Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Can you spell, "Banana Republic?" But THEY are getting their shit together these days. Anyhow, that number (down -0.1%) will be revised and revised again. I'm to the point of not giving it much attention. Until the "final" estimate is announced.
If you look at the components most of that was reduction in government spending, specifically reduced defense spending.
Also, economic activity slowed down because of Sandy. Not unlike Katrina and Rita and congress just got its act for the devastation. Other parts were not that bad. But basically a lot of activity was postponed due to fiscal cliff at the end of the year. But next quarter can be better as reconstruction starts and inventories are rebuilt.
Maybe this would be a reminder to those that wants drastic government cuts in a short period.
I don't like it but I take issue with Max's banana republic characterization. How about getting informed a bit before shooting from the hip.
Revisions are a fact of life as certain data has to be estimated. It can be revised up and down. By the time you get final it will be like 9 months. I don't see how that makes a banana republic.
It is as if all that data collection is easy. Would you rather wait 9 months and get something then? Obviously other people disagree and they are happy to use estimates.
It has become a common sport to criticize the Fed a la monday night quarterbacking. If the QE was not present the interest rates would rise and credit would be more expensive and business activity would be down further against the growth. Calling it failed or unsuccessful would be incorrect. QE is not going to save us from all ills, especially when FED gets no help from congess, especially those from fiscally illiterates.
Finally, this is for the 4th qtr, latest QE king of instituted in the middle. Fed obviously saw potential slowdown and countered. I am glad it did.
We do have private sector employent up as government of all levels have been shedding jobs. It has been that way for the past couple if years. That is the foundation of slow growth in USA at this time.
Quoting: "I don't like it but I take issue with Max's banana republic characterization. How about getting informed a bit before shooting from the hip.
Revisions are a fact of life as certain data has to be estimated. It can be revised up and down. By the time you get final it will be like 9 months. I don't see how that makes a banana republic."
Ya, I had a more generalized view in mind when I said that, not the particular GDP numbers. (Remember when we used to publish GNP numbers? I guess those GNP numbers started not to look so good, so the gov't switched to the GDP number...I never saw an explanation for that. It just seemed to happen all of a sudden. Lotsa years ago, now.)
Inflation and stagnation are going to bite us in the ass, sooner or later. If the stock market is rising, there are still a huge number of people who simply are not benefitting from that fact. They don't HAVE enough money to INVEST. We saved Europe after the War with the Marshall Plan and could afford to do so. Everywhere else was in a shambles except maybe for NZ. So there was literally no real competition, and spending gazillions of dollars to rebuild Europe was certainly the thing to do.
On CNBC I'm hearing it mentioned that we may have to get accustomed to being happy with less. I've seen that since the 1970s. I heard a fellow from Chile say bluntly that we Americans will have to get accustomed to paying MORE for LESS. It's happening right now. Exigencies might push us toward cheapening the dollar these days. But we're gonna wake up one day paying $10 for a loaf of bread. The price of a loaf has doubled in the last 2-3 years. And hamburger? Fuggedaboudit.
The 4th qtr was not good for other economies either. UK is going in and out of recession (triple dip recession) Germany, the strongest economy in Europe had its GDP down by 0.7%
Reply to @Investor: "Also, economic activity slowed down because of Sandy."
Krugman was probably thrilled at the hurricane. Otherwise, it's always something, always excuses. The easiest monetary policy in history has not exactly resulted in much beyond weak-to-middling GDP numbers. I'd be curious what policy actions would be taken if we went into another serious slowdown.
"Maybe this would be a reminder to those that wants drastic government cuts in a short period"
Government spent more in Q4 than it did in Q3. The government isn't spending any less, nor would it have any appearance of remotely considering doing so.
"It has become a common sport to criticize the Fed a la monday night quarterbacking."
And there's just as many apologists (Leisman this morning: "GDP soared if you exclude all the negative components". It's good if you don't look at all the bad is a really laughable philosophy) who spin and spin when results - given the magnitude of Fed actions - are disappointing.
You are upset by people who are cynical and disappointed, but there are just as many people who have never met a government statistic they didn't like or somehow figure a way to spin as positive. Two extremes. I don't think we're a banana republic or that there aren't some positives, but I think there are some very serious issues with this country and some real concerns that are only getting worse the longer they are not addressed. If you think things are a-ok, you are welcome to your opinion and I don't take offense to it.
