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Slogging along - economy grows 1%

Discussion in 'Political Discussion' started by STFarmy, Jun 26, 2008.

  1. STFarmy

    STFarmy In the Starting Line-Up

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    The economy, though taking its lumps, still grew 1%. And recession is officially staved off for another nine months, despite what some say/think.

    http://news.yahoo.com/s/ap/20080626/ap_on_bi_go_ec_fi/economy;_ylt=Atf1kK01pAwlSHB6bKGJMRKs0NUE

    "WASHINGTON - The economy turned in a better — but still subpar — performance in the first three months of this year, mostly spurred by stronger sales of U.S. products overseas.

    The 1 percent annualized increase in gross domestic product, announced by the Commerce Department on Thursday, marked a slight improvement from the government's previous estimate of 0.9 percent growth for the January-to-March quarter. And, it showed the economy logging stronger growth than the feeble 0.6 percent pace registered in the final three months of last year."
     
  2. Real World

    Real World Moderator Staff Member

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    I think these are revised 1st quarter figures. I'm curious to see where the 2nd quarter comes in next week, or the week after. The absurdity of oil is really troublesome to me. $4 gas, along with a couple of other issues, are making me re-examine my view on the possiblity of a recession. The move to put the food supply into fuel, the floods in the midwest, combined with the cost of energy is alarming. Fuel really affects the costs of all goods. EVERY one of my the venders we use is adding a "fuel surcharge" to their invoices. Bread at Market Basket went from 2 loafs for $4, to 2/$6. Ouch! If oil stays this high a recession is a serious possibility IMO. At the very least, we'll experience a much longer period of anemic growth. Fuel costs hurt all global economies.
     
  3. otis p. driftwood

    otis p. driftwood Experienced Starter w/First Big Contract

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    Part of your bread problem is that farmers are putting more and more land into corn...for the stupid ethanol crap (thanks Obama for that vote!) and there is or will be a wheat shortage as a result.

    What a world...when I think back over the years when we were paying farmers not to grow stuff...

    Sigh.
     
  4. STFarmy

    STFarmy In the Starting Line-Up

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    This is a good point. i'm not saying we weren't going to go into a recession, especially not with these horrible fuel and upcoming corn price increases. But I was happy to see good news. The lower dollar has made our products more competitive in international markets again, which I think contributed to the increased numbers.

    Thanks for pointing that out.
     
  5. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    The economy often lags behind the initial trend toward recession. With the inflation you discussed, this is no doubt hurting the average consumer and they will be buying less.

    It just takes time for manufacturers to feel it. There is absolutely no way we are not already in a recession and are bound for a pretty serious one. Things are in motion that can't be stopped or changed quickly.

    Housing is the #1 factor and oil/inflation is #2.
     
  6. otis p. driftwood

    otis p. driftwood Experienced Starter w/First Big Contract

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    And yet, with all the fear and so forth, Best Buy met or exceeded (I forget) earnings for Q1.

    If it was me, I'd be saving up for my oil bill this winter, screw the new TV/iPod/computer.

    But if the economy is growing, there's not a recession. Things have just been too good too long.
     
  7. STFarmy

    STFarmy In the Starting Line-Up

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    Things aren't good, but we are not in a recession. A recession is three quarters of the economy shrinking back with negative growth. We can't be in one for 6-9 months (depending on what the 2nd finanical quarter of this year was like). Doesn't mean things aren't bad, but we're not techincally in a recession. The weak dollar has made US goods on the international market more competitive as well, which is a small bit of good.
     
  8. otis p. driftwood

    otis p. driftwood Experienced Starter w/First Big Contract

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    Yes. China is actually importing some products from the US (merchandise, I mean.).
     
  9. Real World

    Real World Moderator Staff Member

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    Look up recession and then come back to us.
     
  10. Real World

    Real World Moderator Staff Member

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    I've maintained that the housing market wasn't going to send us into recession. That as long as people were employed, we'd avoid one. That, to me, still holds true, but what's changing is the surging price of fuel, and it's related affects on food. The price of goods is rising dramatically, as is the cost of daily living. That is not good. People will be restricting their spending to make up for increased costs elsewhere, which will significantly affect business' who would otherwise recieve that spending. Not good IMO. We could handle $2-3 gas, or $4 gas for a short period, but heating oil is being locked in at $4.69 locally for the winter. I'm becoming concerned about that. I've read where there are a sizable amounts of shorts on oil in July. Lets hope that has a positive effect on price.
     
