Pre-Depression Indicators Forecasted Rosy Economy

The Wall Street Journal ^ | Wednesday, August 6, 2003 | CYNTHIA CROSSEN

[TroutStalker]

Consumer confidence is down, but gross domestic product is up. Unemployment is relatively high, as are sales of new homes, but producer prices are down. The budget deficit is up, which is bad, but interest rates are down, which is good.

[AdamSelene235]

Gee, why do you mention it?

[proxy_user]

"But without the kinds of statistics painstakingly developed and tested over time, they were grasping at straws. Indeed, authors of a 1988 article in the American Economic Review analyzed the data available to economists in the 1920s and concluded "the Depression was not forecastable."

But with the statistics we have now, are we better able to forecast, or not?

If you believe the length of the depression was primarily due to the policies of the Roosevelt administration, how will Bush avoid making similar mistakes?

I don't think there's any sound methodology for forecasting what politicians will do in the future....

[the gillman@blacklagoon.com]

I find imagining them doing the worst possible thing at the worst possible time yields the most accurate predictions.

[BushCountry]

I also read the other day that the sun may collect solar dust and that we may go into another ice age. I wonder if we can can tell whether, or when this might effect the market.

[AdamSelene235]

Ice ages are the norm on this planet. If you manage to survive several thousand years to see the next one, I imagine you will have figured out how to cope with it.

Now the implosion of the GSEs and the American real estate bubble is a problem/opportunity that the majority of the posters on this board will experience during their lifetimes.

[LibertyAndJusticeForAll]

everything's rosy ping...

[BushCountry]

No, the recent news on Ice Age generation is solar dust and they predict it will be sudden and soon. I think it is nonsense, but I hate articles that are full of idle speculation. I think the possiblity of an ice age and/or the United States going into a deep depression in the next year or so are about the same.

[dalereed]

The entire article resembles conditions today all too close!

[BushCountry]

Everything is not rosy, especially unemployment, but the numbers are looking up in almost every other regard, in fact, it is projected that the increase in GDP will be around 6.5%. Company profits are up, durable goods are up, stock market up, tax rebates are in the mail, consumer confidence up, home sales up, consumer and business spending up, etc... Businesses, which cut spending on equipment and software in the first three months of this year, boosted such investment in the second quarter at a sizable 7.5 percent rate. That marked the biggest increase in three years. And, after six straight quarters of slashing spending on new plants, office buildings and other structures, businesses boosted this spending by 4.8 percent in the second quarter. The US service sector surprised experts with a fourth consecutive month of growth in July that helped fan hopes of a recovery, according to Institute for Supply Management. Demand for U.S. manufactured goods rose at the sharpest rate in three months in June as a solid rise in orders for long-lasting items joined with a small gain in demand for other goods, the government said Monday. Indeed, the survey shows that the percentage of CEOs saying they're worse off now than they were 6 months ago has dropped from 51% to 26%. Americans applied for mortgages to buy homes in near-record numbers the first week in August. Applications for mortgages to buy homes rose 6.9 percent in the week ended Aug. 1 to their second highest level on record.

[AdamSelene235]

I think the possiblity of an ice age and/or the United States going into a deep depression in the next year or so are about the same.

Then I would suggest you seek instruction in both economics and the geological history of the planet.

[dalereed]

"I think the possiblity of an ice age and/or the United States going into a deep depression in the next year or so are about the same"

Sure hope you are debt free!

[BushCountry]

You didn't read my post, geological factors are not the cause of ice ages according to recent studies. Solar dust collected by the sun is the major contributing factor.

[BushCountry]

But the chances of a depression and/or ice age coming in the next few years is nill!!!

[harpseal]

All this article does is recount the economic history of the USA. I do not understand why some people have a problem with that. Perhaps because the history does not support a viewpooint they have from very limited study of economics or history? now the statistical measures will tell us a great deal more about what has happened recently in our economy but they do not necessarily tell us everything one must collect the right statistics in order to be able to tell what is going on but still as far as I know no one has started making good crytal nalls that are accurate in fortelling the future.

[dalereed]

Ice age not probable, depression extremely likely!

[BushCountry]

Ice age not probable, depression extremely likely! ROTFLMAO, you guys actually believe this?

[LibertyAndJusticeForAll]

The economy is abnormal. Paul Craig Roberts once again explains what the WSJ finds so mysterious:
http://www.freerepublic.com/focus/f-news/958947/posts

And, like BofA, Siemens, Sun and others, now IBM is employing the same training tactics. It is all part of staying competitive:
http://www.freerepublic.com/focus/f-news/959133/posts

[B.Bumbleberry]

This is the ultimate nonsense, the underlying assumption of which is that the economy CAN be predicted in the first place. More to the point, what did economic statistics of the past in 1929 have to do with predicting the self-destruction that was soon to be visited upon the nation by the Smoot-Hawley tariff hikes and the tax hikes enacted to "balance the budget". The economy would probably have functioned well if the government had not committed economic hara-kiri.

[BushCountry]

Actually, reading the article implies that a depression is around the corner and according to the responses the author has a following.