Breaking: Q4 GDP drops to -0.1%

posted at 8:31 am on January 30, 2013 by Ed Morrissey

Yikes:

Real gross domestic product — the output of goods and services produced by labor and property located in the United States — decreased at an annual rate of 0.1 percent in the fourth quarter of 2012 (that is, from the third quarter to the fourth quarter), according to the “advance” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.1 percent.

The Bureau emphasized that the fourth-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 4 and the “Comparisons of Revisions to GDP” on page 5). The “second” estimate for the fourth quarter, based on more complete data, will be released on February 28, 2013.

The decrease in real GDP in the fourth quarter primarily reflected negative contributions from private inventory investment, federal government spending, and exports that were partly offset by positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, decreased.

Most economists predicted that the economy slowed in Q4, but I don’t know that anyone expected a negative number.  Business Insider notes that the expectations were around 1.1% for Q4, which would have been a big drop in itself from Q3′s 3.1%.  However, they point to the contraction in federal spending as the main culprit:

Real federal government consumption expenditures and gross investment decreased 15.0 percent in the fourth quarter, in contrast to an increase of 9.5 percent in the third. National defense decreased 22.2 percent, in contrast to an increase of 12.9 percent. Nondefense increased 1.4 percent, compared with an increase of 3.0 percent. Real state and local government consumption expenditures and gross investment decreased 0.7 percent, in contrast to an increase of 0.3 percent.

Well, it’s true that government spending dropped in Q4, but it’s equally true that it spiked in Q3. That’s a decrease from the spike, which makes it a lot less dramatic when put in context. Exports took a beating, too, and that has nothing to do with government spending:

Real exports of goods and services decreased 5.7 percent in the fourth quarter, in contrast to an increase of 1.9 percent in the third. Real imports of goods and services decreased 3.2 percent, compared with a decrease of 0.6 percent.

However, there is a mild bright spot in inventories:

Real final sales of domestic product — GDP less change in private inventories — increased 1.1 percent in the fourth quarter, compared with an increase of 2.4 percent in the third.

In other words, much of this drop seems to be a lack of inventory expansion.  Real final sales to end purchasers rose, even if it didn’t go up by much.  That would indicate that inventory expansion in Q3 and prior periods was based on overly-optimistic views of the economy.

The New York Times breaks out the U-word in its headline, although at this point they don’t have a story to go along with it.  The Associated Press says, “Surprise!”:

The U.S. economy posted a stunning drop of 0.1 percent in the fourth quarter, defying expectations for slow growth and possibly providing incentive for more Federal Reserve stimulus.

The economy shrank from October through December for the first time since the recession ended, hurt by the biggest cut in defense spending in 40 years, fewer exports and sluggish growth in company stockpiles.

The Commerce Department said Wednesday that the economy contracted at an annual rate of 0.1 percent in the fourth quarter. That’s a sharp slowdown from the 3.1 percent growth rate in the July-September quarter.

The surprise contraction could raise fears about the economy’s ability to handle tax increases that took effect in January and looming spending cuts.

What’s perhaps more stunning is the idea that the so-called recovery in its fourth year still cannot stand on its own legs without massive government stimulus.  After all, federal spending has remained at the $3.8 trillion level for four years, with its percentage of GDP around 25%, far above the 20% post-1960s norm.  Perhaps that’s part of the reason that the economy is still stagnating, rather than a reason to expect recovery.

Update: Here’s a couple of good questions:

A recession is defined by two success quarters of contraction, and we should remember that this is the advance estimate of Q4.  These numbers go through two more iterations; the final number will come out in March.  I’d guess based on the real final sales numbers that we aren’t going to see two negative quarters in a row, but it’s possible — and the tax hikes won’t help.  To answer the other question, another recession will be squarely blamed on the White House, especially after all the bragging they did about winning the fiscal-cliff standoff.

Update II: The year-end GDP number was 2.2%, assuming no further adjustments in Q4 GDP.  That’s better than 2011′s 1.8% GDP growth … but not by much.


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

Comment pages: 1 2 3

Where’s our trolls?

TarheelBen on January 30, 2013 at 12:37 PM

The number would have been more negative had Obama and the Democrats not made a huge issue of gun control in the final week-and-a-half of 2012. One wonders how much gun sales drove UP the economy in the final phase of 2012, and the opening 2013.

Jurisprudence on January 30, 2013 at 12:40 PM

As long as O is president, we will never see the real numbers. This is just to make up for the fact numbers released during election season as a “correction” for all of that.

