^ That's not a universally accepted definition. From what i've read, that's something TV commentators use, but it's not a bonafide economic definition.

7/31/2008 1:55:23 PM

Quote :

"I thought the definition of a recession was two quarters of negative growth. We arent in one."

The NBER looks at a range of metrics before they declare. Generally, if we have negative GDP, all or most of those metrics that they look at are down, and the GDP is just a summation and one that can be easily discussed in regards to recessing. However, I have seen some chatter in places that we could get an officially labeled recession this go round without negative GDP.

7/31/2008 1:58:25 PM

Quote :

"Q: The financial press often states the definition of a recession as two consecutive quarters of decline in real GDP. How does that relate to the NBER's recession dating procedure? A:: Most of the recessions identified by our procedures do consist of two or more quarters of declining real GDP, but not all of them. According to current data for 2001, the present recession falls into the general pattern, with three consecutive quarters of decline. Our procedure differs from the two-quarter rule in a number of ways. First, we consider the depth as well as the duration of the decline in economic activity. Recall that our definition includes the phrase, "a significant decline in economic activity." Second, we use a broader array of indicators than just real GDP. One reason for this is that the GDP data are subject to considerable revision. Third, we use monthly indicators to arrive at a monthly chronology. "

http://www.nber.org/cycles/recessions.html

7/31/2008 1:59:22 PM

Quote :

"I thought the definition of a recession was two quarters of negative growth. We arent in one."

yes, that was my point of posting that.

here's one definition, and other organizations define it similarly
http://www.nber.org/cycles.html

Quote :

"The NBER does not define a recession in terms of two consecutive quarters of decline in real GDP. Rather, a recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. For more information, see the latest announcement on how the NBER's Business Cycle Dating Committee chooses turning points in the Economy and its latest memo, dated 07/17/03. "

7/31/2008 1:59:38 PM

2 quarters of negative growth is a definable thing. The NBER definition seems to have alot of wiggle room built in.

But thanks for the info. I didnt know there are different definitions for it.

7/31/2008 2:07:30 PM

Quote :

"The NBER definition seems to have alot of wiggle room built in."

that's kind of the point.
Not so that people can get all political about pointing fingers if we are or aren't in one, but so that more factors can be taken into account. The GDP is not and should not be the sole indicator of the health of the economy

7/31/2008 2:11:06 PM

I agree lion, but you have to have a very clear definition when discussing a recession. I think the GDP is as good as any. imo

The reason being, is that the word recession is thrown around for political reasons and to stir up emotions. I think it would be better served to actually having some hard numbers first before tossing it out.

[Edited on July 31, 2008 at 2:26 PM. Reason : .]

7/31/2008 2:24:16 PM

Why a very clear definition? So that you can join the chorus of the sky is not falling camp because GDP is positive? You're talking about something as complex as the economy, there is nothing clear about it. And what does it matter if a period in time gets labeled a recession in retrospect anyway?

[Edited on July 31, 2008 at 2:26 PM. Reason : haha, I nailed it]

7/31/2008 2:26:30 PM

The economy is definitely teetering right now but I don't see how you can't label it as anything but resilient.

We've weathered a simultaneous housing, credit, and energy crisis.

Look at the following:

- Unemployment has remained fairly stable given the corporate losses/writeoffs

- The financial markets while volatile have simply corrected rather than collapsed despite some major shifts in the landscape

- GDP has remained positive despite terrible broad based sector performances and overall turmoil within certain industry leaders

- An inflation nightmare that has been worsened by lowered interest rates

- Inconceivable government spending increases



Look, I'm not convinced the economy can withstand this turmoil. Mostly because i have zero confidence in our government to let the markets correct themselves. I'm terrified that the "ordinary" american is going to rise to power and enact all kinds of shit measures that locks us into hell for the forseeable future.

I wish there was someone who could step up to the plate and say fuck it. We're all going to go through pain and we'll come out better for it. Raise the interest rates, crimp the economy, enforce some tough fucking love.

