The US economy continues to resist media efforts at sabotage;
Orders to U.S. factories for big-ticket manufactured goods fell by a smaller-than-anticipated amount in April with many sectors outside of transportation showing unexpected strength.
The Commerce Department reported Wednesday that orders for durable goods dropped 0.5 percent, dragged down by big declines in demand for commercial aircraft and autos.
However, excluding transportation, orders rose by 2.5 percent last month, the biggest gain in 9 months. Orders for electrical equipment and appliances surged by 27.8 percent, the biggest increase on record, with strong demand also registered for primary metals, machinery and communications equipment.
Of course, folks don’t tune in the mainstream mouthpieces like they used to, either. Speaking of which – how are those share prices doing, anyway?
My US stocks were the top portfolio performers for two days running now.
The sky is NOT falling.
The lower US dollar is making it’s impact felt on small businesses that export.
As recounted in that bastion of socialist ideology, The Wall Street Journal:
“Former Fed Chairman Alan Greenspan tells the Financial Times that recession still is likely in the U.S. “He admitted he was puzzled by recent economic data that suggests the economy stopped deteriorating around March. ‘A recession is characterized by significant discontinuities in the data,’ he said. ‘It started off that way — there was a period of sharp discontinuity from December to March. But then it stopped.’ Mr. Greenspan believes there is a ‘tug of war’ taking place in the economy, with financial sector stress pulling one way and strong corporate liquidity pulling the other. Corporate liquidity is being eroded, but only gradually. ‘No one knows how this tug of war will end — specifically, whether the financial crisis will end before it drags down the real economy.’”
But what the hell would he know.
why does the msm, commie media keep talking down the economy? this year while in the u.s. i saw more building and requests for jobs by employers, it was freakin amazing. americans, inspite of the “progressives” another word for commie, keep building their country and their wealth. we are truly stupid.
QE,
I’d say “what the hell does the headline writer know” as it directly contradicts the point you quoted Greenspan as saying next: “No one knows how this tug of war will end — specifically, whether the financial crisis will end before it drags down the real economy.” As in he doesn’t know – not that a recession is likely. That’s what happens when newspapers hire English majors to write headlines on subjects they know nothing about. It’s a problem even with less socialist papers.
Also, even a Greenspan can be “unclear” as in when he gives the definition of a recession. The actual definition of a recession is a minimum of two consecutive quarters of negative growth.
The definition he gives [“A recession is characterized by significant discontinuities in the data”] is called “uncertainty” – not recession.
Oh, and Greenspan was a public servant running the fed. He wasn’t f’ing Jesus. He isn’t all-knowing.
Next time read the quotes you give instead of just cutting and pasting. It helps to know what you’re reading.
According to an analyst on cnn today, the high price of gas has re-invigorated the rust belt of America. It is now cheaper to make steel there than import it from China. Steel mills are in production again.
Oh, for pity’s sake – you call others “sheeple” and yet you can’t see what’s in front of you?
As I’ve reported over and over here, the “official” government numbers on inflation are simply lies told to keep the average person in the dark. In both the CPI and PPI last month – as oil was going from $100 to $130/bbl, and gasoline in the US was marching up to $4/gal – the US government reported a *FALL* in the price of petroleum products.
Similarly, they said food prices were *only* up 4%, but most independent sources cited rises of 10% year over year. I know I used to buy Dempster’s whole grain breads anywhere from $1.99 (sale) to $2.39 (regular price), but today, a loaf was $2.89.
Unemployment, according to the same Bureau of Labor Statistics, rose from 4.5% a year ago to 5% this year (that’s a 10% rise in unemployment), and since they don’t count people who’ve given up looking for work, that figure is probably understated as well. Again, according to the BLS, the US economy has lost 260,000 jobs since the beginning of the year. And let’s not forget the jiggery-pokery that goes on here – when the “flash” estimate is announced, it’s often higher than the forecasts, which helps boost the stock market. For example, the flash estimate for Jan08 was 130,000 NEW jobs added; the revised number now posted on the BLS site is 76,000 JOBS LOST. That’s a turnaround of over 200,000 jobs. But, the flash number is eagerly awaited by traders in the pits and commentators on Bubblevision (aka CNBC), and endlessly discussed when released; the revisions are buried in boring press releases two months after the fact, and are generally ignored by everyone except those who like to know what’s really going on – like, say, Warren Buffett or George Soros.
