Still no recession: US economy grows by 1.9 pct

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Washington (dpa) - The US economy grew at 1.9 per cent in the second quarter of 2008, the government said Thursday, shaking off an ongoing credit and housing crisis that had some predicting a recession in the first half of the year.

The gross domestic product (GDP) figure was up from a revised 0.9 per cent in the first quarter, but less than the 2.3 per cent economists had predicted for the world's largest economy, according to Bloomberg financial news.

In a surprising announcement, the Bureau of Economic Analysis (BEA) also revised 2007's fourth-quarter GDP figures down to a 0.2- per-cent contraction from an earlier estimated growth rate of 0.6 per cent.

That revision could spark new talk of a recession over the 2007- 2008 period. First-quarter 2008 growth was revised down slightly to 0.9 per cent from 1 per cent. A recession is typically defined as two straight contracting quarters.

The stronger second-quarter growth in part due to a series of tax rebates issued to US consumers beginning in May as part of a 170- billion-dollar economic stimulus package passed by Congress. Consumer spending was up 1.5 per cent over the period.

The BEA in its advance estimate also attributed the improvement to strong exports, decreasing imports and higher government spending.

President George W Bush called the second-quarter figures "encouraging news" that showed the stimulus package was having a positive effect on the economy.

"It's not as good as we'd like it to be, but I want to remind you a few months ago there were predictions that the economy would shrink this quarter, not grow," Bush said in a speech in West Virginia.
 

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US home foreclosures on the rise


<!-- S BO --> <!-- S IIMA --> <table align="right" border="0" cellpadding="0" cellspacing="0" width="226"> <tbody><tr><td>
_44550492_ushomesale_226ap.jpg
Most states have seen some degree of home foreclosures

</td></tr> </tbody></table> <!-- E IIMA --> <!-- S SF --> The number of US homes in some stage of foreclosure more than doubled between April and June from the previous year.
Figures from research firm RealtyTrac showed that one in every 171 US households was in the process of losing their home - up 121% on last year.




You maybe living under a bridge but the government saids everything is fine. I'am sure it is for somebody. The economy is phucked up.
 

bushman
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And inflation is only 5%.

Nothing to see here folks.
Move along Move along.

:toast:
 

Conservatives, Patriots & Huskies return to glory
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The only stats that are accurate are the baaaad ones, wake up already

:lol:
 

Conservatives, Patriots & Huskies return to glory
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US home foreclosures on the rise


<!-- S BO --> <!-- S IIMA --> <table align="right" border="0" cellpadding="0" cellspacing="0" width="226"> <tbody><tr><td>
_44550492_ushomesale_226ap.jpg
Most states have seen some degree of home foreclosures

</td></tr> </tbody></table> <!-- E IIMA --> <!-- S SF --> The number of US homes in some stage of foreclosure more than doubled between April and June from the previous year.
Figures from research firm RealtyTrac showed that one in every 171 US households was in the process of losing their home - up 121% on last year.




You maybe living under a bridge but the government saids everything is fine. I'am sure it is for somebody. The economy is phucked up.


while 96% of homeowners continue to make their payments on time

right, you're the one that can see the light :103631605
 

bushman
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My favourite chocolate caramel shortbread is up 40% in the last year.

And that's at the cheapo superstore.

(nice with a cup of tea. mmm.)
 

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US home foreclosures on the rise


<!-- S BO --><!-- S IIMA --><TABLE cellSpacing=0 cellPadding=0 width=226 align=right border=0><TBODY><TR><TD>
_44550492_ushomesale_226ap.jpg
Most states have seen some degree of home foreclosures


</TD></TR></TBODY></TABLE><!-- E IIMA --><!-- S SF -->The number of US homes in some stage of foreclosure more than doubled between April and June from the previous year.
Figures from research firm RealtyTrac showed that one in every 171 US households was in the process of losing their home - up 121% on last year.




You maybe living under a bridge but the government saids everything is fine. I'am sure it is for somebody. The economy is phucked up.

Actually it means we have saturated the market as much as we can...everybody that can own their own home now does. Of course it overshoots a little...nothing is perfect.

You guys bitch no matter what...too funny. :nohead:
 

bushman
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The US has something like 2 million more homes more than it actually needs at the minit.

So when the moosic stopped a lot of folk were left without a chair.
 

