Posted on 11/09/2007 12:29:43 AM PST by JohnHuang2
Federal Reserve Chairman Ben S. Bernanke said yesterday the dollar remains the world's reserve currency and while its decline is raising oil prices and a threat of inflation, he doesn't expect it to seriously crimp the economy or consumer spending power. Continues...
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Has anyone seen my Recession?
If this "very bad" booming economy doesn't tank soon, liberals will all be on suicide watch, poor dears. A survey by the World Economic Forum ranked America's economy No. 1 for competitiveness and innovation, so liberals respond by moping about the subprime nonsense.
These same liberal ninnies claimed the Soviet Union would bury us with its dazzling prosperity. The Soviet Union then collapsed, but liberals still claim Cuba is a prosperous paradise -- produced tons and tons of sugar last year! Top that, America! Countless Cubans have risked their lives on rafts and inner tubes to escape Cuba’s wonderful health care system.
Liberals know they can't get Hillary elected without a recession, so they've been busying their little selves -- cranking out "news" articles and flooding the airwaves (even more than usual) with, 'Yes, the economy grew faster than expected, BUT . . . yes, job growth was more than projected, BUT . . . yes, income came in above estimates, BUT . . . and, in other news, a corner grocery store closed down in North Dakota . . .'
Libbies are waging a relentless attack on the economy to get consumers to bail and get their "recession" going, these patriots.
Traitorcratic Party money honcho George Soros said Tuesday that America is "on the verge of a very serious economic correction" and that China with its economy 80 percent smaller than ours is a real "winner". In response, the stock market soared 117 points.
Since the summer's 'credit crunch' and subprime 'meltdown', liberals have been screaming RECESSION! RECESSION! and their "analysts" have been saying a recession is imminent. Here's an update on how well their masterful plan has worked:
* The Commerce Department reported last week that real GDP grew at an annual rate of 3.9 percent, indicating the "imminent recession" is already in trouble. Liberals insist it’s just a flesh wound. "Analysts" predicted growth would slow to a 3.1 percent rate. Had it not been for housing, real GDP growth would have been around 5 percent, a blowout pace. The total GDP, measured in current-dollars, is about $14 trillion. Liberals claim the economy under rapist Bill Clinton was paradise. But to return to the ‘awesome’ Clinton Tech Bubble Economy, you would need to shrink the GDP by $4 trillion, lop off a chunk of living standards and raise the jobless rate to 5.6 percent, Clinton’s average. During Clinton’s last year in office, the GDP ‘grew’ 1 percent in the first quarter, shrank -5 percent in the third quarter and limped along at 2.1 percent growth in the fourth. It was those Bush tax cuts -- had to be.
* The core Personal Consumption Expenditures index (the Fed's favorite inflation gauge) stayed steady, in a further setback to The Imminent Recession. Prices rose at a 1.8 percent annual rate, below the fed's 'comfort zone' upper limit of 2.0 percent. In more bad news, personal income rose a solid 0.4 percent in September, same as August. Run!
* Consumer spending rose from 1.4 in the second quarter to 3.0 in the third quarter -- just what you would expect from an economy sliding into recession.
"One of the reasons why people are continuing to spend is because the nation's employment climate has managed to stay fairly sturdy through all the problems," the AP admits. Another reason why people are continuing to spend is because analysts are full of it.
* As measured by the ISM index, manufacturing expanded in October. Always looking for the bright spot, the press screamed that this was bad news because the index went from September's reading of 52 percent, indicating expansion in the sector, to October's reading of 50.9 percent, indicating expansion in the sector. Undoubtedly, strikes in the auto industry had nothing to do with this.
* As measured by the ISM index, the service sector of the economy -- representing a tiny 90 percent of the economy -- accelerated in October, the index rising to 55.8, up from 54.8 in September. "Analysts" had forecast the index would fall to 54.0.
* The Commerce Department reported last week that construction spending rebounded in September, rising by 0.3 percent -- best performance since May, with spending by private builders on commercial projects rising to an all-time record. Relying on the insane rantings of Paul Krugman, "analysts" had predicted a 0.4 percent drop in construction spending.