The new proposal is to destroy uninhabited homes to correct the housing market. Whoever is spearheading that movement clearly has the right idea.

While we're at it I have a few other good ideas.

#1 Make construction workers use shovels instead of machinery. We will create jobs by getting rid of more efficient machines and letting 10 guys dig a hole for six hours that 1 man could have accomplished in 15 minutes behind a caterpillar. More jobs = more money for everyone.

#2 Destroy 1,000 brand new Ford Explorer's every day. If there is less inventory available on the lots of the dealership then they can increase the prices on each vehicle and let the dealers make bigger commissions. Car salesman spend their commissions in the local economy so the more they make equals a better economy for everyone.

#3 Block the sun from 1 PM to 5 PM everyday. Less sun means we will increase spending on utilities. The utilities will make more money and since they are so heavily regulated we can tax them even more and with the increased tax revenues we can build more museums and convention centers. Convention centers attract tourists which make cities even richer! Or we can use the increased tax revenues to give more money to single females who can't work full-time because they have babies they have to take care of. The Earned Income tax credit encourages more black people to reproduce and black people fund the economy in multiple ways.

a) They get in trouble with the law a lot which brings in revenues for lawyers, police force, and the judidicial system. This gives us more incentive to create bigger government which we've already established leads to a better economy. Also it gives people more incentive to spend three years in law school learning things which creates jobs for professors, administrators, government overseers, and miscellaneous rent seekers. All of this equals more profits.

b) They buy a lot of weed in bulk and re-distribute it to white people for a profit. Not only do the drug dealers spend money (profits) they make but also the white people buy grocery products like cheetos, rolling papers, and 22 oz bud lights which leads to more profits.

8/1/2008 1:19:28 AM

^ LOL WUT?

8/1/2008 1:26:03 AM

^^ I'm all for the tough love approach.

Right now the philosophy seems to be do anything and everything to delay the effects of all this turmoil, without any regards to the long-term effects of those actions. The more the government gets itself interwined in the crisis, the more we set ourselves up for nasty unforeseen consequences.

8/1/2008 11:36:20 AM

Agreed.

It's about time we take our medicine, quit with the loose-money policies and let the inevitible recession and market reform kick in. The only disclaimer there is that we can't let our financial system fall apart completely, so some more bailouts may be necessary. Sucks, but some financial institutions are simply "too big to fail". Perhaps we stipulate that they break up as part of the bailout.

8/1/2008 6:31:32 PM

http://news.yahoo.com/s/ap/20080819/ap_on_bi_st_ma_re/wall_street;_ylt=AgxZ2BG8xddAOKB_iWAPETWyBhIF

this is the second story in as many days that was like such and such "doubled by more than twice the expected amount"...who the fuck looks at these numbers? why are they so optimistic? annoys me cause its like "um fucking duh, the economy isnt that great"...then numbers come out that say something doubled what it was expected and makes the stocks go down even farther

8/19/2008 12:12:36 PM

http://www.youtube.com/watch?v=kEviQOoE29Q

8/19/2008 2:39:44 PM

8/19/2008 2:44:01 PM

POLL-U.S. economy to skirt recession, but barely

Quote :

"NEW YORK, Aug 19 (Reuters) - U.S. economic growth will flirt with stagnation over the next two quarters but the likelihood of recession has receded over the past month to around 50:50, according to a Reuters poll of economists. An eventual recovery, helped by the sharp recent pullback in energy costs, should allow the Federal Reserve to boost interest rates by mid-next year to keep inflation under control, the poll found. The survey indicated analysts have become slightly more downbeat about growth for this year as a whole but also more sanguine toward a possible 2009 rebound. Economists polled Aug. 14-19 are looking for U.S. gross domestic product to grow 1.2 percent this year, accelerating to a still subdued 2.0 percent next year. The July poll foresaw 1.3 percent growth for 2008 and 1.8 percent for 2009."

