Jump to content

Recession


Recommended Posts

Some more talk about Gramm and the stupidity of some Republicans.

This is starting to make sense to me now: these people just don't know what the real definition of a recession is so they claim America is in a "mental recession" and those who have suffered a job loss or a foreclosed house are "whiners."

Per Barry Ritholtz: Amity Shlaes Does Not Know What a Recession Is

Attention Ms. Shlaes:

"Consider what happened this week. While speaking with the Washington Times, Gramm said that the country was not in a true recession but a "mental recession." He also said, "We have sort of become a nation of whiners" and "You just hear this constant whining, complaining about a loss of competitiveness, America in decline."

Gramm was right about the recession and stood by his recession comments on Thursday. A recession is two consecutive quarters in which the economy shrinks, and last quarter it grew. But no matter. Voters feel they are in a recession, and so they are, at least according to Campaign Econ."

Um, wrong.

A recession is NOT two consecutive quarters of GDP contraction. What it actually is, via the NEBR, the entity in charge of dating such things, is:

"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. Between trough and peak, the economy is in an expansion. Expansion is the normal state of the economy; most recessions are brief and they have been rare in recent decades. As formally defined by the NBER, it is the "Peak to Trough decrease in business activity."

-The NBER’s Recession Dating Procedure

You will note that nowhere in that formal definition is there any discussion of consecutive quarters of negative GDP.

Link to comment
Share on other sites

  • Replies 593
  • Created
  • Last Reply

Top Posters In This Topic

Since this is under Canada/US Relations lets bring Canada back into the mix:

The subprime crisis reaches north

The great carelessness that has marked the continuing U.S. housing crisis keeps claiming more victims. Yesterday, Statistics Canada reported that our country lost 39,200 full-time jobs last month, pushing up the unemployment rate. Though it would be much too simplistic to attribute all those job losses to American woes, Canadians are paying a steep price for lax U.S. regulatory oversight. When many U.S. consumers have a hard time making their food, fuel or mortgage payments, they are unlikely to buy Canadian goods and services. And when U.S. mortgage-finance giants teeter on the brink, the scale of their difficulties threatens financial markets around the world.
Link to comment
Share on other sites

Some more talk about Gramm and the stupidity of some Republicans.

This is starting to make sense to me now: these people just don't know what the real definition of a recession is so they claim America is in a "mental recession" and those who have suffered a job loss or a foreclosed house are "whiners."

They are whiners.....get another job and/or get smarter about leveraged debt. Sympathy won't do them any good anyway.

Link to comment
Share on other sites

Since this is under Canada/US Relations lets bring Canada back into the mix:

The subprime crisis reaches north

Then its time to journey west to the oil patch and potash mines. Just wait till that pipeline gets built to the West coast. It's going to be good time charlie in Western Canada provided Dion does not get elected.

Those American manufacturing jobs are going to be turned into energy production jobs with nuke plants going up, more oil rigs going up, ethanol plants, and new wind farms. The americans will come out of this fine and dandy, and less reliant on foreign energy. Let the chinese send up the price of energy, the Americans are smart enough and resilient enough to make it work in their favor. It's just a bump on the road.

Manufacturing in 1st world countries is passe. It's now primary and tertiary industries. Let the countries with piss poor wages do the menial work.

Link to comment
Share on other sites

Oh great, so now the whining is international in scope, as if the American consumer owes anyone a sure thing. First bash 'em for consuming too much, then bash 'em for not consuming enough.

Given the large trade deficit the US has I think it is the Americans who should be thanking the rest of the world (and China in particular) for allowing Americans to trade in their fiat currency for shiny trinkets.

Sure, it's somewhat a symbiotic relationship but eventually the Chinese will tire of sending their savings to the US (while losing value from the debasement of the US dollar) and Americans will realize that they can't live off of unrealized gains in whatever bubble du jour their government/central bank/investment banks can conjure up.

That's the thing about recessions - they create timing differences that can be unsettling for large amounts of the population.

You and Gramm can call these people "whiners" all you want - at least John McCain is smart enough to get it and back away from insulting people who are down and who are about to cast votes.

Link to comment
Share on other sites

Some more intelligent commentary on Gramm's "mental recession" rhetoric:

A mental recession?