Here’s another example: the BLS reported Feb08 job losses of 63,000 (http://www.nytimes.com/2008/03/07/business/07cnd-econ.html?hp) but this was later revised to 83,000 jobs lost. http://www.bls.gov/eag/eag.us.htm Yep, that sure sounds like a booming economy to me!
According to the BEA, “real” GDP (i.e. gross GDP minus inflation) rose by 0.6% in both Q42007 and Q12008 (the latter is the “advance” estimate; the supposedly more accurate “preliminary” estimate will be released tomorrow). However, when the government systematically dampens the real inflation numbers, it’s pretty clear that real GDP has been negative for a while.
Meanwhile, what have stocks been doing? (I hope this pastes in properly from Excel):
12-Dec 28-May %Change
DJ Ind 13264 12594 -5.05%
SP500 1468 1390 -5.31%
US$DX 76.65 72.61 -5.27%
OIL 95.98 131.03 36.52%
CRB 476 544.66 14.42%
Gold 838 902 7.64%
For those who don’t know, US$DX is the US dollar index, a trade-weighted measure of the US dollar’s performance against its trading partners. The CRB is the Commodity Research Bureau’s overall measure of commodity prices (foods, fibres, metals, etc.).
So, let’s add it up, shall we? Falling stock prices, falling employment, falling dollar, with rising food prices, rising energy prices, and rising house defaults – even among the multi-millionaires in the Hamptons, as was reported this week. Yes, that sounds like a glowing economic picture, doesn’t it?
I’m not happy that this is the way it is, but I’m also not happy that it’s May 28, and I can’t put out my tomato plants because of frost warnings. If I were to put out my plants and they died from frost, you’d think I was stupid. I wish the economy was in better shape, but to go around pretending “everything’s fine” when it palpably IS NOT – well, I’ll let you guess what I think of that.
Warwick: “Next time read the quotes you give instead of just cutting and pasting. It helps to know what you’re reading.”
Thanks for the condescension. Now prepare to eat crow.
“…As in he doesn’t know – not that a recession is likely…”
Can we agree that, in terms of the pure mathematical probability of an outcome, A, happening versus not happening:
– 50% probability reflects complete uncertainty, since outcome A is as likely to happen as to not happen;
– anything less than 50% probability reflects a greater likelihood that outcome A will not happen; and
– anything more than 50% probability reflects a greater likelihood that outcome A will happen?
OK. Here’s what Mr. Greenspan actually said:
“I still believe there is a greater than 50 per cent probability of recession.”
Yes, he goes on to qualify that with more nuanced analysis. But, bottom line, do you think he’s moving his own personal investment portfolio around a bit just to be on the safe side, or is he going about his day secure in the belief that the future will be bright and rosy? And on the matter of armchair economic forecasting, would you give greater weight to the opinion of one Mr. Greenspan, or of one Ms. McMillan?
*****
“The actual definition of a recession is a minimum of two consecutive quarters of negative growth.”
No, it’s not. That ‘definition’ is merely a rule of thumb, a bit of conventional wisdom, possibly taken from an Econ 101 textbook. It is unquestionably not an official designation.
In the US, the final word on the matter, as those in the know will happily tell you, lies with NBER, who defines ‘recession’ thusly:
“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. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough.”
No mention, as you can plainly see, of successive quarters of negative growth as a criterion.
Dang – the date didn’t paste in properly from Excel; the December data are from Dec 31, 2007, not Dec 12.
NY Times; past 4 years, down 60%
TorStarCorp; past 3 yrs, down 48%
Could be a ‘Dead Cat Bounce’ soon.
