Economy GDP revised down to negative 2.9% first quarter

[Engineer]

http://finance.yahoo.com/news/u-economy-contracts-2-9-123534819.html

The Commerce Department said on Wednesday gross domestic product fell at a 2.9 percent annual rate, the economy's worst performance in five years, instead of the 1.0 percent pace it had reported last month.

While the economy's woes have been largely blamed on an unusually cold winter, the magnitude of the revisions suggest other factors at play beyond the weather. Growth has now been revised down by a total of 3.0 percentage points since the government's first estimate was published in April, which had the economy expanding at a 0.1 percent rate.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased at a 1.0 percent rate. It was previously reported to have advanced at a 3.1 percent pace.

Exports declined at a 8.9 percent rate, instead of 6.0 percent pace, resulting in a trade deficit that sliced off 1.53 percentage points from GDP growth. Weak export growth has been tied to frigid temperatures during the winter.

Hard to export much when you're making less and less....that goes for jobs too. Can't export those after they're gone.

Hmm....I wonder what's driving the economy down? [Church Lady] SATAN!!! [/Church Lady].

The consumer has now left the consumer economy. The foundation bandaids are running out. What bubble can we pull out now to get it back on track and keep it going?

 

[realibrad]

http://finance.yahoo.com/news/u-economy-contracts-2-9-123534819.html



Hmm....I wonder what's driving the economy down? [Church Lady] SATAN!!! [/Church Lady].

The consumer has now left the consumer economy. The foundation bandaids are running out. What bubble can we pull out now to get it back on track and keep it going?

Here is something we both agree on.

We are already in a bubble. Its a bubble created by low interest rates coupled with huge amounts of money being printed.

 

[Engineer]

Here is something we both agree on.

We are already in a bubble. Its a bubble created by low interest rates coupled with huge amounts of money being printed.

We've been in a bubble of one form or another for several decades. The only way we can grow anything (usually the top incomes) is to keep a bubble going.

 

[nehalem256]

Hmm....I wonder what's driving the economy down? [Church Lady] SATAN!!! [/Church Lady].

The consumer has now left the consumer economy.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased at a 1.0 percent rate. It was previously reported to have advanced at a 3.1 percent pace.

How is consumer spending increasing driving down the economy?:hmm:

 

[realibrad]

We've been in a bubble of one form or another for several decades. The only way we can grow anything (usually the top incomes) is to keep a bubble going.

In my opinion, its because the well organized wealthy have lobbied to get capital investments promoted, which is activity that mainly benefits the upper classes.

The reason I see the gap of wealth growing at the rate it is, is due to the fact that the way they are creating this wealth, is by promoting these activities, and funding it through taxes and printing money, which is a form of inflation tax.

What do you think?

 

[Engineer]

In my opinion, its because the well organized wealthy have lobbied to get capital investments promoted, which is activity that mainly benefits the upper classes.

The reason I see the gap of wealth growing at the rate it is, is due to the fact that the way they are creating this wealth, is by promoting these activities, and funding it through taxes and printing money, which is a form of inflation tax.

What do you think?

I see that as a huge part of the gap (I do think the bubbles are designed for just that reason). Part of the gap is lower wage jobs replacing better jobs (but we've been down this road so no use to blow up a big discussion about that one again, lol).

Everything is in 'flow up' (the advanced form of trickle up) mode right now. Hell, I don't know if it's flowing up but rather being poured straight into the top without ever touching the middle or the bottom.

The top have the best government that money can buy....and they all turn to lobbyist after they leave DC.

 

[realibrad]

I see that as a huge part of the gap (I do think the bubbles are designed for just that reason). Part of the gap is lower wage jobs replacing better jobs (but we've been down this road so no use to blow up a big discussion about that one again, lol).

Everything is in 'flow up' (the advanced form of trickle up) mode right now. Hell, I don't know if it's flowing up but rather being poured straight into the top without ever touching the middle or the bottom.

The rich have always been able to take advantage of wealth generation. Its inherent to wealth. When you have the resources, you can leverage them to benefit more than those who are less organized and simply dont have the means to take advantage.

You take that inherent advantage, and couple that with the laws that were put into place, you get an explosion of the upper classes. This is where I think the majority of our efforts should be focused on. I'm not worried about inequality as something that is inherently bad, but I do think those at the top have stacked the deck.

Hurray for logical discourse!

 

[Jaskalas]

Main headline - 0.1% growth!
Months later, hopefully when no one is looking, 2.9% loss.

That's some nice accounting.

 

[fskimospy]

In my opinion, its because the well organized wealthy have lobbied to get capital investments promoted, which is activity that mainly benefits the upper classes.

The reason I see the gap of wealth growing at the rate it is, is due to the fact that the way they are creating this wealth, is by promoting these activities, and funding it through taxes and printing money, which is a form of inflation tax.

What do you think?

I think you guys are confusing what a bubble is.

Also, inflation has been extremely low in recent years. Much too low, in fact.

Overall I imagine we will see a return to growth in the second quarter.

 

[Engineer]

Main headline - 0.1% growth!
Months later, hopefully when no one is looking, 2.9% loss.

That's some nice accounting.

