Recession

[Mad_Michael]

Its more complicated than that.

You forgot to pat me on the head and call me "sonny boy" with this pompus remark.

[M.Dancer]

Didn't Canada have negative GDP in February? I thought it was -0.2%.

If so, then I'm sure it was nasty in Ontario.

Well hardly a negative GDP, it did decline 0.2% that month and for the year Feb 07-feb 08 it was +1.7

There's a long way to go before we hit negative GDP...the gdp for feb. was $1,231,528,000,000

http://www.statcan.ca/Daily/English/080430/d080430a.htm

[msj]

You forgot to pat me on the head and call me "sonny boy" with this pompus remark.

Oops, sorry, I guess I know better for next time.

But it is more complicated than what you stated or what I have stated.

That's why it's necessary to link to longish articles which you and perhaps jdobbin and maybe even M.Dancer are the only ones who not only read but probably also comprehend.

[lost&outofcontrol]

and the credit crunch. [warning, funny Beavis and Butthead clip on youtube]

[August1991]

I do not understand why you have been so adamant in fighting against transparency in government statistics - clearly the more reliable, relevant, and accurate we can make the statistics then we all (politicians, public servants, private business, regular joe six-packs etc) can make better decisions going forward.

I'm not "fighting against the transparency in government statistics". I just feel that changes in the CPI methodology have made it more accurate not less. Inflation is not a major issue in western countries now unlike in the pre-1980 world. Central banks are different - the US Fed in particular.

If I were looking for inaccurate official statistics, I'd look in a different way. For example, people increasingly don't answer pollsters or census forms at all but some other people, if anything, have an incentive to lie outrageously. (Supporters of gay marriage may claim to be gay when in fact they're not. The best ballot in Canada is not on election day but on census day.)

----

I don't dispute that the US is in a recession/economic slowdown but this is very different from what boomers remember from their youth and it's nothing like what their parents lived through in the 1930s. Why this obsession for another Great Depression? Dunno. The Left has a penchant to hate the West and America and it desires nothing less than to see a collapse of modern capitalism if only to say, "I told you so." I have no patience for such indulgence.

I suspect that if Western Civilization collapses, it won't be an economic cataclysm or indeed any kind of cataclysm. Rather, we'll just agree to compromise and put up with the nonsense around us. These changes don't happen in one generation.

and the credit crunch. [warning, funny Beavis and Butthead clip on youtube]

That cartoon and your point would have been better if they had raised the price a little each time they sold a candy bar.

Everyone on a street is curious to know what the house on the corner sold for. Nothing material has changed for them (they're not planning on moving) but they feel richer if they hear the selling price is higher. The stock market is sort of the same.

Now then. What happens if they hear the selling price is going down? (Bear in mind that they have no intention of moving so the price change for them is purely academic.)

Edited May 12, 2008 by August1991

[M.Dancer]

That's why it's necessary to link to longish articles which you and perhaps jdobbin and maybe even M.Dancer are the only ones who not only read but probably also comprehend.

.....probably not....but I fake it well enough.

[msj]

I don't dispute that the US is in a recession/economic slowdown but this is very different from what boomers remember from their youth and it's nothing like what their parents lived through in the 1930s. Why this obsession for another Great Depression? Dunno. The Left has a penchant to hate the West and America and it desires nothing less than to see a collapse of modern capitalism if only to say, "I told you so." I have no patience for such indulgence.

I suspect that if Western Civilization collapses, it won't be an economic cataclysm or indeed any kind of cataclysm. Rather, we'll just agree to compromise and put up with the nonsense around us. These changes don't happen in one generation.

Stop being so intellectually dishonest.

I have repeatedly said that we are talking about a recession and not a depression. And a mild one at that.

Yes, I have said this is worse than 1987 but 1987 was not even a recession.

Sure, some have said it is going to be a hard landing. And yes, some have mentioned that the housing market is facing its greatest challenge since the depression. Most people can recognize the difference between saying the housing market versus the entire economy is facing its greatest challenge since the depression but obviously you are unable to make the distinction.

Your continued dishonesty on this topic is, frankly, disturbing.

Edited May 12, 2008 by msj

[sharkman]

Stop being so intellectually dishonest.

I have repeatedly said that we are talking about a recession and not a depression. And a mild one at that.

Yes, I have said this is worse than 1987 but 1987 was not even a recession.

August wasn't claiming you were talking about a depression. Reread his post, he used a new paragraph after this "----" I was wondering why you were in such a snit over in the Federal Politics threads, but I see you act that way most of the time.

At any rate, there is a lot of talk out there about a depression coming in the US. It's not just the housing market that is the concern. I hope they are wrong, but the perfect storm of skyrocketing oil, the mortgage crisis, out of control trade imbalance and falling dollar all are difficult issues by themselves, never mind all at once.

Personally, I think it will only be a recession, but time will tell.

[msj]

August wasn't claiming you were talking about a depression. Reread his post, he used a new paragraph after this "----" I was wondering why you were in such a snit over in the Federal Politics threads, but I see you act that way most of the time.