When government spending is 40% !!! of GDP, what are we really measuring anyways? GDP is a stupid measurement for productivity that Keynesians push. We borrow almost 50% of that 40% of our GDP number. Wrap your brain around that. None of this is real growth.

So all Obama has to do is push some Q4 spending in to next Q1, or pull Q2 spending in to Q1, and voila, no negative growth.

It’s all a bunch of bogus.

Oh, and government spending has not and will not decrease. Some of it is seasonal, or fluctuates (like spending on welfare programs), but if we graph government spending over a year or more, the trend line is very clear.

Timin203 on January 30, 2013 at 12:40 PM


When government spending is 40% !!! of GDP, what are we really measuring anyways?

I know, right? The permanent government and central banks have become instruments of central planning by other means. They make the rules, set the rates, and report on their own performance. It’s all fantasy. Welcome to the era of state capitalism, only the capitalism part isn’t doing so well.

casuist on January 30, 2013 at 12:44 PM

Where’s our trolls?

TarheelBen on January 30, 2013 at 12:37 PM

They were the hardest hit.

Steve Eggleston on January 30, 2013 at 12:44 PM

The number would have been more negative had Obama and the Democrats not made a huge issue of gun control in the final week-and-a-half of 2012. One wonders how much gun sales drove UP the economy in the final phase of 2012, and the opening 2013.

Jurisprudence on January 30, 2013 at 12:40 PM

That’s my point, it really doesn’t matter. The government is such a big part of that GDP number, that they can manipulate when and where negative hits will hit and when spending will boost the GDP number.

So they move forward some huge invoices or RFPs by a few months to make Q3 look strong for O’s re election, then they push back other things to make Q1 look strong (recovery on its way!) The federal government is probably the ONLY market mover out there that single handedly can effect GDP numbers based on when they choose to purchase / spend.

Let’s measure Investment + consumer spending in one category, and government spending in another. That will give us a much more realistic view of our national production. And we’ll find it’s WAY WAY WAY down in real dollars and that we’re in the midst of a great depression worse than in the ’30s, and that while our soup lines are now food stamps, every day we continue on this path of printing and spending and manipulating real economic numbers we’re making the correction exponentially more devestating for everyone in the REAL economy when it hits.

Timin203 on January 30, 2013 at 12:45 PM


Where’s our trolls?

Here is the troll-spin: http://www.weeklystandard.com/blogs/dems-tout-claim-best-looking-contraction-us-gdp-youll-ever-see_698863.html

Now where are the trolls to spin the spin?

casuist on January 30, 2013 at 12:48 PM

What’s perhaps more stunning is the idea that the so-called recovery in its fourth year still cannot stand on its own legs without massive government stimulus.

It’s much more than mere “government stimulus”. It’s more than 8% of GDP magically conjured from the air by borrowing and spending it that artificially enhances the GDP numbers by that exact amount (though we’ll have to pay for it with GDP reduced by even more in the future as we have to pay this off). On top of that, it’s printed money by the Fed and artificially nonexistent interest rates that make that conjured, borrowed money appear to be free (which it isn’t) which will also cost tons of GDP in the future when it has to be unwound.

The fact is that for the past four years we have been dishonestly borrowing and spilling into the economy over 8% of GDP (and having the Fed print at least the equivalent) in order to turn around and claim “growth” of less than 2% of GDP. This is beyond a joke and the pathetic numbers that we’ve had for these 4 years (and they have been nothing but totally pathetic) have shown that this money borrowed and printed to goose the figures is a total waste that will hurt so much more when we have to pay it off and unwind the positions that only the dimmest of humans would even think to do something like this, let alone continue it on for an eternity and re-elect the idiots who support it.

The GOP should have let the dems shut the feral government down in 2011 in order to force a repeal of BarkyCare during one of the many CR/debt limit “negotiations”. Those were our last chances to right this ship (and there were so many of those chances) but the cowards in the GOP couldn’t do squat to even try and stop the America-hating, nihilistic dems and their Indonesian Imbecile. So, America re-elected the America-hating Sukarno knock-off and the GOP cowards in the House re-elected the Crybaby POS Boner.

On the bright side, the economy only gets worse from here. Just think that a house that is heavily leveraged should be worth almost twice as much at the insanely low, artificial rates of less than 4% than it would be at the normal rates of around 8% (and the rates will go much, much higher when these positions have to be unwound) but the reaction of housing to the contrived free-fall in interest rates has been to continue losing value, which shows you just how TRULY WEAK real estate has been.