That's not a gaffe, he evidently believes the country's poor consumer confidence readings are the imagination of U.S. citizens. We've all been deceived into a bad feeling?

Consider these real non-feeling facts:

1) U.S. companies have been laying off workers for 7 months in a row. There are now 578,000 fewer private jobs in American than there were in November of 2007.

2) Home prices have declined 23% that's more than anytime since the Great Depression, and home owners equity in their homes is at an all time low.

3) New Single family home sales are down 64% that's more than any time since the Great Depression.

4) Oil and Gas prices are at all time highs, even adjusted for inflation

5) Home ownership has declined over the past 4 years, that only happened during the major 1980-1982 back to back recessions.

6) Personal Bankruptcies have tripled in the last 3 years

Economically it's nonsense. People have real reasons as to why they are depressed. The sooner Senator McCain finds a serious economic adviser, the better. This country needs ideas to solve our very real problems, blaming them on our fevered imaginations is useless.

Link to comment
Share on other sites

Given the large trade deficit the US has I think it is the Americans who should be thanking the rest of the world (and China in particular) for allowing Americans to trade in their fiat currency for shiny trinkets.

The Americans trade a lot more than fiat currency...starting with Canada.

Sure, it's somewhat a symbiotic relationship but eventually the Chinese will tire of sending their savings to the US (while losing value from the debasement of the US dollar) and Americans will realize that they can't live off of unrealized gains in whatever bubble du jour their government/central bank/investment banks can conjure up.

I think you are hurting your own anti-whiner position with this.

That's the thing about recessions - they create timing differences that can be unsettling for large amounts of the population.

Recessions are neither rare or insurmountable. Been there...done that...and we haven't even confirmed that there is a recession.

You and Gramm can call these people "whiners" all you want - at least John McCain is smart enough to get it and back away from insulting people who are down and who are about to cast votes.

I'm not running for public office...I will call them whiners when they whine. Pretty straightforward....they whine because "government" can't rescue them from their own choices. Suck it up.....

Edited by bush_cheney2004
Link to comment
Share on other sites

Recessions are neither rare or insurmountable. Been there...done that...and we haven't even confirmed that there is a recession.

Dude! Both GM and Chrysler are teetering on bankruptcy. Fannie and Freddie may need to be bailed out by the Government and they hold 5,000,000,000 in mortgages, which means higher interest will be charged on renewers, thus even more mortgage defaults. IndyMac Bank is seized by federal regulators, and this is the second largest bank failure in U.S. history.

At present, 9,000 Americans are losing their homes every day. The Dow Jones had lost 3000 points before the typical summer bear market, and now looks to be in full retreat. Oil reached a new high of $146, and there seems to be nothing to keep it from more increases, and thus gas prices. These are not the warning signs of a typical recession, friend.

There is the quite real possibility of stagflation, and the worst of it all is most Americans seem to be ignoring the signs, shrugging when their neighbors lose everything, and think positive thought will keep the recessionary forces at bay. Most won't even recognize that they are in a recession until the official government stats come out several months after the fact.

Link to comment
Share on other sites

The Americans trade a lot more than fiat currency...starting with Canada.

I think you are hurting your own anti-whiner position with this.

Recessions are neither rare or insurmountable. Been there...done that...and we haven't even confirmed that there is a recession.

I'm not running for public office...I will call them whiners when they whine. Pretty straightforward....they whine because "government" can't rescue them from their own choices. Suck it up.....

You have lost all credibility with this post (not that you had much to begin with):

1) To not understand the trade deficit and its relationship to currency and currency debasement (not to mention how it effects the price of oil/commodities) is just plain ignorant. Furthermore, to not understand its relationship between Americans who do not save versus China that does save is just astonishing.

2) To not understand that the US (and possibly Canada) are in a recession by the NBER definition when not only the NBER definition has been provided to you on several occasions but the reasons why US statistics are years behind in properly showing when a recession starts is also plainly ignorant (or willful denial).

3) Lots of people are "whining" because they are tired of incompetent "elected" and unelected officials making poor decisions that ruin their lives. Whether it is a Greenspan/Bernanke Fed and Congress that allow lax monetary policy and, worse yet, lax regulations that lead to mortgage fraud (by both the mortgage companies and people receiving the lending), or a President who is incapable of reacting in a logical way to any crisis (see invasion of Iraq; Katrina; subprime mess as examples), Americans have a lot to complain about.

