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Gdp Us Only -1%

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GDP = private consumption + gross investment + government spending + (exports − imports), or,

now, according to doomberg, government spending is UP 5% this quarter due to stimulus.

so without the extra government spending (borrowing) the US GDP would have been quite a bit worse.

course, the soviet union and the old china probably had tremendous GDP, but produced little of value.

is this the course of the UK and the US...growth, but nothing to show for it?

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Also imports are down so much more than imports:

According to Bloomberg, Decreasing Exports subtracted 0.76% from GDP. At the same time, falling Imports added 2.14%. Net contribution of the fact that Imports are free falling twice as fast as Exports are = 1.38%.

If they were both falling at the same rate — if Europe and Asia’s consumers were hurting as much as ours – GDP would have been -2.38%.

The Big Picture.

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GDP = private consumption + gross investment + government spending + (exports − imports), or,

now, according to doomberg, government spending is UP 5% this quarter due to stimulus.

so without the extra government spending (borrowing) the US GDP would have been quite a bit worse.

course, the soviet union and the old china probably had tremendous GDP, but produced little of value.

is this the course of the UK and the US...growth, but nothing to show for it?

why is government spending part of gdp

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and yet....doomberg says the market is showing bullish signs, pricing in a recovery??

if the recovery is just so much like mark to model in banks balance sheets, then IMPO, the whole thing is going again, based on nothing other than optimism....course, dealers could be hyping to get people to spend their last savings with them....bonuses to pay and all that what?

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why is government spending part of gdp

cos paying dole is production.

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What's the official criteria for a depression?

I think it's something like 4 consecutive -ve GDP figures > 10% overall. Might be wrong.

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What's the official criteria for a depression?

I think it's something like 4 consecutive -ve GDP figures > 10% overall. Might be wrong.

snot gonna appen...bama gonno borrow and spend it away. seasy as spy.

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:huh:

GDP is not only still negative it is still declining at an increasing rate when one looks at the actual numbers.

The recession is not "easing", it is DEEPENING.

Three months of in-your-face falsehoods by the mainstream media have just been destroyed in seconds with one data release. The facts are irrefutable; the only remaining question is this: when will we see something approaching balance and honest reporting from the so-called media outlets?

Those "green shoots" were either marijuana plants (and were being smoked by the media) or worse, they have been running around with cans of green spray paint, "colorizing" the dead brown weeds, then pointing at them and screaming "green shoots!"

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What's the official criteria for a depression?

I think it's something like 4 consecutive -ve GDP figures > 10% overall. Might be wrong.

"A severe (GDP down by 10%) or prolonged (three or four years) recession is referred to as an economic depression, "

http://en.wikipedia.org/wiki/Recession

http://en.wikipedia.org/wiki/Depression_(economics)

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What's the official criteria for a depression?

I think it's something like 4 consecutive -ve GDP figures > 10% overall. Might be wrong.

we dont have depressions any more only downturns

http://mises.org/story/3127

We live in a world of euphemism. Undertakers have become "morticians," press agents are now "public relations counsellors" and janitors have all been transformed into "superintendents." In every walk of life, plain facts have been wrapped in cloudy camouflage.

No less has this been true of economics. In the old days, we used to suffer nearly periodic economic crises, the sudden onset of which was called a "panic," and the lingering trough period after the panic was called "depression."

The most famous depression in modern times, of course, was the one that began in a typical financial panic in 1929 and lasted until the advent of World War II. After the disaster of 1929, economists and politicians resolved that this must never happen again. The easiest way of succeeding at this resolve was, simply to define "depressions" out of existence. From that point on, America was to suffer no further depressions. For when the next sharp depression came along, in 1937–38, the economists simply refused to use the dread name, and came up with a new, much softer-sounding word: "recession." From that point on, we have been through quite a few recessions, but not a single depression.

But pretty soon the word "recession" also became too harsh for the delicate sensibilities of the American public. It now seems that we had our last recession in 1957–58. For since then, we have only had "downturns," or, even better, "slowdowns," or "sidewise movements." So be of good cheer; from now on, depressions and even recessions have been outlawed by the semantic fiat of economists; from now on, the worst that can possibly happen to us are "slowdowns." Such are the wonders of the "New Economics."

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What's the definition of a banana then?

http://www.jewishworldreview.com/cols/pruden041001.asp

A banana, as some of us in Washington fondly recall, is not always a banana. When Herb Stein, chairman of the Council of Economic Advisers in the Ford administration, was admonished by his boss not to use the word "recession" to describe a recession, he complied, reluctantly.

"From now on," he told a group of economic reporters, "I won't use the word 'recession.' I'll say 'banana.' When I say banana, think 'recession'. I think we must be wary of the risks of a banana."

When I hear people talking about banana's then I'll get worried.