This nation has no clue how much hurt is in store for us in the future, mostly thanks to the idiotic borrowing/printing/wasting policies of the Years of Living Dangerously with our new ineligible, retarded Sukarno reincarnation.

ThePrimordialOrderedPair on January 30, 2013 at 12:50 PM

U.S. Economy Unexpectedly Contracts in Fourth Quarter

” Unexpectedly” oh please.

Living is easy with eyes closed, misunderstanding all you see.
It’s getting hard to be someone but it all works out,
What difference at this point does it make?

J_Crater on January 30, 2013 at 12:53 PM

easyt65 on January 30, 2013 at 12:34 PM

.
I agree with everything you said (I truly do) and am the last person who should ever pick on someone’s simple typo but …

” … if we are honest with ourselves for a minuet …”

If you want to get people’s attention, might I suggest Kate Upton doing the ‘Cat Daddy’?

:)

PolAgnostic on January 30, 2013 at 12:53 PM

It is only going to get worse. I no longer buy anything retail in terms of clothing, shoes or purses… I now shop in consignment shops. I no longer frequent the mall AT ALL because the simple pleasures of having a starbucks and maybe buying something are over. As for food, it’s farmers markets and smaller stores, not Wal Mart or Target. Just remember: There are millions of “me”.

Key West Reader on January 30, 2013 at 12:53 PM

Now that Obama has raised taxes on the rich, surely GDP will go through the roof this quarter, right? They keep telling us that tax increases are good for the economy.

supernova on January 30, 2013 at 12:57 PM

Where’s our trolls?
 
TarheelBen on January 30, 2013 at 12:37 PM

 
Googling “expense deduction”.

rogerb on January 30, 2013 at 12:59 PM

Unicorns! I want one.

LetsBfrank on January 30, 2013 at 1:05 PM

the markets are off not too much, they know that the Fed will starting buying equities directly any day now, anything to prop up the econom

Although the CFNAI has gotten better in Nov and Dec…so this may be short lived. What this does is put a spin to kill the sequester, barry will be campaigning for that big time

but, sadly, in a post-modern economy, the gdp that you buy with a T dollars of debt is pretty pathetic. I think Santelli is right…we’re europe now…good job leftists

r keller on January 30, 2013 at 1:05 PM

So, for those of us who are amateurs at economics, just how bad is this?

Othniel on January 30, 2013 at 1:06 PM

So yeah, this stash of MRE’s might come in handy yet. I’m taking applications for the few remaining cots in the bunker, apply today!

Bishop on January 30, 2013 at 8:43 AM

..I got a couple of M-1s and a lot of ammo. Can you put me down for one?

The War Planner on January 30, 2013 at 1:07 PM

So, for those of us who are amateurs at economics, just how bad is this?

Othniel on January 30, 2013 at 1:06 PM

.
Let’s try putting this is a different perspective:

We are borrowing money from loan sharks to prop up the economy and getting a -0.1 GDP rate …

… but we’ve promised the loan sharks they can break the knees of our children and our grandchildren etc. WHEN WE don’t pay up.

Does that help?

PolAgnostic on January 30, 2013 at 1:13 PM

So, for those of us who are amateurs at economics, just how bad is this?

Othniel on January 30, 2013 at 1:06 PM

The actual number doesnt really matter, the underlying weakness of the economy is really, REALLY bad though.

Again, government is SO large in our economy that they can move GDP numbers perfectly legally by when they choose to buy. for state and local governments, most buying is in the summer (fiscal year turn overs are usually june / july or july / august). Federal government buys and pays for things in peaks and valleys.

We had to pump trillions into the economy and spend way beyond our means to keep our numbers where they are now. That’s how bad it is.

Timin203 on January 30, 2013 at 1:14 PM

http://www.theatlanticwire.com/global/2013/01/zimbabwe-down-its-last-217/61562/

There are cash-strapped governments and there are broke governments (LIKE OURS!!!!). And then there’s Zimbabwe, which, after paying last week’s government salaries, has just $217 left in the bank. No, we didn’t forget any zeroes to the end of that figure.

Zimbabwe, the country that’s home to some of the world’s largest platinum and diamond reserves, literally has the same financial standing as a 14-year-old girl after a really good birthday party. The country’s finance minister admitted as much in a press conference on Tuesday. “Last week when we paid civil servants there was $217 [left] in government coffers,” Tendai Biti told reporters. “The government finances are in paralysis state at the present moment. We are failing to meet our targets.”

