Posted on 10/04/2010 2:34:28 PM PDT by blam
The Recent Collapse In Consumer Growth Has Been WORSE Than The Great Recession
Doug Short
Oct. 4, 2010, 3:32 PM
For the past several months, the Consumer Metrics Institute's Daily Growth Index has been one of the most interesting data series I follow, and I recommend bookmarking the Institute's website. Their page of frequently asked questions is an excellent introduction to the service.
The charts below focus on the 'Trailing Quarter' Growth Index, which is computed as a 91-day moving average for the year-over-year growth/contraction of the Weighted Composite Index, an index that tracks near real-time consumer behavior in a wide range of consumption categories. The Growth Index is a calculated metric that smooths the volatility and gives a better sense of expansions and contractions in consumption.
The 91-day period is useful for comparison with key quarterly metrics such as GDP. Since the consumer accounts for over two-thirds of the US economy, one would expect that a well-crafted index of consumer behavior would serve as a leading indicator. As the chart suggests, during the five-year history of the index, it has generally lived up to that expectation. Actually, the chart understates the degree to which the Growth Index leads GDP. Why? Because the advance estimates for GDP are released a month after the end of the quarter in question, so the Growth Index lead time has been substantial.
Has the Growth Index also served as a leading indicator of the stock market? The next chart is an overlay of the index and the S&P 500. The Growth Index clearly peaked before the market in 2007 and bottomed in late August of 2008, over six months before the market low in March 2009.
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(Excerpt) Read more at businessinsider.com ...
I hope we’ll stop hearing the mantra ‘nobody is owed a decent living’ in this country. Free traders live by it to the end though.
From "Bread and Circuses" to "Beer and Football". How far we've come. To those not familiar with the phrase, here's some of what Wikipeia says about it:
This phrase originates from Rome in Satire X of the Roman poet Juvenal (circa 100 AD ). In context, the Latin phrase panem et circenses (bread and circuses) is given as the only remaining cares of a Roman populace which has given up its birthright of political involvement. Here Juvenal displays his contempt for the declining heroism of his contemporary Romans.[1]: Roman politicians devised a plan in 140 B.C. to win the votes of the poor; By giving out cheap food and entertainment, politicians decided that this policy of "bread and circuses" would be the most effective way to rise to power.
You are right, but I don't think it had to be this way.
If the government had decided to allow the crash to happen quick and hard in late 2008 (no TARP and later no GM/Chrysler bailouts, etc), the dust would already be settling.
I think it would have been easier to truly grow out of the bottom than it is to slowly sink in this economic quicksand we are in now.
Strategically, it may have been better too. This is because we would have taken the world economy down with us so fast that they couldn't capitalize on our predicament. But now that our economic and military foes have had time to prepare, they are ready to pounce when the time is right.
So now we wait and watch the decline in slow motion, knowing the pain is going to be harder and longer than it had to be.
Bingo. People laugh and attack me like TV is mom and apple pie. Or that Saudi Prince Al Waleed’s (largest individual shareholder) Fox News is our “friend.” The public is so stupid. The 6 TV networks own at the cable channels. Each network on avg $5 to 6 a month from your cable bill whether you watch their channels or not.
America traded freedom for an Islamic TV clicker. The sheep don’t even get it.
What eventually happened to Rome? It imploded? What happened after that - the Dark Ages for a few hundred years.
I went to a party this weekend. Unfortunately it was a party but also watching state U in a big game. It is mindless crap to me. These people were mostly Repub with money. They have been out of college 12 to 30 years. They have no clue what is going on. Brainwashed by TV like everyone else. By watching TV, which supports the beast and our enemies, they are supporting their downfall. Idiots.
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