Posted: September 23rd, 2008 | Author: Joe | Filed under: Economy | Tags: Economy, Opinion, Rant, Recession | No Comments »
I am SO confused.
According to the AP (and others) the U. S. economy has been in a recession since about Q4 of 2007. But just today they report:
“Bernanke: Recession more likely without bailout.”
Q: How can we enter a recession without a the government bailout of wall street if we’ve been in a recession for a year?
A: We haven’t been in a recession.
A quick search of this site turns up the following posts:
Well, I guess you get the idea… I’m not one to buy into the AP’s desire for a U. S. recession. Still, all snarkyness aside, this bailout business is more than a bit unsettling…
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Posted: August 4th, 2008 | Author: Joe | Filed under: Economy | Tags: Economy, news, Opinion, Rant, Recession | 3 Comments »
Of course it’s the AP, so we need to hack our way through the misdirections, doom-and-gloom adjectives and distractions to get the real point:
“Last year the economy grew by 2 percent, the weakest showing since 2002.”
They can’t resist throwing in ” weakest showing since 2002″, thus sidestepping the real fact that a 2% growth is NOT possible in a recession! In other words, what they’re saying is: “forget that we’ve been (purposely?) misleading you on the economy for the past 9-12 months, last year was the worst since 2002!”
Pay no attention to the man behind the curtain.
The headline should have been the same as the title of this post, but instead the AP falls back on pessimism:
“Growth weaker than hoped; economy shrinks in Q4″
The real story is this:
“The Commerce Department reported Thursday that gross domestic product, or GDP, increased at an annual rate of 1.9 percent in the April-to-June period.”
Increased.
A recession is a contraction for at least 2 consecutive quarters.
“That marked an improvement over the feeble 0.9 percent growth logged in the first quarter of this year and the outright contraction in the economy during the final quarter of last year.”
I guess good news doesn’t sell, otherwise they’d have titled the article correctly.
So what caused this “unexpected pause” in the recession?
“…sales of U.S. exports grew at a 9.2 percent pace in the second quarter, up from a 5.1 percent growth rate in the first quarter. The weak dollar has made U.S. goods cheaper to foreign buyers, helping to bolster exports.”
This is another aspect of economic reporting that irks me. We’ve been hearing for months how the value of the dollar has plummeted relative to the Euro. But, as with most things, this is not entirely bad. As the quote above illustrates – it makes our goods cheaper in foreign markets, so much so that U.S. Exports grew 80% !
And what about inflation?
“…prices rose at a pace of 2.1 percent, down from a 2.3 percent rise in the first quarter. Still, the second-quarter’s core inflation reading is outside the Fed’s comfort zone.”
I can appreciate that it’s “outside the Fed’s comfort zone.” It’s outside my comfort zone as well, but it’s a far cry from 70′s style, double-digit stagflation that many people seem to think we are experiencing.
Towards the end of the article, the AP does acknowledge:
“There’s been a lot of debate about whether the economy is on the brink of, or has fallen into, its first recession since 2001.”
Maybe we will fall into recession in the coming months. Maybe future analysis will show that we’re in one now. But I’m starting to see more and more analysis acknowledge the “debate” about a recession. This is in stark contrast to the almost clairvoyant-like predictions of the “impending recession” from a few months ago. Personally, I think we will either narrowly avoid a true recession, or it will be a mild one. But who am I to speak on such things? 
Technorati Tags: recession, econonomy
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Posted: July 7th, 2008 | Author: Joe | Filed under: spending | Tags: Alternative Energy, Cost of Energy, Green Energy, Opinion, Rant | 2 Comments »
From a recent article by the Associated Press:
“Even as more Americans look to shrink their carbon footprints, relatively few have switched to providers of electricity generated by wind, water and sun.“
Firstly, I’m not sure most Americans buy into the carbon footprint movement, but even so the AP’s analysis as to why so few are switching is completely wrong.
“People involved in the alternative energy industry said Americans are interested in reducing the amount of greenhouse gases they are responsible for“
Really? I’m guessing that if you polled the average, working class American and asked them “would you like to cut your green house gas emissions?” they’d say sure, why not?. But if you asked them a more directly, “would you pay more to cut your green house gas emissions?” you’d get an entirely different response.