So it seems. However, Zimbabwe is hardly a stranger to financial hyperbole. The economy started to come apart at the seams in 2000, when President Robert Mugabe seized the land of over 4,000 white-owned farmers, effectively dismantling the country’s agriculture industry (kind of like eminent domain Africa style).

Over the course of the next decade, the country spiraled into an extended period of hyperinflation, the likes of which the world almost never sees. It peaked in August 2008, when inflation reached 11,200,000 percent and economists around the world started to say that the country’s situation was hopeless. Prices were doubling by the day, and the government had to print Z$100 billion notes. The following year, they went ahead and printed Z$100 trillion notes, just before deciding to chop 12 zeroes off of the currency. A new coalition government formed that year and started on the long process of financial recovery, a process that is clearly going to take a little longer.

Trillion dollar coin anyone?

PappyD61 on January 30, 2013 at 1:14 PM

According to ABC News we love our DOTUS.

HEY AMERICA, THIS GUY’S GETTING POPULAR
(screams the headline at Yahoo News)

Barack Obama has advanced to his highest personal popularity since his first year in office, and Americans who’ve formed an opinion of his second inaugural address last week broadly approve of it, the latest ABC News/Washington Post poll finds.

At the same time, Obama’s favorability rating is lower than that of two of the last three re-elected presidents as they started their second terms, Bill Clinton and Ronald Reagan. He’s in better shape compared with the third, George W. Bush.

See PDF with full results, charts and tables here.

Sixty percent of Americans now express a favorable opinion of Obama overall, up 10 points since last summer, in the heat of the presidential race. His popularity peaked at a remarkable 79 percent days before he took office four years ago, and last saw the 60s in November 2009.

PappyD61 on January 30, 2013 at 1:42 PM

Any federal spending that is borrowed should not be counted as part of GDP.

besser tot als rot on January 30, 2013 at 1:48 PM

Where’s our trolls?

TarheelBen on January 30, 2013 at 12:37 PM

Waiting for Dr. Krugman to tell them what to “think” about all this.

So, for those of us who are amateurs at economics, just how bad is this?

Othniel on January 30, 2013 at 1:06 PM

Our lead Hot Gas Economics Amateur is bayam, who is still waiting for said TP from Krugman. Oh, and also waiting for Krugs’ talking points.

And as getalife opined in these pages almost exactly 4 years ago:

“The adults are in charge.”

Del Dolemonte on January 30, 2013 at 1:49 PM

Sixty percent of Americans now express a favorable opinion of Obama overall, up 10 points since last summer, in the heat of the presidential race. His popularity peaked at a remarkable 79 percent days before he took office four years ago, and last saw the 60s in November 2009.

PappyD61 on January 30, 2013 at 1:42 PM

Polls only indicate the efficacy of the Democrat Party’s PR wing (aka the press). These polls suggest that the press is getting good at their job.

besser tot als rot on January 30, 2013 at 1:49 PM

but I don’t know that anyone expected a negative number

I did and I posted that here on HA. Gee whiz, Ed!

dogsoldier on January 30, 2013 at 1:51 PM

See PDF with full results, charts and tables here.

PappyD61 on January 30, 2013 at 1:42 PM

How “generously” did they oversample Democrats?

Del Dolemonte on January 30, 2013 at 1:51 PM

ROTFL…this thread sure is good trollbane.

*clink*WAAAAAARIORS, COME OUT AND PLAAAAAY!*clink*

Christien on January 30, 2013 at 1:58 PM

Now if only everyone would just stop looking for work, we could get unemployment down to 0%.

The Rogue Tomato on January 30, 2013 at 1:58 PM

Where’s our trolls?

TarheelBen on January 30, 2013 at 12:37 PM

Why should they bother? They have everything they want, this news item included.

ElectricPhase on January 30, 2013 at 2:08 PM

So can we finally put to rest these insane austerity measures? Seriously, we have plenty of empirical evidence at this point both here and in Britain that they have been an abject failure and have done nothing but hurt economic growth.

Typhonsentra on January 30, 2013 at 2:15 PM

But maybe he’s not too good at it.

verbaluce on January 28, 2013 at 1:50 PM

LOL!

The New Republic Pushes Fake Picture of Obama Skeet Shooting…Then Blames Twitter. (UPDATED: Original Golf Photo Included)

Resist We Much on January 30, 2013 at 2:20 PM

So can we finally put to rest these insane austerity measures?

Typhonsentra on January 30, 2013 at 2:15 PM

Austerity measures? LOL.

Lay off the crack pipe, dude.