At any rate, there is a lot of talk out there about a depression coming in the US. It's not just the housing market that is the concern. I hope they are wrong, but the perfect storm of skyrocketing oil, the mortgage crisis, out of control trade imbalance and falling dollar all are difficult issues by themselves, never mind all at once.

Personally, I think it will only be a recession, but time will tell.

Sure, I'm such a "snit" that I follow you around to make posts about you being such a "snit."

Oh, wait.....

[sharkman]

Follow you around? Not likely I've been reading this thread occasionally and posted in it once or twice.

But like I said, you treat most people this way, and I'm not sure why. You've insulted bush_cheney, August, Mad Michael, and now me, all in the space of two pages of this thread. I can understand when things get heated in a gay issues thread that insults will come, but in an economics thread?

Why do you fee the need to insult so many?

BTW, I didn't say you were a snit, but that you were IN a snit. I don't know what being a snit is.

[msj]

Follow you around? Not likely I've been reading this thread occasionally and posted in it once or twice.

But like I said, you treat most people this way, and I'm not sure why. You've insulted bush_cheney, August, Mad Michael, and now me, all in the space of two pages of this thread. I can understand when things get heated in a gay issues thread that insults will come, but in an economics thread?

Why do you fee the need to insult so many?

BTW, I didn't say you were a snit, but that you were IN a snit. I don't know what being a snit is.

I didn't insult Mad Michael. That was a misunderstanding.

As for August and BC2004, well, just calling them as I see them.

I don't take kindly to people misrepresenting my position (August has done so repeatedly and BC2004 misrepresented what statistics I was referencing for his own insulting purposes - if I have read his tone correctly).

I haven't insulted you above.

Yes, I have pointed out the obvious though - if I am the one in a "snit" then why am I the one being followed?

[bush_cheney2004]

Ben Stein weighs into the fray...What Me Worry?

Yet the national media is still selling us fear of a recession. One of the major national newspapers has a reporter who's desperately trying to peddle a story of national economic collapse even as the economy stays afloat.

And the beautiful part is that it's now crystal clear that we're not in a recession (we could be later -- anything can happen). There was just a report that showed first-quarter 2008 GDP growth was positive, meaning that as a matter of arithmetic we can't be in a recession, any more than a man who's gained weight can also be losing weight.

http://finance.yahoo.com/expert/article/yourlife/81478

[msj]

Ben Stein weighs into the fray...What Me Worry?

Yet the national media is still selling us fear of a recession. One of the major national newspapers has a reporter who's desperately trying to peddle a story of national economic collapse even as the economy stays afloat.

And the beautiful part is that it's now crystal clear that we're not in a recession (we could be later -- anything can happen). There was just a report that showed first-quarter 2008 GDP growth was positive, meaning that as a matter of arithmetic we can't be in a recession, any more than a man who's gained weight can also be losing weight.

http://finance.yahoo.com/expert/article/yourlife/81478

Yep, when Ben Stein weighs into the fray then it's best to take the opposite point of view: he is a politician rather than an economist.

He doesn't have the attention span to understand that GDP is revised over several months.

Now, lets look at the real world: Long slump may follow crunch: JPMorgan CEO

JPMorgan Chase & Co (JPM.N: Quote, Profile, Research) Chairman and Chief Executive Jamie Dimon on Monday told bank investors that while the current credit market crunch may soon be over, the U.S. economy could still face a deep and extended recession.

The slump in mortgage and corporate loan markets could bottom out this year, said Dimon, whose bank largely side-stepped the losses and mark-downs that have hobbled rivals during the past year.

Yet the economy may face a longer-term challenge even as financial markets begin to function again, the "slower burn" of a recession that may rival the severity of the 1982 contraction, he said.

Just to be clear - I don't think the recession is/will be that bad. I do agree, however, that it is "just beginning" but the probability of it being as bad as 1982 at 33% seems too high, imo. [oops, I think you have to either subscribe or sign up for the 2 week subscription with the WSJ for that last link - the quote from the article is:

In addressing the broader economic environment, Mr. Dimon said the current U.S. recession is "just beginning," adding that he foresees a one-in-three chance that this recession could match the economic woes of the early 1980s.

] Edited May 13, 2008 by msj

[msj]

Ben Stein weighs into the fray...What Me Worry?

Yet the national media is still selling us fear of a recession. One of the major national newspapers has a reporter who's desperately trying to peddle a story of national economic collapse even as the economy stays afloat.

And the beautiful part is that it's now crystal clear that we're not in a recession (we could be later -- anything can happen). There was just a report that showed first-quarter 2008 GDP growth was positive, meaning that as a matter of arithmetic we can't be in a recession, any more than a man who's gained weight can also be losing weight.

http://finance.yahoo.com/expert/article/yourlife/81478

As already linked to above but obviously it needs to be posted again:

Recessions Often Begin With Positive GDP Data

Or see this link: Recessions NORMALLY start with positive GDP

[White Doors]

Follow you around? Not likely I've been reading this thread occasionally and posted in it once or twice.