Quote :

"In part because of the debilitating effects of this crisis, inflation is expected to moderate rather quickly over the coming year. The poll predicts it will bottom out at 2.1 percent in the third quarter. That would be a pretty impressive [] retreat given that the inflation rate jumped to 5 percent in the year to June. Still, core inflation, which excludes food and energy, is expected to hold above 2 percent through next year."

http://tinyurl.com/5ryex7

8/19/2008 2:50:09 PM

haha

Inflation is a red herring though. Deflation is here and growing. Capital is being destoyed at a massive rate. All the money these banks/investment firms are raising is going to paying back debt, taking money out of the marketplace.

There is no threat of rising wages, people are no longer willing to pay the same amount for non-necessities, asset values are collapsing. About the only place you can point to inflation is in raw commodities, and because it is a global slowdown now we are seeing that trend reverse.

Also - I have to point out from your quote:

Quote :

"In part because of the debilitating effects of this crisis, inflation is expected to moderate"

8/19/2008 10:18:46 PM

Yes, but if Alan Greenspan is to be believed, deflation is easily controlled under a fiat monetary system.

8/19/2008 11:28:46 PM

^

The warning on that graphic is cute.

Although, I do agree with Bernanke that a sufficiently motivated Central Bank can prevent deflation and a liquidity trap in the face almost any thinkable economic shock.

If buying bonds does not work, we can use the Fed to fund tax rebates. If people try to save their tax rebates then we can switch to subsidizing food and gasoline. If people still refuse to increase spending then we can rapidly increase college grants. If for some snowstorm in Hades reason we can't even coax college students into spend free money, then we can resort to directly acquiring equity and driving up investment.

8/21/2008 4:01:26 PM

^^ LOL!

8/21/2008 4:05:46 PM

you PEOPLE don't understand WHAT'S REALLY GOING ON in this country. There is a man running for president WHO IS OLDER THAN METHUSELA. LIBERALS are preaching in CHURCHES for pete's sake. APPLES are now worth more than PENNIES. One of MY TOENAILS is INGROWN and it's QUITE IRRITATING. Clearly OUR DEMOCRACY is in a STATE OF DISREPAIR or at least a MILD FUNK. I have detailed proof that one of the senators from the REPUBLIC OF PENNSYLVANIA is in fact A ROBOT of TAIWANESE MANUFACTURE. All of the letters of THE ALPAHBET were used in the creation of THIS SENTENCE save for "R". The exact weight of OUR MOTHER EARTH is in fact equal to the amount of feces the entire human race has excreted AT THIS VERY MOMENT. I just applied for a job as A WAITER at HERCULE POIROT'S MOONBASE. Is it painted a pleasing shade of BEIGE? BEIGE!!!!!

8/22/2008 5:05:00 PM

^ And some PEOPLE don't understand that Nelson Mandela's name is not "MANDINGO"!!!1

http://www.thewolfweb.com/message_topic.aspx?topic=531620

8/22/2008 5:10:10 PM

^LISTEN

I have a bad headache from watching tapes of old Junkyard Dog matches all day and I can assure you that Nelson Mandingo would never lie to us.

8/22/2008 8:03:17 PM

Where the hell is FailSaw? NFP is going to be a disaster tomorrow.

9/4/2008 3:20:59 PM

http://online.wsj.com/article/SB122061757763903639.html?mod=googlenews_wsj

Unemployment falls for 8th straight month, hits 5 year high. Is this the type of impressive the thread title had in mind?

9/5/2008 9:26:04 AM

come on, you jag-off.
It's impressive that any of us still have jobs!

9/5/2008 9:28:08 AM

Isn't unemployment falling a good thing? I'm pretty sure you mean rises.

9/5/2008 9:38:29 AM

Got me. It's early. I'm leaving it though, I don't give a hell about a gaffe.

9/5/2008 9:42:18 AM

I figured you didn't. I don't care either, just wanted to clarify.