ThePrimordialOrderedPair on January 30, 2013 at 2:20 PM

Focused like a laser!

can_con on January 30, 2013 at 2:21 PM

So can we finally put to rest these insane austerity measures? Seriously, we have plenty of empirical evidence at this point both here and in Britain that they have been an abject failure and have done nothing but hurt economic growth.

Typhonsentra on January 30, 2013 at 2:15 PM

Define “austerity” in the UK.

In The UK, “Austerity” Means Spending More Than The Socialists In Labour Did…And, Those Bastards Bankrupted The Country

M2RB: Pearl Jam

Resist We Much on January 30, 2013 at 2:23 PM

So can we finally put to rest these insane austerity measures?

Typhonsentra on January 30, 2013 at 2:15 PM

Wow.

Chuck Schick on January 30, 2013 at 2:25 PM

If Europe is prologue…

Despite the “Austerity = Tea Party/Austrian Economics! E113veNty!!!111!!!” hysteria by idiots and propagandists like Paul Krugman, Ezra Klein, et al, European Austerity has NOTHING in common with that espoused by limited government/low taxation/spending cuts Americans. European leaders – of all stripes – knew that it was/is far easier to raise taxes than reform overall unsustainable entitlement programmes and cut spending.

Labour bankrupted the UK during its 13 year reign. Did the coalition led by “Conservative” [True, "conservative" in Europe does not mean the same thing as "conservative" in the US save for a few like Daniel Hannan, Nigel Farage (UKIP, but more conservative than Cameron), etc)] cut taxes and spending? No, it has actually increased spending to a level higher than Blair-Brown, raised taxes, and postponed meaningful spending cuts…indefinitely. Government spending as a percentage of GDP in 2007 was 40.3%. It was 45.3% in 2012.

[In some fairness, Osborne has reduced the top marginal rate from 50pc to 45pc after the "sock it to the rich" tax resulted in a loss of revenues to the Treasury of £509 million in January 2012 compared to the same month in 2011.]

Did “Conservative” Sarko cut spending and taxes after the recession? No. In fact, in 2012, he proposed even more tax increases and pledged to “sock it to the rich” even more than Hollande would, if reelected. And, Hollande has just pumped Sarko’s economic policies/proposals with steroids.

France’s government spending as a percentage of GDP: 52.6% in 2007; 55.8% in 2012.

Berlusconi increased taxes and Italy has increased spending. 47.6% as a percentage of GDP in 2007 and 50.1% in 2012.

Even though Merkel did cut some spending in areas, she, too, increased taxes and government spending has continued to grow in others. Government spending as a percentage of GDP was 45.1% in 2012 and 43.5% in 2007.

Even Spain’s spending increased. 2007: 39.2%. 2012: 42.0%.

Over the last decade, EU member states have collectively increased government spending by 62%. In 2012, average government spending by EU nations stood at approximately 49.2% of GDP — v. 44.8% in 2000.

On its own website, the EU itself ridicules the notion of government austerity as a “myth.”

“National budgets are NOT decreasing their spending, they are increasing it,” the EU says, noting that “in 2011, 23 of the 27 nations in the EU increased spending. This year (2012), 24 of 27 will do so.”

This Is The Dawning Of The Age Of “Austerity”?

Europe, How Can You Have Any Pudding If You Don’t Eat Yer Meat?

Resist We Much on January 30, 2013 at 2:28 PM

So can we finally put to rest these insane austerity measures?

Typhonsentra on January 30, 2013 at 2:15 PM

You keep using that word, but I do not think it means what you think it means.

In Europe, “austerity” means tax rises, ESPECIALLY ON THE “EVIL RICH,” and deep spending cuts, which have been postponed indefinitely.

In other words, “austerity” in Europe is EXACTLY what you have been calling for since Obama started running for office in February, 2007.

Resist We Much on January 30, 2013 at 2:32 PM

Where’s our trolls?

TarheelBen on January 30, 2013 at 12:37 PM

I always ask this question. The troll pick and choose their battles, a sure sign of weakness….

If they finally start talking, they’ll probably say something like…

This is the Republicans Fault!!

itsspideyman on January 30, 2013 at 2:47 PM

I’m sure the WH will blame the gop and/or Bush if the sycophant media even asks.

Ellis on January 30, 2013 at 2:47 PM

I’m sure the WH will blame the gop and/or Bush if the sycophant media even asks.

Ellis on January 30, 2013 at 2:47 PM

Carney already did.