QE is not going to fix anything, but yet, we get open-ended QE and congresspeople who tell Bernanke to do more QE because they aren't going to do anything. Rather than having anyone do anything constructive, congress has an excuse to get nothing done and Bernanke - from all of his writings - clearly has absolutely no problem with more QE.
Nearly 5 years after 2008, we have open-ended QE. If QE 1, 2 and 3 were "successful" (in the traditional sense), why would there be the requirement of an "open-ended" fourth installment? If QE 1 was "successful" (in the traditional sense), why did we need QE2?
Or, is all QE is a series of "successful" short-term sugar highs? And then you get to a point where you have a market that has a tantrum when there is the hint that more QE is not coming and goes up when there is negative news because it believes that the negative news suggests more QE. It's all short-termism, and short term thinking is simply going to lead to more and more problems in this country; we have to start thinking about a long-term, sustainable path rather than endless QE and a congress that can't agree on anything. However, the chances of that happening are zilch - short-termism and vote buying and what is popular now is much more popular and gets congresspeople reelected.
"But from literally the moment the Fed stopped expanding its balance sheet at any point along the way, the market has almost immediately plunged into phases of sharp volatility marked by swift and extreme corrections ranging from -10% to -25% in a matter of weeks. So more than what anyone may believe good or bad about the global economy or corporate earnings or anything else for that matter, the power of outright asset purchases by the Fed and other major global central banks has unfortunately dominated financial markets by drowning out nearly all else that would otherwise be critically important in investor decision making." http://seekingalpha.com/article/1136501-is-it-too-late-to-ride-the-stock-rally?source=google_news
Is Congress at fault? Sure. But the current situation of Fed action and congressional inaction is not going to change anytime soon and - at least in my opinion - underlying problems will continue to get worse.
Reply to @MaxBialystock: "Inflation and stagnation are going to bite us in the ass, sooner or later. If the stock market is rising, there are still a huge number of people who simply are not benefitting from that fact. They don't HAVE enough money to INVEST."
Bottom 50% of the population owns something like 1% of the financial assets.
"might push us toward cheapening the dollar these days. "
The government had the goal of doubling exports in five years. How do you think that's accomplished? (Or not accomplished - "Exports are down big (5.7%) and that is likely not related to tax policy. " - http://market-ticker.org/akcs-www?post=216837)
" But we're gonna wake up one day paying $10 for a loaf of bread. The price of a loaf has doubled in the last 2-3 years. And hamburger? Fuggedaboudit."
Comments
Regards,
Ted
http://www.marketwatch.com/Story/story/print?guid=84A309F2-6AF1-11E2-AC0D-002128040CF6
Also, economic activity slowed down because of Sandy. Not unlike Katrina and Rita and congress just got its act for the devastation. Other parts were not that bad. But basically a lot of activity was postponed due to fiscal cliff at the end of the year. But next quarter can be better as reconstruction starts and inventories are rebuilt.
Maybe this would be a reminder to those that wants drastic government cuts in a short period.
I don't like it but I take issue with Max's banana republic characterization. How about getting informed a bit before shooting from the hip.
Revisions are a fact of life as certain data has to be estimated. It can be revised up and down. By the time you get final it will be like 9 months. I don't see how that makes a banana republic.
It is as if all that data collection is easy. Would you rather wait 9 months and get something then? Obviously other people disagree and they are happy to use estimates.
It has become a common sport to criticize the Fed a la monday night quarterbacking. If the QE was not present the interest rates would rise and credit would be more expensive and business activity would be down further against the growth. Calling it failed or unsuccessful would be incorrect. QE is not going to save us from all ills, especially when FED gets no help from congess, especially those from fiscally illiterates.
Finally, this is for the 4th qtr, latest QE king of instituted in the middle. Fed obviously saw potential slowdown and countered. I am glad it did.
We do have private sector employent up as government of all levels have been shedding jobs. It has been that way for the past couple if years. That is the foundation of slow growth in USA at this time.
Revisions are a fact of life as certain data has to be estimated. It can be revised up and down. By the time you get final it will be like 9 months. I don't see how that makes a banana republic."
Ya, I had a more generalized view in mind when I said that, not the particular GDP numbers. (Remember when we used to publish GNP numbers? I guess those GNP numbers started not to look so good, so the gov't switched to the GDP number...I never saw an explanation for that. It just seemed to happen all of a sudden. Lotsa years ago, now.)