* The Labor Department reported on Friday that the jobless economy had produced 166,000 new jobs, a day after CNN said "economists were looking for another month of sluggish job growth."
As legions of sluggard "economists" were forecasting "sluggish" job growth and debating whether or not we're in a recession because some people got bad loans, the 'sluggish' economy 'sluggishly' added jobs in business services, restaurants, bars, temp-work firms, hotels and motels, management, schools, architectural and engineering services, accounting and book-keeping firms, legal services, hospitals, technical consulting services, etc., etc. Bring back Jimmy Carter!
Look. I'm trying to be magnanimous here. I am not gloating. If I were gloating, wouldn't I mention what "analyst" Dennis Gartman said on CNBC just minutes before the jobs report was released? He said "I wouldn't be surprised if we have a very bad job number this morning." Appearing on the same panel, Robert Brusca, another Nostradamus, predicted just 75,000 new jobs because "I believe the economy is still weak." The "consensus" forecast among "analysts" was for 80,000 sluggish new jobs in October. The "weak" economy ended up creating more than double that, logging 50 straight months of job growth, an all-time record -- but since I'm not gloating, I won't mention any of this.
The 9/11 attacks, Enron, corporate scandals, hurricanes Katrinia and Rita, skyrocketing oil, Afghan and Iraq wars, subprime 'meltdown', housing correction, yet you still get 8.5 million new jobs, 24 straight quarters of growth since 9/11, real GDP up $1.5 trillion, after-tax real income up nearly four grand per capita, shrinking deficit, tame inflation, rocketing exports, booming stock market -- just can't keep a 'weak' economy down anymore.
With all the suffering in America from Bush's horrible economy, you'd think liberals by now would produce some evidence of it. In a shock to libbies, most people say their finances are in good shape and show little inclination of wanting to flee to China. GDP for the third quarter shows the economy's in hyper-drive, but all liberals can talk about is Merrill Lynch, as if they expect real Americans to respond by voting next year solely on the basis of Merrill Lynch's balance sheet. "THE WHOLE ECONOMY DOESN'T MATTER! TELL ME ABOUT MERRILL LYNCH!"
Even in the worst-case scenario liberals can hope for, after-tax losses to banks from bad subprime real estate loans won’t be such a big deal for an industry that was pushing $150 billion in after-tax earnings last year.
As for "analysts", they say their forecasts were totally screwed because (1) they didn't know exports were so strong because of the lower dollar (they had no idea lower prices = more sales) and (2) their inflation forecasts were off and (3) their forecasts for a build-up in business inventories were off, but *3* was off because *1* and *2* were off -- other than that, they were right on the mark.
If you look at the track record of these assorted "analysts", to be considered an "expert" you need to maximize your number of wrong predictions, the more wrong you are, the more you're called an "expert" in the liberal media. Take gold and oil prices and the "weak" dollar. If you're an expert, what you do is go with a thoroughly outdated, '70s economic model that doesn't know there's a global industrial revolution going on and doesn't factor in global economic growth running at 5 percent per year, oh, and be careful to forget this means added demand for oil and other commodities which tends to jack up the price of oil and other commodities but the added global production means more goods and services to soak up the money supply, so you get an export boom and puny inflation and the 10-year Treasury note just north of 4 percent (4.35%) and the 30-year bond at 4.65 percent -- but, being an expert, you want to be wrong, so you go with your outdated model forecasting stagflationary nonsense that doesn't fit the data, i.e., rising stock prices (very little of it in the '70s), rising business capital, economy in hyper-drive, etc.
My model says Hillary gives a concession speech next November.
Anyway, that's...
My Two Cents...
JohnHuang2"
Have a great weekend, y’all — God bless!
Adding your 2 cents would be GRRRRREAT for the economy. Thanks JohnHuang2!
bmark for later, thanks!
We may or may not have a recession. If the global shite hits the fan, the dollar will look really good again as a store of wealth.