Chuck Schick on January 30, 2013 at 2:53 PM

In other words, Obama and the Democrats poured money into the economy during the lead up to the election and then let it crash once they got the win they wanted.

Terrye on January 30, 2013 at 2:59 PM

Resist We Much on January 30, 2013 at 2:28 PM

Thanks for the explanation REM. I’ve heard this fight for too long from Krugman, and his attempts to kill spending cuts by blanket-killing it with Europe’s idea of “austerity”.

Yet he never talks about Sweden when he talks about Europe’s failure. Along with a reduction in the growth of government spending (Krugman’s idea of “austerity”), Sweden cut taxes on their citizens in the highest tax brackets. From 2009-2012, while the rest of Europe foundered, they enjoyed growth from 3% to 4%. While the outlook doesn’t look as promising this year due to Europe’s overall outlook, they’re still one of the few countries in Europe to expect positive growth.

Sounds like the Reagan model (except our Congress never cut spending in their lives).

itsspideyman on January 30, 2013 at 3:07 PM

So can we finally put to rest these insane austerity measures?

Typhonsentra on January 30, 2013 at 2:15 PM

Thank you! Why should the rich people have all the stash. The government needs to make some brand new stash and give it out. I heard we could mint a tin coin and call it a trillion. Lets make 10 of those coins and then give everyone new ObamaPhones. 6g please! And my mortgage. Oh, and my condoms, abortions and sex change operation.

BoxHead1 on January 30, 2013 at 3:08 PM

Has Comrade Obama blamed the GOP, FOXnews, and Rush yet? Obviously if it weren’t for them his glorious Five Year Plan would be right on track, perhaps even exceeding expectations.

farsighted on January 30, 2013 at 11:15 AM

farsighted on January 30, 2013 at 11:15 AM

That didn’t take long.

White House: GOP responsible for contracting economy

In the new Amerika the party of evil capitalists and the greedy selfish “rich” are always to blame for all economic problems, and not The Party, the one with the most government power.

The Soviets blamed the same people for their economic failures and for all economic problems.

Comrade Obama and his Party have become very predictable. Just consider what Marx and Lenin would say and try to do.

farsighted on January 30, 2013 at 3:19 PM

Most of the decline was in government spending (defense was down 22%?) and inventory reduction; private sector growth was actually better than expected, and the other numbers this month have looked pretty good (weekly first time jobless claims are now down around 330K, Dec durable goods were much better than expected), so no use getting too worried. But this is an indication of the types of headwind the economy will face as public sector spending gets reduced. Meanwhile, the Bull keeps charging … Going on 4 years now since we bottomed at 6600 in March 2009, and the Dow is approaching 14K and a record high. More turbulence ahead as the politicians engage in debt negotiation shenanigans, and we are long overdue for a correction, but we’ve got a pretty good feeling the Dow will be in record territory before Memorial Day … it’s been a hell of ride so far …

TouchdownBuddha on January 30, 2013 at 3:33 PM

and the Dow is approaching 14K and a record high.

TouchdownBuddha on January 30, 2013 at 3:33 PM

The Dow gets there every five years. This is our third time at that point. Perhaps the Fed over-printing and debasement of the dollar will let the Dow finally break through this time? After all, the Zimbabwean stock index went to quintillions.

Perhaps, if you looked at the Dow in terms of gold you’d get a better picture of where we are and where we’re headed in the near future.

ThePrimordialOrderedPair on January 30, 2013 at 3:39 PM

To answer the other question, another recession will be squarely blamed on the White House, especially after all the bragging they did about winning the fiscal-cliff standoff.

Like Marco said in Taken,”Good Luck.”

From Fox News:
Economy Shrinks: Dems Blame GOP
AP
After a federal report shows that the economy unexpectedly shrank for the first time since 2009, White House Spokesman Jay Carney, right, and top House Dem Nancy Pelosi point finger at Republicans.

Tenwheeler on January 30, 2013 at 4:13 PM

Most of the decline was in government spending (defense was down 22%?) and inventory reduction; private sector growth was actually better than expected, and the other numbers this month have looked pretty good (weekly first time jobless claims are now down around 330K, Dec durable goods were much better than expected), so no use getting too worried. But this is an indication of the types of headwind the economy will face as public sector spending gets reduced. Meanwhile, the Bull keeps charging … Going on 4 years now since we bottomed at 6600 in March 2009, and the Dow is approaching 14K and a record high. More turbulence ahead as the politicians engage in debt negotiation shenanigans, and we are long overdue for a correction, but we’ve got a pretty good feeling the Dow will be in record territory before Memorial Day … it’s been a hell of ride so far …

TouchdownBuddha on January 30, 2013 at 3:33 PM

Why can’t you conservatives grasp the very simple concepts laid out in TouchdownBuddha’s point. The GOP is literally saying “screw the economy” by refusing to budge on sequester. The data is clear from Western Europe. Austerity retracts economies it does not grow them. The public sector is simply too deeply enmeshed. Why do you want people to lose their jobs?

libfreeordie on January 30, 2013 at 4:19 PM

Matt Yglesias ✔ @mattyglesias

Impressed by conservatives ability to pretend to believe that Obama is 100% responsible for events 1.5 years into divided government.