4) This does become political because so far the crisis continues to get worse while the President and his would be Republican replacement fiddle. I thought Obama wouldn't have a chance to win Presidency but seeing how much denial about the economy and hatred towards the voters that Republicans are showing it is going to be very difficult for Obama to lose (watch the election turn negative very soon though).

5) You are either a typical Republican troll or you are a Democratic troll (i.e. acting like an @ss in the hopes that people will think that all Republicans are like you). As such, I see little point discussing this issue with you since you prefer to troll rather than engage in anything that would resemble intelligent discussion (since the intelligence has, so far, been one-sided with me providing the links while you provide nothing more than a misinformed opinion).

Link to comment
Share on other sites

Most won't even recognize that they are in a recession until the official government stats come out several months after the fact.

I disagree with this.

Most people are aware there is a recession well before the pointy headed people who live under the fluorescent lights do.

People feel the slow down before the stats catch up to tell us about the slow down.

So those who look just at the official stats are always going to be at least many months behind the economic reality.

Those who look at stats with context (watching trend lines, keeping an eye on historical readings to compare current readings to past situations, understanding the measurement flaws inherent in any statistical model ...) are a little closer to the people and it is these people, rather than the Gramm's or Kudlow's, who should be read and watched.

Link to comment
Share on other sites

Dude! Both GM and Chrysler are teetering on bankruptcy. Fannie and Freddie may need to be bailed out by the Government and they hold 5,000,000,000 in mortgages, which means higher interest will be charged on renewers, thus even more mortgage defaults. IndyMac Bank is seized by federal regulators, and this is the second largest bank failure in U.S. history.

Happened before....please correlate with past recessions if you can...Dude.

At present, 9,000 Americans are losing their homes every day. The Dow Jones had lost 3000 points before the typical summer bear market, and now looks to be in full retreat. Oil reached a new high of $146, and there seems to be nothing to keep it from more increases, and thus gas prices. These are not the warning signs of a typical recession, friend.

What did the Dow do on Oct 17, 1987? Was there a recession?

There is the quite real possibility of stagflation, and the worst of it all is most Americans seem to be ignoring the signs, shrugging when their neighbors lose everything, and think positive thought will keep the recessionary forces at bay. Most won't even recognize that they are in a recession until the official government stats come out several months after the fact.

Yes, that is how we roll...no recession until officially recognized as two or more consecutive quarters of negative growth in GDP. Why should we panic this time? And even if we did panic, what difference would it make?

Link to comment
Share on other sites

You have lost all credibility with this post (not that you had much to begin with):

Then I guess we can call it even.

1) To not understand the trade deficit and its relationship to currency and currency debasement (not to mention how it effects the price of oil/commodities) is just plain ignorant. Furthermore, to not understand its relationship between Americans who do not save versus China that does save is just astonishing.

....and to not understand the impact of rising US exports is just plain ignorant. We've already established that there is a defacto weak dollar policy despite what is said.

2) To not understand that the US (and possibly Canada) are in a recession by the NBER definition when not only the NBER definition has been provided to you on several occasions but the reasons why US statistics are years behind in properly showing when a recession starts is also plainly ignorant (or willful denial).

It doesn't matter to me either way.....I can wait until it's official....and still not care. Oh my...the sky is falling???!!!

3) Lots of people are "whining" because they are tired of incompetent "elected" and unelected officials making poor decisions that ruin their lives. Whether it is a Greenspan/Bernanke Fed and Congress that allow lax monetary policy and, worse yet, lax regulations that lead to mortgage fraud (by both the mortgage companies and people receiving the lending), or a President who is incapable of reacting in a logical way to any crisis (see invasion of Iraq; Katrina; subprime mess as examples), Americans have a lot to complain about.

Let 'em bitch.....those same people are the ones making stupid choices on their own. Wanna blame Bush too....fine...blame Clinton (Enron)....blame Bush Sr.....blame Congress....blame them all. Most Americans who lived through the Carter years are not going to be impressed by the current whiners like you. Personally, I find it amusing when some Canadians whine even more than the Americans.

