the first quarter which says to me due to this somewhat convoluted system, there is a pretty good chance that GDP actually did fall.