9/5/2008 9:43:31 AM

Quote :

"Unemployment falls for 8th straight month, hits 5 year high."

thanks a lot Democratic Congress

9/5/2008 10:21:40 AM

At least try. Damn, that's terrible.

9/5/2008 10:25:20 AM

tell Congress to try because they almost suck as much as you

whats your girl Pelosi blogging about today?

9/5/2008 10:25:40 AM

I guess she was away at the DNC among other things, but she had a good one from the 26th

http://www.speaker.gov/blog/?p=1492

Quote :

"That improvement is only due to the government health care programs of Medicare and Medicaid, which Democrats created and have always championed and which Republicans continue to try to slash. Indeed, employer-provided health insurance and other private health insurance continued to erode in 2007."

9/5/2008 10:39:10 AM

^

Quote :

"Just last week, the Census Bureau released its annual study of household incomes, poverty and health insurance -- often called the nation's "economic report card." Its hard numbers seemed to confirm how many Americans feel. Sure, we're prosperous, but prosperity is fraying. Except for the rich, living standards are stagnant. Poverty is up; health insurance coverage is down. Naturally, both Barack Obama and John McCain seized upon the report to claim that their policies would restore progress. Hold it. Though echoed by policy wonks, pundits and politicians -- last week, Bill Clinton -- the conventional wisdom is wrong or, at least, misleading. Here's a more accurate assessment. For most Americans, living standards are increasing, albeit slowly, over any meaningful period. But rising health spending is eroding take-home pay, and immigrants are boosting both poverty and the lack of health insurance. Unless we control health spending and immigration, the economic report card will continue to disappoint. Unfortunately, neither Obama nor McCain seriously addresses these problems. Superficially, the conventional wisdom seems convincing. The Census Bureau found that median household income in 2007 was $50,233. Though up 1.3 percent from 2006, that was still less than the peak of $50,641 in 1999. (The median is the midpoint; all figures are in inflation-adjusted 2007 dollars.) Meanwhile, the share of people below the government's poverty line -- about $21,000 for a family of four -- was 12.5 percent, up from 11.3 percent in 2000. Finally, the ranks of the uninsured have increased in six of the past eight years. They're now about 15 percent of the population. Case closed? Not exactly. Here are three reasons why (space precludes mentioning others): First, comparisons are made to an artificially high benchmark -- the late 1990s "tech bubble." Remember the dot-com binge. Wages rose sharply; bonuses and cash incentives mushroomed. Unemployment and poverty dropped. In 2000, the jobless rate among white men 20 and over was 2.8 percent. But all these gains reflected a boom that, though pleasurable, was temporary and unsustainable. Stocks are now trading below their 2000 highs. Using these years as the base for comparison makes later years look bad. Picking 1997 -- the last pre-boom year -- is more realistic. From 1997 to 2007, median household income rose $2,600, roughly 5 percent. Though hardly spectacular, that's not stagnation. The poverty rate in 2007 was slightly lower than in 1997. Second, immigration distorts commonly cited statistics. Low-skilled immigrants, concentrated among Hispanics, outnumber the high-skilled. They drag down median incomes and raise poverty and the number of uninsured. One way to filter out the effect on income is to examine groups with few immigrants or their American-born children. Consider non-Hispanic white families. From 1997 to 2007, their median incomes rose about $6,000, to $69,937, a gain of about 9 percent. For black families, the increase was also about 9 percent, though only to $40,222. Again, not stagnation. Immigration's effects on poverty and health insurance coverage are greater. Since 1990, Hispanics numerically account for all the increase in the number of officially poor. Similarly, immigrants represented 55 percent of the increase of the uninsured from 1994 to 2006, says the Employee Benefit Research Institute. Many unskilled workers can't get well-paid jobs with insurance. Third, the census figures understate income gains by not counting fringe benefits. Census counts only money income -- wages, salaries, dividends, interest payments. But compensation growth is increasingly channeled into fringes. From 2000 to 2007, only 53 percent of the increase in average compensation came from wages and salaries, says economist Gary Burtless of the Brookings Institution. The rest went to health insurance (21 percent), pension contributions (19 percent) and payroll taxes (6 percent). Americans understandably feel they're on a treadmill. They don't see fringe benefits in their paychecks, and small year-to-year cash gains barely register. The real economic report card is both better and worse than imagined. The big advances of the rich (which occurred mostly in the 1980s and 1990s and reversed slightly last year) haven't prevented most Americans from achieving grudging gains. But a continuation of present trends would imperil future prosperity. If health-care spending remains uncontrolled, Americans will see more of their compensation diverted from take-home pay into insurance that mainly benefits (as insurance should) a small proportion of very sick people. Similarly, if the immigration of low-skilled workers continues unabated -- whether they're legal or illegal -- the ranks of the poor will swell, as will the uninsured or the costs of providing government insurance. Given the 2008 economy -- higher unemployment and inflation -- next year's census numbers will probably be worse than this year's. But it's the long-term threats that really matter. Obama and McCain don't confront them realistically because doing so would be unpopular and there's no strong public case for action. That's the biggest cost of misreading the economic report card."

