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bogbrush

Bad News Is Good News On Gdp

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I really am baffled at the commentary on the latest GDP decline figures.

http://news.bbc.co.uk/1/hi/business/8166457.stm

While an improvement on the previous quarter, the figures may indicate that the recovery could take longer than previously had been expected.

"We are clearly out of the abyss but still have a difficult time ahead," said Brian Hilliard, economist at Societe Generale.

Well actually, the figures are 0.8% worse than before; we have a smaller economy than then. How on earth is that an improvement? Just because the rate of change is slower doesn't mean the direction is negative and things have got worse.

I dunno, maybe it's me.....

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Complete shocker.The NIESR reckoned plus 0.1% or at worst a flatliner. These figures will completely f**k up the PSBR and Darling's optimistic growth forecasts.

Edited by crashmonitor

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I dunno, maybe it's me.....

No, it is bizarre. Though I suppose that the fall is slowing, and you might expect it to level or even grow a bit next quarter if the trend continues. But it remains true that we are worse off than we were,

Peter.

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It's been a theme for months - a concerted and coordinated effort to talk up the state of the economy. No problem with them doing this - it would be equally irresponsible to talk the economy down every day.

However, for the last few weeks, the disconnect between the headline tag-line and the content of the articles and the choice of lead article versus all of the detailed secondary articles has bordered on fraudulent IMHO.

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It's been a theme for months - a concerted and coordinated effort to talk up the state of the economy. No problem with them doing this - it would be equally irresponsible to talk the economy down every day.

However, for the last few weeks, the disconnect between the headline tag-line and the content of the articles and the choice of lead article versus all of the detailed secondary articles has bordered on fraudulent IMHO.

Reality VS fantasy only ever ends one way.

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Complete shocker.The NIESR reckoned plus 0.1% or at worst a flatliner. These figures will completely f**k up the PSBR and Darling's optimistic growth forecasts.

I can't find the original release that stated positive growth - closest is

http://www.niesr.ac.uk/pdf/110609_84508.pdf

http://seekingalpha.com/instablog/98115-jo...direction-in-q1

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On BBC News website the headline is about the 0.8% decline in GDP, but on the same page a link to another headline 'shares rally on hopes of recovery'. A crazy world!

Edited by blankster

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Is that 0.8% net of newly-printed money?

That -0.8% accounts for government spending. Going to be a shocker once that subsisdes. THey cant stimulate forever.

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That -0.8% accounts for government spending. Going to be a shocker once that subsisdes. THey cant stimulate forever.

This was supposed to be the good quarter with QE and a possible weakening later in the year. So much for the W recovery we are still heading South.

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On BBC News website the headline is about the 0.8% decline in GDP, but on the same page a link to another headline 'shares rally on hopes of recovery'. A crazy world!

Bizarre isn't it. THe markets don't seem to have reacted to what is massive news IMO. Darlings spending plans were built around a retirn to growth by the middle to end of the year. Even with massive QE, that ain't happening.

Have the markets got so used to bad news that nothing can stop this bull run until it all goes completely T/U.

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... if the trend continues...

I don't see how you can take a change in rate of change as a trend, if we did that, then unless the rate of change was zero all projections would be going parabolic !

The only "trend" is surely whether a indice is positive or negative and by what factor. Therefore a continuing trend of -0.8% is a continueing negative trend.... simple !

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Bizarre isn't it. THe markets don't seem to have reacted to what is massive news IMO. Darlings spending plans were built around a retirn to growth by the middle to end of the year. Even with massive QE, that ain't happening.

Have the markets got so used to bad news that nothing can stop this bull run until it all goes completely T/U.

I think this is close to it.

Until the autumn of 2008 an annual deficit of £40bn was looked upon as grim news. Until Q1 2009 a quarterly decline of >0.5% was looked upon as grim news.

The catastrophe unleashed has redefined what "bad news" is called, so you get 0.8% quarterly decline termed "improvement", and doubtless if ever government deficit went below £100bn it would be hailed as a big piece of good news.

Look at petrol prices; when they went through £1/litre first time everyone went apeshit, then they fell below and when they went through it again it's "so what?.

The ability of the public to absorb bad news is being tested, but they seem very resilient for now.

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I think this is close to it.

Until the autumn of 2008 an annual deficit of £40bn was looked upon as grim news. Until Q1 2009 a quarterly decline of >0.5% was looked upon as grim news.

The catastrophe unleashed has redefined what "bad news" is called, so you get 0.8% quarterly decline termed "improvement", and doubtless if ever government deficit went below £100bn it would be hailed as a big piece of good news.

Look at petrol prices; when they went through £1/litre first time everyone went apeshit, then they fell below and when they went through it again it's "so what?.

The ability of the public to absorb bad news is being tested, but they seem very resilient for now.

I think the propogandists see that it's like boiling a frog. In the same way that a frog jumps out of the pot if the temperature changes too rapidly so the public would actually react if all the bad news was released at once, but it seems that you can drip feed the news slowly over a long period of time and people will accept it in the same way that the frog allows itself to be boiled to death slowly.

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