Monday, October 4, 2010

Gdp

Rosie Myth Debunking

Some highlight comments on recent GDP results in the US. It has been interesting to see the v shaped recovery (6%+ GDP in 2010) that was touted by many 12 months ago evaporating. What is worrying is that the stimulus and zirp are having little real effect ie even with these the recovery is subnormal, and one could validly ask whether the US is even out of recession - certainly no sign in the job market. I suppose we have no entitlement to v shape recoveries or ever improving standards of health and wealth. I'll post an interesting (to me) multi decade chart showing recessions and growth in SP 1870 - 2010

Posted by bellwether @ 05:20 PM (3065 views)
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One thought on “Gdp

  • Bellwether – yes Keen deals with this in his lecture – posted yesterday. Out of each recession since the 1930s the growth has been more and more anaemic. And after a little debt destruction we have got back to pre – recession employment levels by having more debt.

    Keen argues that after each recession, debt was increased, but now we have reached a tipping point. If you have time – i would really recommend this is watched.

    I read the article and i think this is key

    “First, there seems to be quite a bit of dissent at the Fed over further balance sheet expansion. While Chicago’s Evans and New York’s Dudley voiced support on Friday, others like Dallas’ Fisher, Kansas City’s Hoenig and Philadelphia’s Plosser are skeptical. In other words, QE2 is not a done deal.”

    We know that the fed has merely rolled over the liquidated assets to buy new ones – so far. I think that IS political.

    Even if there is QE2, then i personally think thats the final roll of the dice, because if thats not seen to work then i can see any attempt by Bernie to go for QE3 being blown out of the water before its allowed to be embryonic.

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