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What will be interesting is where do we go from here. The current 'recoveries' in the US and UK are a predictable consequence of printing money and low rates. I guess the theory is that it becomes self fullfilling and the hope is that confidence and positivity can overcome the lack of any substance. Sure there is something to be said for the philosophy that says you can talk yourself into a recession and that you can think yourself out of one but nevertheless if the king really has no clothes, when winter comes he will catch a cold no matter how much he believes he is keeping warm.

Edited by campervanman

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"A severe (GDP down by 10%) or prolonged (three or four years) recession is referred to as an economic depression, "

http://en.wikipedia.org/wiki/Recession

http://en.wikipedia.org/wiki/Depression_(economics)

Intrade: Odds of a Depression

Sunday, January 18, 2009

OK, this is amusing. Although there is no formal definition of an economic depression, the most common definition is a sustained recessionary period with at least a 10% decline in real GDP from peak to trough.

And that brings us to the odds of a depression from Intrade Prediction Markets. (hat tip Asymmetric). This graph shows that traders believe the odds of a depression in 2009 are about 55%.

And how does Intrade define a depression? Here are the rules:

This contract will settle (expire) at 100 ($10.00) if quarterly GDP figures show the US economy has gone into a depression in 2009.

The contract will settle (expire) at 0 ($0.00) if quarterly GDP figures DO NOT show the US economy has gone into a depression in 2009.

For expiry purposes a depression is defined as a cumulative decline in GDP of more than 10.0% over four consecutive quarters. This is calculated by adding together the published (annualized) Real GDP figures (as detailed below). If these annualised figures add up to more than -10.0% over four consecutive quarters then the contract will expire at 100.

Example 1:

In Q1 the Final Real GDP figure is -3.5%

In Q2 the Final Real GDP figure is -2.5%

In Q3 the Final Real GDP figure is -2.0%

In Q4 the Final Real GDP figure is -2.3%

The sum of these figures is -10.3% so the contract will be expired at 100.

...

Negative quarters in the preceding year will count towards the total GDP decline for expiration purposes. For example, if the total decline in GDP from Q3 2008 to Q2 2009 exceeds 10.0% then the contract will expire at 100.

http://www.calculatedriskblog.com/2009/01/...depression.html

Found this after a good search there. I think I read this in Feb but I couldn't quite remember the details.

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What will be interesting is where do we go from here. The current 'recoveries' in the US and UK are a predictable consequence of printing money and low rates. I guess the theory is that it becomes self fullfilling and the hope is that confidence and positivity can overcome the lack of any substance. Sure there is something to be said for the philosophy that says you can talk yourself into a recession and that you can think yourself out of one but nevertheless if the king really has no clothes, when winter comes he will catch a cold no matter how much he believes he is keeping warm.

I would argue that is what happens in a boom prices move ahead of economic reality purely because of confidence and positivity.

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What will be interesting is where do we go from here. The current 'recoveries' in the US and UK are a predictable consequence of printing money and low rates. I guess the theory is that it becomes self fullfilling and the hope is that confidence and positivity can overcome the lack of any substance. Sure there is something to be said for the philosophy that says you can talk yourself into a recession and that you can think yourself out of one but nevertheless if the king really has no clothes, when winter comes he will catch a cold no matter how much he believes he is keeping warm.

It's not working in the US that's for sure. Durable goods tanked 2.5% this week and the GDP report shows consumers aren't playing ball. It's not going according to plan.

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It's not working in the US that's for sure. Durable goods tanked 2.5% this week and the GDP report shows consumers aren't playing ball. It's not going according to plan.

Clearly not enough ramping then.

We need more.

For a start will you please stop posting depressing news stories. I expect important news from now on about Katie Price.

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I would argue that is what happens in a boom prices move ahead of economic reality purely because of confidence and positivity.

Wouldn't disagree but every time reality is avoided, the probems just get bigger. Sure we can have rising house prices based on sentiment but if the means to pay back the debt is not there long term then those who buy now will just have a bigger problem when reality hits.

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Wouldn't disagree but every time reality is avoided, the probems just get bigger. Sure we can have rising house prices based on sentiment but if the means to pay back the debt is not there long term then those who buy now will just have a bigger problem when reality hits.

In la la land reality doesn't exist.

As long as you can keep rolling over debt who cares about paying it back, that's been the plan.

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Wouldn't disagree but every time reality is avoided, the probems just get bigger. Sure we can have rising house prices based on sentiment but if the means to pay back the debt is not there long term then those who buy now will just have a bigger problem when reality hits.

Not necessarily - here is a german way to induce feel-good factor without extra payment

http://www.telegraph.co.uk/news/worldnews/...promotions.html

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GDP wouldn't have been worse if government spending didn't increase, private consumption just wouldn't have fallen as much if the government didn't appropriate those resources. Now were seeing the full consequences of the "stimulus" aka "porkulus."

Also economic numbers follow moves in the stock market which is an indicator of social mood, which is why strong improvement in the economy has been seen since the bottom in march. This isn't over though, the biggest collapse is ahead as government finances implode.

Edited by domo

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