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I'm glad for the good news. Let me check my stock portfolio made up of mostly Spyders and see if it has regained the 50% it lost since 8/07? NOPE!
 

the bear is back biatches!! printing cancel....
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listen to the stock markets not the GDP, GDP calls recession well after we already in it.....also stock pain usually starts before the pain is felt on the streets and stock market bottoms before the pain on the streets end......that's just how it works always has always will

30-40% haircut usually point GDP tells us recession took over a year into tech bubble collapse for GDP to call recession

plus GDP fluffed by inflation like eekster said

are your gas prices higher than 3 years ago with the dow at the same level it was 3 years ago?

are your utility bills?

are your food prices?

are your property taxes?

are your health care bills?

are your rent prices?

call it what you will be we aren't better off as a WHOLE than we were 3 years ago
 

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the bear is back biatches!! printing cancel....
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I'm glad for the good news. Let me check my stock portfolio made up of mostly Spyders and see if it has regained the 50% it lost since 8/07? NOPE!

scott said what i said but didn't go on a long rant about it....:grandmais
 

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Investors were greeted this past week with the staggering $61.7 billion dollar loss in the 4Q 2008 by American International Group (AIG) – a taxpayer owned company.
Already you and I have kicked in $173 billion into this puppy, and some pundits are claiming we will need to kick in $200 billion more.
These are massive numbers. This $173 billion “investment” in AIG approximately equals the increase in USA public debt in 2001, and the total budget deficits in 2002 and 2007.
This past week, Vice Chairman Donald L. Kohn of AIG appeared before a Senate subcommittee to spin the situation. At this point, all you can do is enjoy the screwing as the taxpayers are in too deep.
In the quoted text by Fed Chairman Bernanke at the beginning of this article, Bernanke is telling Congress that the growing deficit is endangering recovery. I agree.
Investors need to consider the potential of a second economic cascade.
It is old news that we had a housing crisis which started a financial crisis. We are in the deeply destructive phase of this recession. Now the initial causes of this Great Recession are just footnotes as the symptoms (unemployment, industrial production, buyers hunkering down) now have become the drivers.
We are in the deeply destructive stage of this economic crisis. There are no proactive defenses possible at this point. The governments and the people only can react to what is happening. Now the large decreases in employment, production, and investors hunkering down due to wealth destruction are undermining heretofore healthy segments.
The three biggest economic threats now are unemployment, debt, and/or a major financial (bank or government) failure somewhere in the world.
Unemployment
A government’s responsibility is to create an atmosphere where jobs are created. When this does not happen, the natives get restless. Already civil disturbances over unemployment have been seen across Europe and in China. May 1<SUP _extended="true">st</SUP> (Labor Day for most of the world) this year may be a focal point. The International Labor Organization forecasts 50 million jobs may be lost worldwide due to this Great Recession.
In America, for now, the guilty party is seen as Wall Street and corporate greed and not the Government. Many economists are trying to tell you unemployment is not bad compared to past recessions. To this I respond – bull$hit. The difference in this Great Recession is job destruction. This is different than the unemployment rates the punters toss around.
The job destruction rates are already higher today than our past modern recessions. The percent drop in employment is now larger than any post WWII recession exceeding the recession in the early 1980’s. Strangely, unemployment levels are not as bad.

Employment expressed as a percent of population has already fallen to mid-1980’s levels, and is falling like a rock as shown on the graph below.
But the scary thing is that the percentage of unemployed longer than 15 weeks is already higher than previous recent recessions as shown on the graph below. In February, 2.9 million persons had been unemployed for 27 weeks or longer, up from 1.3 million at the start of the recession.

Recessions or not, jobs are lost all the time. Conversely, jobs are created all the time. In recessions, the jobs lost exceed jobs created. Even the Bureau of Labor Statistics is now highlighting the employment decline.
And for a normal person that can walk and chew gum at the same time – it should be easy for you to deduce there is something wrong with the way unemployment numbers are determined. Unemployment plus employment equals total workforce. How can unemployment not be as bad as past recessions, yet employment is worse? The problem with statistically comparing data over the years is the changes in the data collection process – either methodologies or definitions.
Unemployment statistics are a political football. No government wants high unemployment numbers. So through the years, the definition of an unemployed person has been changed. The graph below, compliments of Shadowstats.com, shows the Bureau of Labor Statistics' (BLS) official U-3, BLS’s broader U-6 unemployment rates, as well as Shadowstats' adjusted alternative U-6 rate.

The BLS U-6 is total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workers. In simple language, the U-6 is the Government’s attempt to define the percentage of the population which wants to work full time but either works part time or cannot get a job period – but it does not count people who have given up looking for a job.
Shadowstats’ 18% unemployment is a big number. But even the Government admits the real unemployment is 14% without throwing in discouraged workers. It is not a big stretch to think 4% of the American workforce is discouraged and no longer looking for employment.
Jobs are evaporating in America and have been doing so since 2000. We live in a global economy that is already deeply in a recession. We are creating more and more service oriented jobs, and less and less industrial and goods production jobs. Industrial and goods production jobs are migrating overseas. These graphs below clearly demonstrate this trend.
saupload_1_1hansen2_1.jpg


seekingalpha.com
There are many theories on job creation, and the multipliers for secondary job creation. All jobs are not created equal. According to one study, every 100 jobs in durable manufacturing support 372 jobs in other industries, while every 100 jobs in business services supports 164 jobs elsewhere in the economy.
This employment multiplier is based on the following effects:
  • <LI _extended="true">The gain of employment of sub-suppliers who provide goods and services to that industry <LI _extended="true">The gain of employment to places where the employees spend their money
  • The gain of employment to government agencies that spends the tax dollars from the industry and employees.
Manufacturing has historically been a primary source for middle-class jobs, especially for workers without a college degree.