http://www.realclearmarkets.com/articles/2008/09/the_real_economic_scorecard.html

9/5/2008 12:11:36 PM

uh oh

http://money.cnn.com/2008/09/06/news/economy/fannie_freddie_paulson.fortune/index.htm?postversion=2008090611

Quote :

"It took two months, but the bond market called Henry Paulson's bluff: The Treasury Secretary was widely expected this weekend to announce a plan to take Fannie Mae and Freddie Mac under government control. "

Quote :

"Foreign central banks, particularly China's, have in recent years been among the biggest buyers of "agency" bonds, those issued by Fannie, Freddie and other government entities. But they've been backing away. Brad Setser, an economist at the Council on Foreign Relations, noted last month that Federal Reserve data showed foreign central banks were, for the first time in four years, net sellers of agency bonds. The White House and the Treasury Dept. would not comment on the reports "

9/6/2008 2:37:58 PM

Odd, unemployment jumps in the first full month after a 15% jump in the minimum wage...

9/6/2008 11:40:55 PM

^ Maybe workers who were anticipating higher salaries started slacking off at work because of their raise and management was forced to fire them...

Or maybe management decided to get more work out of less people.

One or the other.

9/7/2008 5:15:48 AM

^Or neither.

Quote :

"Clearly, declining house prices, the credit crunch, sky-high energy costs and the overall weakening economy is a big reason behind the deteriorating labor market."

Quote :

"Plus, one economist points out that many people that are losing jobs this year are more skilled workers in the hardest hit sectors of the economy, not people vying for entry-level positions. "A lot of the job losses have been mainly in construction and manufacturing and the average wage levels in those industries are not anywhere near the minimum wage. Airlines is another industry with big job losses and higher paying jobs," said Keith Hembre, chief economist with First American Funds in Minneapolis."

http://money.cnn.com/2008/09/05/markets/thebuzz/index.htm?postversion=2008090511

9/7/2008 5:34:54 AM

Deterioration in one sector of the economy will tend to pull down other sectors. Small businesses that scale back operations due to a hike in the minimum wage no longer need to consume as many financial services or build new outlets, for example. A modern economy is very complex and interconnected, you cannot damage some of it and not expect the effects to spread in unpredictable ways.

Employers were not taken by surprise, they would have been scaling back operations and employment for months leading up to the 15% increase; interesting that unemployment and economic dislocation has been similarly increasing for months leading up to the increase.

But correlation is not causation. I'm sure every economics school in the land is rushing to publish their findings for this latest increase. I suspect they will compare unemployment increases between states that already had higher state imposed minimums and those that did not. But even then it will not be proof, as we have already established that economic dislocations spread in unpredictable ways. For example, a nationwide cutback in financial services would produce lower employment in New York City's financial sector, whose state minimum wage is far above the increase and whose workers earn no where near the minimum wage.