But like I said, you treat most people this way, and I'm not sure why. You've insulted bush_cheney, August, Mad Michael, and now me, all in the space of two pages of this thread. I can understand when things get heated in a gay issues thread that insults will come, but in an economics thread?

Why do you fee the need to insult so many?

BTW, I didn't say you were a snit, but that you were IN a snit. I don't know what being a snit is.

Aww... You missed me!!

[White Doors]

As already linked to above but obviously it needs to be posted again:

Recessions Often Begin With Positive GDP Data

Or see this link: Recessions NORMALLY start with positive GDP

Well that kind of makes sense doesn't it?

Would it be called the start of a recession if it came on the heals of negative growth?

wow, some people bury their head so far in the books they forget to come up for air.

I would revise it to say "Recessions Always start with positive GDP"

[msj]

Well that kind of makes sense doesn't it?

Would it be called the start of a recession if it came on the heals of negative growth?

wow, some people bury their head so far in the books they forget to come up for air.

I would revise it to say "Recessions Always start with positive GDP"

I agree. It is only common sense.

Yet Ben Stein seems to not have any...

[msj]

Median? I said "median family income". How is income defined? Is it disposable or gross, before or after transfers? How is family defined? Is it household? I have no problem with median but it's only the start of the analysis. (Incomes are usually divided by quintile... )

If Mom, Dad and their adult son live together and work at $50,000/year jobs, "family" income is $150,000. If the parents divorce and the son moves out, "family" income is now $50,000. According to the stats provided, the economy would be in crisis.

Have American families changed in the past 8 years? Uh, yeah I think so.

When it comes to economic stats of the sort, I always prefer real GDP per capita. Or, to finish on a partisan note, I also like Ronald Reagan's famous question twice asked: "Are you better off now than you were four years ago?"

Found an interesting post yesterday which touches on this tangentially.

As already linked to above, median family income has gone down in the US since 2001 when adjusted for inflation.

Now, that's a good point about the change in families over the past 8 years. But here is an interesting graph: Persons per Household.

Very interesting graph when one considers the statements above:

If Mom, Dad and their adult son live together and work at $50,000/year jobs, "family" income is $150,000. If the parents divorce and the son moves out, "family" income is now $50,000. According to the stats provided, the economy would be in crisis.

[Topaz]

On The View today, a financial planner was telling one of the women who owns a house in California that if she has to, to sell her house at a loss to get out of it in a hurry. She also said to pay off all credit cards and do not use them unless its for food and that their spends habits should come to an end until the crisis comes to an end.

[bush_cheney2004]

Still no recession sports fans.....US GDP has been revised up to 0.9% growth for 1Q 2008, not down. But I'm sure we can get some voodoo math to fix that!

http://biz.yahoo.com/ap/080529/economy.html

[bush_cheney2004]

On The View today, a financial planner was telling one of the women who owns a house in California that if she has to, to sell her house at a loss to get out of it in a hurry. She also said to pay off all credit cards and do not use them unless its for food and that their spends habits should come to an end until the crisis comes to an end.

A fool and her money are soon parted. What crisis?

[msj]

Still no recession sports fans.....US GDP has been revised up to 0.9% growth for 1Q 2008, not down. But I'm sure we can get some voodoo math to fix that!

http://biz.yahoo.com/ap/080529/economy.html

We already have the voodoo math: I have already pointed out numerous times above how inflation is understated which then overstates real GDP.

Add to that the fact that revisions take many months (the "final" 2008 Q1 comes out in a couple of months but there will be revisions through into 2009) and we won't get a recession call until it is likely already over.

While talking about voodoo there is also the voodoo of saying the economy is not in recession when real growth is at an annualized rate that is less than the population growth rate.

When real GDP per person is going down then that is a recession.... but that logic has already been discussed and whoosh one again, I'm sure.

[msj]

A fool and her money are soon parted. What crisis?

Real people are getting hurt - that's what happens when we have a lack luster recovery from the 2001 recession which leads many people to borrow against their houses.

Then, when credit tightens because maybe the banks shouldn't be lending to people without first confirming that they actually do have the income that they stated on their loan application, these people can't make ends meet.

Of course, when real estate prices decline then people can't go to their home ATM (called home equity lines of credit or HELOCs) to make ends meet.

You can call these people fools all you like but the reality is that most people are only a job loss away from foreclosure and this can have a widespread impact over the entire economy.

[bush_cheney2004]

Real people are getting hurt - that's what happens when we have a lack luster recovery from the 2001 recession which leads many people to borrow against their houses.

No, they are getting hurt by their own foolish choices. Why are so many more people not losing their homes? Typical to blame somebody or something else...anything but their own choices.

[msj]

No, they are getting hurt by their own foolish choices. Why are so many more people not losing their homes? Typical to blame somebody or something else...anything but their own choices.

Sure, just like it was Bear Stearns choice to make poor decisions and face a cash crunch.

Oh, right, they get bailed out, even while the top brass' bonus cheques are being cashed, because they are "too big to fail."