Posted on 05/29/2015 5:47:11 AM PDT by tellw
WASHINGTON (AP) -- The U.S. economy went into reverse in the first three months of this year as a severe winter and a widening trade deficit took a harsher toll than initially estimated. The Commerce Department says the overall economy as measured by the gross domestic product contracted at an annual rate of 0.7 percent in the January-March period. The revised figure, even weaker than the government's initial estimate of a 0.2 percent growth rate, reflects a bigger trade gap and slower consumer spending. It marked the first decline since a 2.1 percent contraction in the first three months of 2014, a slump that was also blamed on winter weather. Economists expect a rebound in the current quarter to growth of around 2 percent and expect the economy to strengthen later this year.
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Obama’s recession marches on.
A government made liquidity trap. ZIRP exists to bailout municipalities who depend on rising property values to finance their liberal schemes. Those values were falling precipitously in most large municipalities, particularly in poor areas.
How can the county assessor tell you your property value is up, when it’s really way, way down?
What should have happened is let the market clear RE prices down to their true market rate, let credit fall and interest rates rise perhaps into the 20% range. That would then attract new capital and investor/consumer confidence. Rates would then decline as money entered the market, bargains are picked up and credit begins to expand.
Instead the opposite happened and the prudent know that these interest rates are unrealistic. In RE for every 1% rise in the interest rate you must reduce the sales price by 10-12% to keep the same payment. Borrowers buy the payment, not the price.
The most frequent rate sinc 1947 to present is 7.5% with the median at 8.75% (data from here: http://www.fedprimerate.com/wall_street_journal_prime_rate_history.htm and just a random site). Let’s assume they’re wrong on the high side and a ‘real rate’ for home purchase is just 6% long term.
If you bought and financed at 4%, you’ll now have to take a 20%-24% haircut to sell. Who can know which price is correct? They’re praying for inflation. Hence the government is short circuiting the marketplace and literally causing its own recession.
Yup! Like TOTALLY man!
The 1920's depression was over in about 1 year (which led to the roaring 20's) even though it was as bad as the 1930's depression (which lasted over a decade).
The 20's depression ended so fast most of the American people today haven't even heard about it. The size of the government was reduced by half. Why did the 30's depression last so long? The size of the government was increased by half!
History tells us the only way we're going to get out of this financial mess is to drastically reduce the size and scope of the government so the American people can rebuild.
What no one seems to acknowledge is most of this is the direct effect of Obamacare.
This winter/spring people had to file taxes and deal with NeroCare. Plus they have had to sign up for and pay monthly premiums.
This summer and fall it will only get worse. Note the rate increases Insurance Companies are applying to their oversight Boards for. Blue Cross-New Mexico alone was asking for a 50% increase.
The other Big Loser that pushing these numbers down...Job Market. Sure they add 200k Jobs. 90% which are part time and we lose 150K full time Jobs.
Folks it is not going to get better until ObamaCare is eliminated. American Workers have lost the majority of their expendable Income to pay for leeches subsidized Health Insurance.
They are blaming it on statistical smoothing, but the idiots don’t realize that Q1 is adjusted upward, not downward.
Without the statistical adjustments, it likely would have shown a 2.3 percent dip in GDP.
Perhaps Shrub-era and its fading “fiscal control” as an earlier start, but also extending into today with serious contributions and leadership from Pickle_Face and Boner.
The second quarter bad news is now being transferred to the first quarter in order to avoid a decline two consecutive periods. Thus NO technical recession during Obama’s term.
Sounds like a good excuse for QE to continue. That should buoy the “market.”
Widening trade deficit threw the economy into recession?
Hey, I know, let’s sign a HUGE FRIGGIN’ FREE TRADE DEAL with the PACIFIC RIM!
Yeah, THAT’LL fix it!
And flood the labor pool with Millions more Illegal Mexicans and a couple Million Middle Eastern Jihadists...
Negative interest rates coming. Under the mattress is looking like a good option.
So, is the economy in an irreversible death spiral?
“Permit Daddy to get hired even though he’s a US citizen”...that’s funny right there!
Surprise, surprise, surprise.
With the nation now ruled by an utter nincompoop, Marxist-Muslim nobody and a plethora of unaccomplished nitwits, what would one expect?
Out of a recession? Hardly. This pit dug by the evil Obama regime and their Republicrat bunkmates is too deep to crawl out of.
America is finished......unless, along comes a Generalissimo Francisco Franco to save us from the maniacal neo-Marxists, race baiters, gigantic central socialist government and the accompanying big conglomerate businesses.
“It was cold.”
And there was SNOW!
Well, that’s sets the stage for another “Recovery Summer”! WooHoo!
FDR got elected to four terms based on the same kinds of lies.
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