9/7/2008 9:22:16 AM

Odd, unemployment jumps in the first full month after a 15% jump in the minimum wage...

9/11/2008 9:31:36 PM

Unemployment was rising before that too you dipshit.

9/12/2008 9:19:47 AM

.,.,

[Edited on September 12, 2008 at 10:49 AM. Reason : .,.,]

9/12/2008 10:47:57 AM

Lehman with the swan dive!

Kersplat!

9/12/2008 6:34:14 PM

AIG is in trouble too.

9/13/2008 5:34:49 AM

Seems like Obama is really blowing smoke up everyone's asses and hoping nobody notices his lies

A NATION OF EXAGGERATORS
Quit Doling Out That Bad-Economy Line
By Donald Luskin
Sunday, September 14, 2008

Quote :

" "Patient zero in this epidemic is the Democratic candidate for president. As it would be for any challenger, it's in his interest to portray the incumbent party's economic performance in the grimmest possible terms. Barack Obama has frequently used the Depression exaggeration, including during a campaign speech in June, when he said that the 'percentage of homes in foreclosure and late mortgage payments is the highest since the Great Depression.' At best, this statement is a good guess. To be really true, it would have to be heavily qualified with words such as 'maybe' or 'probably.' According to economist David C. Wheelock of the Federal Reserve Bank of St. Louis, who has studied the history of mortgage markets for the Fed, 'there are no consistent data on foreclosure or delinquency going all the way back to the Depression.' The Mortgage Bankers Association (MBA) database, which allows rigorous apples-to-apples comparisons, only goes back to 1979. It shows that today's delinquency rate is only a little higher than the level seen in 1985. As to the foreclosure rate, it was setting records for the day -- the highest since the Great Depression, one supposes -- in 1999, at the peak of the Clinton-era prosperity that Obama celebrated in his acceptance speech at the Democratic Natational Convention late last month. I don't recall hearing any Democratic politicians complaining back then." "Here's another one not to be too alarmed about: Obama is flat-out wrong when he frets on his campaign Web site that 'the personal savings rate is now the lowest it's been since the Great Depression.' The latest rate, for the second quarter of 2008, is 2.6 percent -- higher than the 1.9 percent rate that prevailed in the last quarter of Bill Clinton's presidency.""

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/12/AR2008091202415.html

So things are actually better than when the Democrat's beloved Clinton was in office...

[Edited on September 16, 2008 at 9:09 AM. Reason : can't wait to see the excuses on this one]

9/16/2008 9:09:00 AM

Obama is showing his true leadership right now. By yelling "fire" in a crowded theater, he is doing nothing more but stirring up panic to benefit him politically. In truth, he looks like a moron comparing this to the great depression. It seems Obama has a better grasp of bowling than he does history.

9/16/2008 9:13:38 AM

Quote :

"The latest rate, for the second quarter of 2008, is 2.6 percent"

i would love to see the actual data behind that.
That is contrary to what nearly every economist and politician, not just Obama, have been saying for years

9/16/2008 9:15:07 AM

Uh, that article was written on Sunday. In other words, right before market shit itself over the collapse of two of it's largest financial institutions. The guy who wrote that article pretty much looks like an idiot now.

9/16/2008 9:17:35 AM

^It doesn't change much. This was all being discussed on the news last night, so they didn't think it was old news.

^^here you go: http://www.bea.gov/briefrm/saving.htm

[Edited on September 16, 2008 at 9:26 AM. Reason : k]

9/16/2008 9:21:32 AM

nice.
you find a one-quarter spike in the savings rate (in the same quarter that the stimulus checks were mailed out) after years of <1% savings, and you use that as as justification?
want to look at long-term, and then try the comparison to the great depression again?
http://www.bea.gov/national/nipaweb/Nipa-Frb.asp

even if all this was true without massaging the data, i'm not sure how you can look at those two values (savings rate, foreclosures) and claim "things are actually better...."

9/16/2008 9:35:24 AM