Inflation and stagnation are going to bite us in the ass, sooner or later. If the stock market is rising, there are still a huge number of people who simply are not benefitting from that fact. They don't HAVE enough money to INVEST. We saved Europe after the War with the Marshall Plan and could afford to do so. Everywhere else was in a shambles except maybe for NZ. So there was literally no real competition, and spending gazillions of dollars to rebuild Europe was certainly the thing to do.
On CNBC I'm hearing it mentioned that we may have to get accustomed to being happy with less. I've seen that since the 1970s. I heard a fellow from Chile say bluntly that we Americans will have to get accustomed to paying MORE for LESS. It's happening right now. Exigencies might push us toward cheapening the dollar these days. But we're gonna wake up one day paying $10 for a loaf of bread. The price of a loaf has doubled in the last 2-3 years. And hamburger? Fuggedaboudit.
http://news.yahoo.com/germanys-economy-shrank-q4-091722735--finance.html
As I said US could have been better had the fiscal cliff and Sandy did not happen.
Krugman was probably thrilled at the hurricane. Otherwise, it's always something, always excuses. The easiest monetary policy in history has not exactly resulted in much beyond weak-to-middling GDP numbers. I'd be curious what policy actions would be taken if we went into another serious slowdown.
"Maybe this would be a reminder to those that wants drastic government cuts in a short period"
Government spent more in Q4 than it did in Q3. The government isn't spending any less, nor would it have any appearance of remotely considering doing so.
"It has become a common sport to criticize the Fed a la monday night quarterbacking."
And there's just as many apologists (Leisman this morning: "GDP soared if you exclude all the negative components". It's good if you don't look at all the bad is a really laughable philosophy) who spin and spin when results - given the magnitude of Fed actions - are disappointing.
You are upset by people who are cynical and disappointed, but there are just as many people who have never met a government statistic they didn't like or somehow figure a way to spin as positive. Two extremes. I don't think we're a banana republic or that there aren't some positives, but I think there are some very serious issues with this country and some real concerns that are only getting worse the longer they are not addressed. If you think things are a-ok, you are welcome to your opinion and I don't take offense to it.
QE is not going to fix anything, but yet, we get open-ended QE and congresspeople who tell Bernanke to do more QE because they aren't going to do anything. Rather than having anyone do anything constructive, congress has an excuse to get nothing done and Bernanke - from all of his writings - clearly has absolutely no problem with more QE.
Nearly 5 years after 2008, we have open-ended QE. If QE 1, 2 and 3 were "successful" (in the traditional sense), why would there be the requirement of an "open-ended" fourth installment? If QE 1 was "successful" (in the traditional sense), why did we need QE2?
Or, is all QE is a series of "successful" short-term sugar highs? And then you get to a point where you have a market that has a tantrum when there is the hint that more QE is not coming and goes up when there is negative news because it believes that the negative news suggests more QE. It's all short-termism, and short term thinking is simply going to lead to more and more problems in this country; we have to start thinking about a long-term, sustainable path rather than endless QE and a congress that can't agree on anything. However, the chances of that happening are zilch - short-termism and vote buying and what is popular now is much more popular and gets congresspeople reelected.
"But from literally the moment the Fed stopped expanding its balance sheet at any point along the way, the market has almost immediately plunged into phases of sharp volatility marked by swift and extreme corrections ranging from -10% to -25% in a matter of weeks. So more than what anyone may believe good or bad about the global economy or corporate earnings or anything else for that matter, the power of outright asset purchases by the Fed and other major global central banks has unfortunately dominated financial markets by drowning out nearly all else that would otherwise be critically important in investor decision making."
http://seekingalpha.com/article/1136501-is-it-too-late-to-ride-the-stock-rally?source=google_news
Is Congress at fault? Sure. But the current situation of Fed action and congressional inaction is not going to change anytime soon and - at least in my opinion - underlying problems will continue to get worse.
Bottom 50% of the population owns something like 1% of the financial assets.
"might push us toward cheapening the dollar these days. "
The government had the goal of doubling exports in five years. How do you think that's accomplished? (Or not accomplished - "Exports are down big (5.7%) and that is likely not related to tax policy. " - http://market-ticker.org/akcs-www?post=216837)
" But we're gonna wake up one day paying $10 for a loaf of bread. The price of a loaf has doubled in the last 2-3 years. And hamburger? Fuggedaboudit."
Transitory. lol.