4) This does become political because so far the crisis continues to get worse while the President and his would be Republican replacement fiddle. I thought Obama wouldn't have a chance to win Presidency but seeing how much denial about the economy and hatred towards the voters that Republicans are showing it is going to be very difficult for Obama to lose (watch the election turn negative very soon though).

OMG...a negative election campaign? Is that unprecedented? What shall we ever do? Can you vote in the election?

5) You are either a typical Republican troll or you are a Democratic troll (i.e. acting like an @ss in the hopes that people will think that all Republicans are like you). As such, I see little point discussing this issue with you since you prefer to troll rather than engage in anything that would resemble intelligent discussion (since the intelligence has, so far, been one-sided with me providing the links while you provide nothing more than a misinformed opinion).

Of course....I am sure the White House will be in touch with you to beg for your expertise...LOL! Opinions are like bungholes...everybody has one, and yours is just like all the rest.

Link to comment
Share on other sites

Yes, that is how we roll...no recession until officially recognized as two or more consecutive quarters of negative growth in GDP. Why should we panic this time?

Why do you continue to lump yourself in with the stupid (i.e. Amity Shlaes)? [Linked again - obviously for other people's benefits]

It has been shown many times that your description above is not the official definition of a recession.

As already stated ad nauseum:

A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough. Between trough and peak, the economy is in an expansion. Expansion is the normal state of the economy; most recessions are brief and they have been rare in recent decades. As formally defined by the NBER, it is the "Peak to Trough decrease in business activity." -The NBER’s Recession Dating Procedure

This is exactly why I no longer see much point in trying to have a discussion (never mind "intelligent" discussion) with you: you are incapable of reading and/or comprehending facts.

Link to comment
Share on other sites

Why do you continue to lump yourself in with the stupid (i.e.

It has been shown many times that your description above is not the official definition of a recession.

Because I want to? Do you have a problem with that? Tough noogies!

This is exactly why I no longer see much point in trying to have a discussion (never mind "intelligent" discussion) with you: you are incapable of reading and/or comprehending facts.

Yet you keep coming back for more, especially when I repeatedly demonstrate that the US economy squeaks out another quarter of positive growth. That must really piss you off, eh?

Tell us again about population growth and some real GDP math that magically converges on zero and negative numbers. If you are right, you will win a Nobel for sure!

Link to comment
Share on other sites

Happened before....please correlate with past recessions if you can...Dude.

How about the recession of 1980, when it was so bad Chrysler went under. You may have been on a boat during this recession(weren't you a sailor?), but it was particularly nasty and the stagflation mixed with other things cause 18% interest rates for mortgage holders renewing. Not a garden variety recession, and this time both GM and Chrysler are teetering, as well as the aformentioned bank.

What did the Dow do on Oct 17, 1987? Was there a recession?

Context is everything. People weren't losing their homes at a 9000/day clip then, oil/gas/energy was cheap and it wasn't a 6 month (or so) trend. This time, it's a slow bleeding that won't stop. They can keep the Dow from losing 500 points a day with rules instated after Black Monday, but they can't keep it from losing a 100 a day.

Yes, that is how we roll...no recession until officially recognized as two or more consecutive quarters of negative growth in GDP. Why should we panic this time? And even if we did panic, what difference would it make?

We should never panic. The point is to recognize what's coming, and take evasive action so when it hits you can weather the storm. People who are living just beyond their means a little or a lot, even those just under are going to be at risk if they have to renew mortgages that force them to pay higher rates on top of higher prices for everything else that gas prices affect.

It's too early to see how bad it will be, but being careful now could save a lot of trouble down the road.

Link to comment
Share on other sites

How about the recession of 1980, when it was so bad Chrysler went under. You may have been on a boat during this recession(weren't you a sailor?), but it was particularly nasty and the stagflation mixed with other things cause 18% interest rates for mortgage holders renewing. Not a garden variety recession, and this time both GM and Chrysler are teetering, as well as the aformentioned bank.

The Chrysler bailout (it never went under because of Chrysler Corporation Loan Guarantee Act of 1979 provisions) was '79 - '80, and it was bookended by two recessions ('73-'75 and '80 - 82'). I purchased my first home shortly after this with a 13% mortgage. We get financial news on a "boat" too.