How many believe that manufacturing jobs will be returning? It is very likely Detroit will see a few bankruptcies – and a significant reduction in employment. So losing say, a million manufacturing jobs to Asia would take over 3 million retail jobs to fill the void. Government jobs – by definition – are an economic drag.
Few see re-growth of employment in industries of the past as we transform into a new reality – a green service based society. We will be unable to get to full employment as the new jobs being created carry lower employment multipliers. The weight for society carrying the burden of the unemployed not only will restrain recovery – but it is also possible it could trigger a second recessionary cascade.
The “stimulus” should have been targeted specifically at incubating small business growth to create jobs. Small business historically has been the jobs growth engine for America.
Do you think it is more important to stimulate credit so demand increases so we can buy more imported goods, or create jobs so more money is available and demand increases so we can buy more products from new businesses in America? The problem is that Government does not understand how to create an environment for job creation. They do understand how to flood the market with credit – and build debt mountains they have no chance of repaying.
Employment is America’s economic engine. The Government believes increased demand will restore jobs. There is some truth in this belief, but this method was used following the 2001 / 2002 recession – and now we are in the Great Recession. Demand stimulus is only a temporary fix, and will create another possibility deeper Greater Recession in the future if employment levels are not substantially improved.
Only innovation will create new industries and new jobs.
Update of Economic News
The BEA released the January 2009 Personal Income and Outlays which showed personal income increased 0.4 percent, and disposable personal income (DPI) increased 1.7 percent. The increase in personal income was attributed to several special factors:
  • <LI _extended="true">Pay raises for federal civilian and military personnel and
  • Federal cost-of-living adjustments.
If the government payrolls are excluded, personal income fell in January. From an economic perspective, falling income helps America’s global competitiveness. However, the problem is that overall America is producing less, and yet overall raised the payroll costs – not good news.
New orders for manufactured goods in January, down six consecutive months, decreased 1.9 percent. This was the longest streak of consecutive monthly decreases since the series was first published in 1992 and followed a 4.9 percent December decrease. Excluding transportation, new orders decreased 0.9 percent.
This past week the Fed and Treasury kicked off another installment in their TALF program – opening a $200 billion lending window for lending against certain auto loans, credit card loans, student loans, and small business loans. The concept is to add more liquidity – and therefore more potential credit – to these market segments. The program is slated to run until December 2009 unless extended.
Same store sales figures show a slight increase in February 2009, but if you throw out Wal-Mart (WMT), the numbers are ugly. The report from Mitsubishi (MMTOF.PK) makes good reading.

The Government now requires all banks which receive future TARP (bank bailout) disbursements to fully comply with Making Home Affordable guidelines. The goal of this program is to prevent foreclosures to “responsible” homeowners. I do not grasp how this will stop the fall of housing prices, but I am willing to bite my tongue until the program fails. However, others are not waiting – read here.

seekingalpha.com
saupload_1_1hanse4.jpg
Non-farm payroll employment continued to fall sharply in
February (-651,000), and the unemployment rate rose from 7.6 to 8.1 percent. Payroll employment has declined by 2.6 million in the past 4 months. In February, job losses were large and widespread across nearly all major industry sectors. The number of unemployed persons increased by 851,000 to 12.5 million in February, and the unemployment rate rose to 8.1 percent. Over the past 12 months, the number of unemployed persons has increased by about 5.0 million, and the unemployment rate has risen by 3.3 percentage points.
The Government’s attempt to keep credit based consumer credit growing is still working. Consumer credit grew at an annual rate of ¾% in January 2009. I suspect a large portion of this credit is already in default, and the growth in the amount of credit is due to the usury interest rates.

Filing for Bankruptcy: Spansion (SPSN). Freedom Banks of Georgia became the 17th bank to fail this year.
Economic Indicators Published this Past Week


seekingalpha.com
The WLI from ECRI continues to demonstrate deteriorating market conditions six months from now. In their statement last Friday, they said in part “that the end of this recession has yet to start taking shape”.



seekingalpha.com
Inflation is not an issue in any developed economy at this time. The US Future Inflation Gauge (FIG) published by ECRI shows inflationary pressures are lower than any period in the last 50 years. Inflation should not be a current concern for investors.
If you would like a summary of all government financial indicators, click here.
Disclosures: None
 

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