Matt Yglesias ✔ @mattyglesias

You can’t fake that kind of bullshit, it takes real conviction.

From the losers STILL blaming Bush!

Don’t you, cons, EVAH blame Obama for “inheriting” himself!

/

Resist We Much on January 30, 2013 at 4:23 PM

Austerity retracts economies it does not grow them.

“retracts”? Learn some English, moron.

The public sector is simply too deeply enmeshed. Why do you want people to lose their jobs?

libfreeordie on January 30, 2013 at 4:19 PM

LOL. You insert the government into everything and then cry that no one can reduce government because it’s inserted into everything. You are true scum, in addition to being an idiot.

Government spending is the most inefficient sort of spending there is. Nothing else even comes close. Any money spent by government is contributing to waste and slowing down the economy. Yes, the government can borrow and print money to spill into the economy to temporarily make it look like there’s activity, but that is just an illusion – and it’s an illusion that always costs more on the way out than it appeared to benefit on the way in.

Tell me, when do you think the Fed is going to unwind its positions and reduce its balance sheet? How do you think that is going to affect the economy? Eh, why am I asking you this? You’re too dumb to understand anything that involves numbers greater than 10.

As to people losing their jobs, when those jobs are part of the illusion created by government spending run amok (and financed with borrowing that will have to be paid back and printing that will have to be erased) then it is to the benefit of the economy and everyone that those jobs should disappear. Idiots like you think that burying jars of money and having people dig them up and spend them is “stimulus”. LOL.

“What do they think spending is?? Spending IS stimulus!!” – a quote from someone even dumber than you – from a guy who can’t even do simple arithemtic with fractions or understand the basics of percentages (“reduce premiums by 3000%!!” … “profit AND earnings ratios!”).

There used to be a time when people as dumb as you and Barky were too embarrassed to open their mouths in public. Nowadays, your ilk of retard like to publicly revel in your idiocy. You’re proud of how dumb you are.

Go crawl back under your rock.

ThePrimordialOrderedPair on January 30, 2013 at 4:28 PM

Clearly we need to take more money out of the economy to put back into it and reduce the value of the dollar.
-any moronic libtard

tom daschle concerned on January 30, 2013 at 4:28 PM

Why can’t you conservatives grasp the very simple concepts laid out in TouchdownBuddha’s point. The GOP is literally saying “screw the economy” by refusing to budge on sequester. The data is clear from Western Europe. Austerity retracts economies it does not grow them. The public sector is simply too deeply enmeshed. Why do you want people to lose their jobs?

libfreeordie on January 30, 2013 at 4:19 PM

Aww, the good professor doesn’t know the meaning of words in his own language :)… when talking about shrinking economies the correct term is ‘contraction’ not ‘retraction’ :)…learn your English, professor, shame to be corrected like this, on a public forum, by a non-native speaker :)… And why are you complaining about the European model, all they did there was raise the taxes on the rich, not a single euro cut in public spending….that’s exactly what Obama is doing over here and it should be right up your alley and in line line with your ideology…why complaining then?

jimver on January 30, 2013 at 4:42 PM

Just when you think all the shoes have dropped, we find even more out about how Bush snake-bit the economy.

Axeman on January 30, 2013 at 4:49 PM

Why can’t you conservatives grasp the very simple concepts laid out in TouchdownBuddha’s point. The GOP is literally saying “screw the economy” by refusing to budge on sequester. The data is clear from Western Europe. Austerity retracts economies it does not grow them. The public sector is simply too deeply enmeshed. Why do you want people to lose their jobs?

libfreeordie on January 30, 2013 at 4:19 PM

You keep using that word, but I do not think it means what you think it means.

Um, on its own website, the EU itself ridicules the notion of government austerity as a “myth.”

“National budgets are NOT decreasing their spending, they are increasing it,” the EU says, noting that “in 2011, 23 of the 27 nations in the EU increased spending. This year (2012), 24 of 27 will do so.”