Context is everything. People weren't losing their homes at a 9000/day clip then, oil/gas/energy was cheap and it wasn't a 6 month (or so) trend. This time, it's a slow bleeding that won't stop. They can keep the Dow from losing 500 points a day with rules instated after Black Monday, but they can't keep it from losing a 100 a day.

If you are trying to make a case for a repeat of the '73 -'75 recession, I'm all ears. My personal experience is that oil supply is more important than cost/price. "Losing homes" is healthy for the economy in the long term....shakes out the weak hands.

We should never panic. The point is to recognize what's coming, and take evasive action so when it hits you can weather the storm. People who are living just beyond their means a little or a lot, even those just under are going to be at risk if they have to renew mortgages that force them to pay higher rates on top of higher prices for everything else that gas prices affect.

If one always has their financial house in order, then it is the best they can do, regardless of what happens. I have actually taken advantage of the downturn as a buying opportunity. Others are doing the same.

It's too early to see how bad it will be, but being careful now could save a lot of trouble down the road.

And how do you propose that America or Canada be "careful now"? Shall we go back to Nixon era price controls? That worked really well!

Edited by bush_cheney2004
Link to comment
Share on other sites

And how do you propose that America or Canada be "careful now"? Shall we go back to Nixon era price controls? That worked really well!

I certainly can't give a government counsel, and when a recession hits they usually don't hurt near as much as the citizens do. The governments are going to do what they will, I'm saying we the people need to watch our pennies right now. I wouldn't take this as an opportunity to buy a house yet personally. Prices could go a long way down yet, they haven't even officially declared a recession yet! It sounds like you are pretty responsible though, but many aren't.

Link to comment
Share on other sites

I certainly can't give a government counsel, and when a recession hits they usually don't hurt near as much as the citizens do. The governments are going to do what they will, I'm saying we the people need to watch our pennies right now. I wouldn't take this as an opportunity to buy a house yet personally. Prices could go a long way down yet, they haven't even officially declared a recession yet!

On this we agree. I'm old...debt free....and got that way by not being foolish about living beyond my means. Government (particularly state governments) are beginning to feel the pinch on both the revenue side and services demand. My job is just to pay the taxes.

Link to comment
Share on other sites

I'm old...debt free....My job is just to pay the taxes.

Get to work then. Your generation still has a lot to account for - like the fact it never accounted for the government corruption that's led to things like...The demise of Fannie and Freddie. Debt free my ass.

The shapers of the U. S. mortgage finance system hoped to achieve the security of government ownership, the integrity of local banking and the ingenuity of Wall Street. Instead, they got the ingenuity of government, the security of local banking and the integrity of Wall Street.

David Frum is a real penis isn't he? He blames all this on Democrats of course but says nary a word about why Republicans never did anything about it when they were on watch and seducing the canine or whatever else it was they were doing. Oh yeah, something about shaping the global economy in the hopes of security, integrity and ingenuity. :lol:

Link to comment
Share on other sites

Get to work then. Your generation still has a lot to account for - like the fact it never accounted for the government corruption that's led to things like...The demise of Fannie and Freddie. Debt free my ass.

Not your ass at all...you have your own set of challenges. The "demise" has been greatly exaggerated.

David Frum is a real penis isn't he? He blames all this on Democrats of course but says nary a word about why Republicans never did anything about it when they were on watch and seducing the canine or whatever else it was they were doing. Oh yeah, something about shaping the global economy in the hopes of security, integrity and ingenuity. :lol:

A penis? No...I believe David Frum is a Canadian....don't forget to hit the Jew-baiting too! It doesn't matter which party you blame it on...that only works in Canada!

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Unfortunately, your content contains terms that we do not allow. Please edit your content to remove the highlighted words below.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Tell a friend

    Love Repolitics.com - Political Discussion Forums? Tell a friend!
  • Member Statistics

    • Total Members
      10,712
    • Most Online
      1,403

    Newest Member
    nyralucas
    Joined
  • Recent Achievements

    • Jeary earned a badge
      One Month Later
    • Venandi went up a rank
      Apprentice
    • Gaétan earned a badge
      Very Popular
    • Dictatords earned a badge
      First Post
    • babetteteets earned a badge
      One Year In
  • Recently Browsing

    • No registered users viewing this page.
×
×
  • Create New...