The AP doesn’t refer to any such poll, so I wondered: what makes the “people involved in the alternative energy industry” think Americans are interested in cutting their individual green house emissions?
” — witness the popularity of compact fluorescent bulbs. “
Ah.. they’re mistaking the recent surge in compact florescent bulbs with care for the environment. To be fair, some people buy such things to lower their green house emissions, but I’d wager most Americans buy them because they lower their energy bills first and foremost.
The “experts” attribute the lack of New Yorker’s signing up for alternative energy providers to a general ignorance of the options. They quote Brian F. Keane, president of the not-for-profit clean energy-marketing group Smart Power:
“They don’t think wind and solar power can keep the lights on at night, keep the heat on the winter and keep the air conditioning on in the summer,…”
As a New Yorker who reads his energy statement every month and has considered switching, I can tell you that our power company makes it extremely clear that signing up for such alternative power source does not affect power delivery, only where the energy company derives its energy from.
Also, as a New Yorker who reads my energy bill every month, I can tell you the #1 reason New Yorkers choose not to sign up for alternative energy providers: The Cost.
Alternative energy providers cost a premium, and with most people already paying much more for gasoline and energy than they did a year ago, we don’t want to pay even more for what many see as an uncertain green house effect.
Sorry folks, when it comes right down to it, the pocket book wins out over our guilt about how we might be contributing to green house gasses. With their constant election headlines reminding us “it’s the economy, stupid” I wonder how they overlooked this aspect with regards to green energy.
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Posted: May 23rd, 2008 | Author: Joe | Filed under: Economy | Tags: Economy, Rant, Recession | 3 Comments »
There’s actually been some speculation recently in the media that the U.S. might “dodge” a recession. Personally, I’m quite surprised by this. How can we dodge something that we’ve been told we’re in the middle of for 6+ months? I guess I’m really more surprised that the media is changing “moderating” its story. I wouldn’t be surprised at all if the U.S. does dodge the recession bullet.
The main reason is entirely subjective in nature. Despite the doom and gloom in the headlines every single, unrelenting day, it just doesn’t feel like a full blown recession. There is plenty of data to illustrate that so far, the U.S. economy is not in a recession. What I’d like to do today is give some anecdotal reasons why I don’t see a recession.
1. Goods in Action.
I travel approximately 40 miles on an interstate every business day to work and back. When I started this commute (when I got this job), it was in Q1 of 2003. The U.S. was just edging out of a recession that began in 2000-2001, after the tech bubble burst and the Twin Towers fell. Driving to and from work at that time was bliss, from a traffic standpoint – there practically wasn’t any! Flash forward 5 years and it’s almost bumper to bumper some nights. And while the amount of 18 wheelers I see in my travels has lessened some over the past 6-9 months, there are still plenty of big rigs hauling merchandise, lumber, automobiles, dairy and more from point to point, day in and day out.
2. The Shopping Malls are Packed.
We took the kids to the mall a few weeks back when we needed to make way for a house showing, and let me tell you – that place was crowded! Again, it wasn’t the weekend before Christmas busy, but certainly more than I expected on a week night in the middle of “the greatest economic crisis since the stock market crash of 1929.”
3. The Restaurants are Packed.
A few days ago, we again had to vacate the premises for a showing but this time we went out to dinner. Nothing special. Just the local Appleby’s. Again, I was amazed at the volume of people for a Tuesday night. What are all these people doing eating out during a recession?! Aren’t they afraid they might lose their jobs? Apparently not.
4. My Employer Can’t Hire Enough Skilled People.
We’ve been losing people left, right and down the middle since the company was acquired last year. These people weren’t laid off – they left of their own accord. I’m not sure where they’re all going, but there are many places still hiring, I can tell you that much.
To be fair, many of these examples are affected by local economic conditions and markets. But there is national data to back some of this up. For instance, the most recent jobless claims report showed that unemployment was less than expected. Of course, the media has to color it in a negative light by stating “Data still at level indicating labor market is strained” But the fact remains that unemployment figures are still low for the recession we’re supposed to be in.
Also, the Dow Jones Transport Average which is often used in the stock market as a leading indicator of economic direction has been rising steadily over the past 3 months:
I just don’t feel like we’re in a recession. In fact, I feel that we may avoid one altogether. How about you?
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