When the Canadian dollar is worth more than the American dollar, Bernanke is whistling in the dark here. Or smoking greenbacks in his bong.
The subprime scandal is breaking, a reminder of the earlier S&L bailout of the late Eighties under another president named Bush. This will be laid at the GOP’s door because we held all three elective branches when this situation developed.
Yes but the wage gap... Someone stocking shelves at Wal-Mart should be making the same as a vascular surgeon.
/s
You've got plenty of company, though. Have a great weekend.
Greatest story never told.
Yep, and I love it when the dimocrats start using kids and waitresses to tell us about the economy.
Must read commentary! Thanks for taking the time to itemize actual facts about our present day economy. Not even the mortgage industry which got itself into the predictable results of greed and shady practice, and the auto industry which refused to face the facts of their own policies, can cause the entire American economy to falter. However, higher taxes and more government regulations can make it tank.
Does anyone in DC understand this?
Thank you so much for this excellent wrap-up!
Democrats simply refused to be embarrassed by ANY scandal whatsoever, but Republicans can ALWAYS be counted upon to almost eagerly absorb the full frontal blow of anything dirty the DB Media pitches into the circulatory system of America's conversations.
These currencies ebb an flow... wax and wane over time in an almost cyclical manner like 11 year sun cycles. While Ronald Reagan was in office, the dollar dropped like a rock and began one of the biggest periods of magnificent growth and prosperity this nation has ever seen. So big in fact it flowed through the earlier Bush regime you mentioned and even eight more years of one of the ditziest, dirtiest democrat regimes in history!!!
As someone pointed out to me today, it’s because once again we’re trying to have guns AND butter. We did it in the eighties, and we did it before that back in Vietnam. Shared sacrifice in wartime turns out to be a critical success factor on many, many levels.
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Nailed it. Those are exactly the issues that have those who have done their homework worried.
Sorry John. I respect your writing but you missed the real systemic threats on this one.
LBT
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bfl
I can only hope your predictions are better than mine. I am sold on an upcoming recession. I guess we’ll see.
The real estate crash and liquidity crisis are real. This is no drop in the bucket. The wealth-effect is looking down for most people.
Consumer sentiment is the lowest in years. 70% of our GDP is based on consumer spending, much of it based on consumer debt. Through a lot of recent bad news, consumers have kept their torrid spending pace. This can’t continue. No, I’m not saying this won’t continue — I am saying THIS CAN’T CONTINUE. Incomes have not kept pace with spending. Spending sapped not only saving but debt as well. Now the debt machine is screeching to a halt. Unless you see salaries soaring in the near future, I fail to see how spending keeps up, especially while consumers are saddled with mush of their income already committed to service their existing debt.
Oil is running at $100 a barrel. Speculation may cause that to drop but the week dollar will still cause it to be very high for the foreseeable future. That is going to work its way into the economy.
The Dow Jones Transportation Index is plunging. If trucking is well off, why is the booming economy not asking for an increase in trucks to move those goods? If spending is to keep up, then you would think stores would be ordering new goods as fast as they are being depleted. Yet trucking is way down. How does that figure in to a booming economy? It doesn’t.
There are series inflation fears ahead in both energy and food. These are not bullish indicators for the economy in the immediate future.
With the dollar plunging lower, exports get a boost, but the cost of everything imported will soar. Guess what. We still import way more than we export and as long as that is true we will be hurt more by paying more for imports than we will be helped by selling more exports (at a lower price caused by a weaker dollar).
Tax revenues in places like California are plunging. Government love to waste lots of money, but they are about to have lots less money to waste.
I hope the economy is healthy, sound and booming, but I can’t see it. The debt/deficit economy seems in dire need of a reality check. We can’t just keep borrowing our way to prosperity. It is not sustainable.
I would like to hear the economy will soar and my income along with it for the next 20 years. What I wish for and what I expect are 2 completely different things. The post above ignores as much bad news in the economy as it highlights good news in the economy.
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