  11. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    R-Dubya...housing is up there among the most important drivers of our economy. If housing stalls or stops, so does the economy. There is so much that goes into building & buying a house that fuels the economy it's mind boggling.

    Builders
    Electricians
    Plummers
    Cabinet makers
    concrete
    Wood
    Wire
    And many that I don't have time to list.

    Then when someone moves, it creates more stimuli. People buy new furniture, ovens, refridgerators, dishwashers, window treatments and on & on.

    Then you have the financial industry that is so closely tied to the housing industry with new mortgages.

    Read up on any major economic indicator site and you'll see housing listed at the top.
     
    Last edited: Jun 26, 2008
  12. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    I do economics for a living...I don't think I need to.

    If you read a lot about economics, there's been a lot of talk on new definitions of recession...check it out.

    you're using the old "classic" definition.
     
  13. Real World

    Real World Moderator Staff Member

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    I work in both real estate, and construction. That's my job.

    Construction is a key figure. Housing doesn't always equal construction spending. It certainly affects spending though. The reason why this housing bubble isn't as consequential as bubbles past, is it's nature. People aren't losing thier houses cuz htey've lost their jobs, they're losing their houses cuz of the nature of lending programs, and practices. People bought more than they could afford, while housing prices artificially skyrocketed. When the ARMs were up, prices equalized, and people bought and couldn't flip, the result was a bursted bubble. Zero or negative equity meant no room for a refi. The market got flooded with for sales, and lenders got overwhelmed with the resulting foreclosures for non payment. People who got caught, simply walked away. the fact that they didn't lose their home because of a loss of employment, meant they could rent and carry on. When you lose because you don't have any income, it affects the economy from top to bottom. We can survive the current bubble so long as people are working, and spending within reason. Oil at it's current price has me concerned, cuz it's affecting even the people who weren't in trouble to begin with.

    Remember a theory that explains everything, explains nothing. :D
     
  14. Real World

    Real World Moderator Staff Member

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    New definitions as defined by today's media.

    :D
     
  15. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    Our point was, are we or are we not in a recession. I agree with most of what you say here. But lost jobs typically lag far behind declining key indicators. There will be many jobs lost in the coming months and couple of years. Recession isn't avoidable...it is as much an economic reality as prosperity. Do you actually think it's possible for the economy to never receed? Especially after the stock boom followed by the real estate (false) boom.

    We can't stay up and we will come down...and then we'll go back up & on & on. I'm not telling you anything you don't already know, right?
     
  16. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    And...today's economists:D
     
  17. otis p. driftwood

    otis p. driftwood Experienced Starter w/First Big Contract

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    All I know is, my father is still painting and he's still painting in houses where they're doing complete re-do projects...one coming up is a kitchen this summer/fall...the house isn't even ten years old but they just want a "new" kitchen. That means brushed chrome appliances and marble instead of the granite that's there etc.

    Lovely.

    There's money out there. Some of the weirdest reporting is going on about the economy...I'm not saying it's a great economy, but I am saying in Feb of next year it will be in an "amazing new recovery!".
     
  18. shmessy

    shmessy Maude Staff Member PatsFans.com Supporter

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    #75 Jersey


    Best Buy met or exceeded expectations, while Amex, Mastercard and Visa came out today saying delinquencies are up over 30% from last year.

    What does THAT tell you? When it comes to the card, the psyche is "Slide and Ride, baby!"

    People are still spending, the problem is they're just not paying.
     
  19. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    I'm going to disagree with you on that...so next February, one of us will be right.

    I'll just change my screen name if I'm wrong!:D

    I'll also add that the housing market in eastern Massachusetts won't bottom out for another 12 - 18 months...any takers on that prediction?
     
    Last edited: Jun 26, 2008
  20. shmessy

    shmessy Maude Staff Member PatsFans.com Supporter

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    #75 Jersey

    Gotta log out, now guys. Time for my treadmill run where I can watch Lawrence Kudlow ("Right on the Markets and Right on America!") tell me how this is The Goldilocks Economy.
     

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