Ron, is that where it hits the ground [splat!] and then -sticks-?
I can see the NY Slimes doing that. Slime has adhesive properties!
And on the matter of armchair economic forecasting, would you give greater weight to the opinion of one Mr. Greenspan, or of one Ms. McMillan?
Greenspan has been wrong on every forecast he has made.
http://www.fleckensteincapital.com/special_features/bill/fleckneworleans11-15-2004.htm
ol hoss … thanks for that one …. I was just about to spit out my coffee and get down to some serious rebuttal on that Greenspan nugget.
Greenspan who is a career hedger never HAD to be right about anything either. A steady strategy of laying off risk by using the US interest rates to either stifle growth or prop up sagging markets was sufficient to cover any and all concerns he had.
As for the media … just watch how as soon as Obamarama gets anointed and ascends the throne in America’s Liberal Progressive version of the Man Who Would be King … the Media will pass glowing reports on any economic matters that may tend to worry the sheeple.
It won’t matter what he does or does not do. It will be reported as being the Best thing … even if he does NOTHING… which is most likely.
Use your own thinking equipment.
No need to rely on or gamble upon the word of various gurus.
First, like *global warming*, there is no such thing as a recession.
There are fluctuations. Markets rise and markets fall but a recession drops into hell and freezes over? Will Never Happen. No such thing.
It can get rough for a time, but big changes will give us plenty of ways to surge ahead again as human nature has always done trough time. = TG
Wait for it. Lots of ‘mis-financing’ yet to be shaken out.
No, it’s not. That ‘definition’ is merely a rule of thumb, a bit of conventional wisdom, possibly taken from an Econ 101 textbook. It is unquestionably not an official designation.[/quote]
QE,
Actually the 2 month “Official” definition comes from The US Commerce Department…. (Source; Series 7 Principles & Practices, 7th edition)
Phillip G. Shaw: “Actually the 2 month “Official” definition comes from The US Commerce Department…”
Actually, no. From the US Department of Commerce’s Bureau of Economic Analysis website (FAQ section):
Q: Recession: How is that defined?
A: In general usage, the word recession connotes a marked slippage in economic activity. While gross domestic product (GDP) is the broadest measure of economic activity, the often-cited identification of a recession with two consecutive quarters of negative GDP growth is not an official designation. The designation of a recession is the province of a committee of experts at the National Bureau of Economic Research (NBER), a private non-profit research organization that focuses on understanding the U.S. economy. The NBER recession is a monthly concept that takes account of a number of monthly indicators—such as employment, personal income, and industrial production—as well as quarterly GDP growth. Therefore, while negative GDP growth and recessions closely track each other, the consideration by the NBER of the monthly indicators, especially employment, means that the identification of a recession with two consecutive quarters of negative GDP growth does not always hold.
QE,
You can split hairs all you want. You posted Greenspan misspeaking on what a recession is and about what the likelihood of one is. I called you on it. You change the definition.
You also didn’t post a link.
Also, someone who says the odd are “better than 50%” is saying they have no idea. You hair-spitting on this is even more pathetic than on your definition of what a recession is (and I notice that “discontinuities” is absent from your subsequent arguments…)
So I’ll pass on the crow, thanks.
QE,
The NBER functions are a finding that is usually made well after the fact. They determine when the recession began and ended.
The Street has used the 2-quarter rule that is more strictly applied in a dynamic market.
The Crack-Head generation is not satisfied to “follow” the market, they want to lead the market with wild predictions. We have Computers watching Computers that are watching other Computers.. Etc….. Brilliant!
QE,
The NBER functions are a finding that is usually made well after the fact. They determine when the recession began and ended.
The Street has used the 2-quarter rule that is more strictly applied in a dynamic market.
The Crack-Head generation is not satisfied to “follow” the market, they want to lead the market with wild predictions. We have Computers watching Computers that are watching other Computers.. Etc….. Brilliant!