This is nothing new (for both up and downs). There are always 3 releases (1st one with two revisions). The 2nd and 3rd are more real data with the first one being somewhat of an educated guess pulled out of an economist ass.

 

[Kwatt]

How is consumer spending increasing driving down the economy?:hmm:

If consumer spending is 2/3 of economy.
Consumer spending must increase 2% to achieve a 3% growth.

Maybe?


.

 

[fskimospy]

Main headline - 0.1% growth!
Months later, hopefully when no one is looking, 2.9% loss.

That's some nice accounting.

Are you claiming that the stats are somehow manipulated? If so, how?

 

[realibrad]

I think you guys are confusing what a bubble is.

Also, inflation has been extremely low in recent years. Much too low, in fact.

Overall I imagine we will see a return to growth in the second quarter.

Maybe. To me, there is an investment bubble, where capital is flowing to investments and the returns are greater than the underlying value created. The only reason we see such large returns on the current investment vehicles is because more capital is flowing into the system.

 

[glenn1]

Are you claiming that the stats are somehow manipulated? If so, how?

I don't doubt there is some amount of "massaging" the numbers right before elections but it's likely minor and (somewhat) defensible since it represents normal judgement calls. I don't think there is widespread and deliberate falsification of stats like what goes on in Venuzuela or Zimbabwe.

 

[Kwatt]

I don't doubt there is some amount of "massaging" the numbers right before elections but it's likely minor and (somewhat) defensible since it represents normal judgement calls. I don't think there is widespread and deliberate falsification of stats like what goes on in Venuzuela or Zimbabwe.

Manipulation inplies organization and planning from gov economist.

I am going with optimistically incompetent.

.

 

[rudder]

If consumer spending is 2/3 of economy.
Consumer spending must increase 2% to achieve a 3% growth.

Maybe?


.

http://www.marketwatch.com/story/americans-are-getting-into-debt-just-to-get-by-2014-06-18

Not good when consumer spending helps drive the economy.

 

[Zebo]

There is also not as much "QE" anymore and budgets are flat...like 3.7T for last 5 years. Even though many people wouldn't say this helps growth they are a factor of GDP.

 

[Londo_Jowo]

Hard to export much when you're making less and less....that goes for jobs too. Can't export those after they're gone

The company for whom I work is looking to exceed $3 billion in sales for the first time. Business has been continuously expanding for years (slowed in 2008/2009) and most (70% to 75%) of the company's income comes from exporting the machinery manufactured in the US to entities in foreign countries.

 

[Jaskalas]

Are you claiming that the stats are somehow manipulated? If so, how?

Rushing to press with a false numbers is how the game is played. Standard procedure, I know. A 3% swing simply reminds me just how useless the original report is.

 

[fskimospy]

Rushing to press with a false numbers is how the game is played. Standard procedure, I know. A 3% swing simply reminds me just how useless the original report is.

What game? By who?

Why is the original report useless? What basis do you have for this? If the report is useless as you claim you could make a lot of money betting against its conclusions. What's holding you back?

 

[nehalem256]

What game? By who?

Why is the original report useless? What basis do you have for this?

If the weatherman routinely said it was going to be 70 degrees and it was equally likely to be 70 degrees, 110 degrees, or snowing how much attention would you pay to the report?

If the report is useless as you claim you could make a lot of money betting against its conclusions. What's holding you back?

Lucky numbers from a fortune cookie are also useless. Maybe I should use them to pick powerball #s? Seems like I could make even more money doing that!

 

[fskimospy]

If the weatherman routinely said it was going to be 70 degrees and it was equally likely to be 70 degrees, 110 degrees, or snowing how much attention would you pay to the report?

Good thing GDP numbers are:

1.) not temperatures
2.) don't vary to that degree

Lucky numbers from a fortune cookie are also useless. Maybe I should use them to pick powerball #s? Seems like I could make even more money doing that!

The market, along with lots of large, sophisticated, institutional investors don't think the numbers are useless. Thus, the market reacts to such reports. If the market is irrationally reacting to these reports, there is an opportunity to make an incredible amount of money.

So both you and Jaskalas should start betting on that and get back to us when you're both rich. When can I expect your first report on your progress?

 

[Newell Steamer]

,.. let the impeachment hearings begin!!!

 

[Zebo]

The company for whom I work is looking to exceed $3 billion in sales for the first time. Business has been continuously expanding for years (slowed in 2008/2009) and most (70% to 75%) of the company's income comes from exporting the machinery manufactured in the US to entities in foreign countries.

Thats great what do you guys make? 1 company doesnt make a national stat though

 

[nehalem256]

Good thing GDP numbers are:

1.) not temperatures
2.) don't vary to that degree

Sure it does. GDP growth in the US will generally be between what say +/-5%. It would be exceedingly rare for it to be outside of that range.

So being off by 3% is a pretty shitty estimate when your range of possible values is so small.

The market, along with lots of large, sophisticated, institutional investors don't think the numbers are useless. Thus, the market reacts to such reports. If the market is irrationally reacting to these reports, there is an opportunity to make an incredible amount of money.

GDP revised down significantly. Dow up 43 points.

How exactly do you make money trying to guess what irrational people will do?