In Europe, “austerity” means tax rises, ESPECIALLY ON THE “EVIL RICH,” and deep spending cuts, which have been postponed indefinitely.

In other words, “austerity” in Europe is EXACTLY what you have been calling for since Obama started running for office in February, 2007.

You and Touchdown Buddha are ignorant and know NOTHING about what is going on in Europe.

Resist We Much on January 30, 2013 at 5:02 PM

When government spending is 40% !!! of GDP, what are we really measuring anyways?

That’s a big part of it. But face it, companies are figuring out they no longer need whiny American workers who get paid to live lifestyles that most of us have come to accept as normal. With PCs/online they can get better motivated, better educated people elsewhere to do the same job for way less.

They can also make tons of money off of derivatives, investments and playing footsy with Beijing.

The point is to make money…not to employ us, nor to see the fruition of Madison Avenue’s version of the American Dream, nor to be concerned about the health of our nation as a whole.

Free enterprise Capitalism is great when we’re included and can have a piece of the pie, but I see that happening less and less. Certainly the crooks in our various governments are exacerbating the problem.

Dr. ZhivBlago on January 30, 2013 at 5:03 PM

Headline correction (yes, I must be pedantic). It is impossible to be:

Breaking: Q4 GDP drops to -0.1%

It is either:

Breaking: Q4 GDP drops by 0.1%

or:

Breaking: Q4 GDP sees a -0.1% increase.

You can’t drop to a negative number for GDP. It is pretty much impossible to produce a negative.

Well, we are talking about Obama’s Washington D.C., so … never mind.

nukemhill on January 30, 2013 at 5:19 PM

You keep using that word, but I do not think it means what you think it means.

Resist We Much on January 30, 2013 at 5:02 PM

The ‘It’s Always Sunny in Philadelphia’ references are awesome.

sentinelrules on January 30, 2013 at 5:47 PM

but we’ve got a pretty good feeling the Dow will be in record territory before Memorial Day … it’s been a hell of ride so far …

TouchdownBuddha on January 30, 2013 at 3:33 PM


Especially if you are looking for the markets to completely disappear …

http://i1297.photobucket.com/albums/ag24/PolAgnostic/DJISTotalWeeklyTradingVolume10WkMovingAvg_zps1550e518.png

The chart I’ve linked shows the precipitous drop in weekly trading volume (i.e. the number of shares traded each week) for the Dow Jones Industrial Average on a 10 Week Moving Average basis.

Please note the period from March 6, 2009 on is when the Federal Reserve has been using Quantative Easing to “pump up” the stock markets.

The federal Reserve’s ‘subsidy’ of the markets is now $ 1.2 trillion/year.

Market volume is collapsing in spite of the QE “fix”. Take the “fix” away and you have the true picture.

On the current trendline, trading volumes go to ZERO by September of 2015, so everything should be perfect by then, right?

PolAgnostic on January 30, 2013 at 5:52 PM

….that’s exactly what Obama is doing over here and it should be right up your alley and in line line with your ideology…why complaining then?

jimver on January 30, 2013 at 4:42 PM


Because he knows a thousand times less about markets and economies than he does with respect to the English language???

PolAgnostic on January 30, 2013 at 5:55 PM

Market volume is collapsing in spite of the QE “fix”. Take the “fix” away and you have the true picture.

On the current trendline, trading volumes go to ZERO by September of 2015, so everything should be perfect by then, right?

PolAgnostic on January 30, 2013 at 5:52 PM

So, basically, if I have this right, by September 2015 the fed (or their agents) will have bought up all the shares available to be traded?

trigon on January 30, 2013 at 6:17 PM

Of course, if that’s the case, the market will go totally screwy before it reaches that point.

trigon on January 30, 2013 at 6:19 PM

Why can’t you conservatives grasp the very simple concepts laid out in TouchdownBuddha’s point. The GOP is literally saying “screw the economy” by refusing to budge on sequester. The data is clear from Western Europe. Austerity retracts economies it does not grow them. The public sector is simply too deeply enmeshed. Why do you want people to lose their jobs?

libfreeordie on January 30, 2013 at 4:19 PM

You don’t have the money.

Chuck Schick on January 30, 2013 at 6:21 PM

“Right now, our economy is growing…”

- President Barack Obama, 14 January 2013

“You see that economic growth? I BUILT THAT!

- President Barack Obama

“The Commerce Department said Wednesday that the economy contracted at an annual rate of 0.1 percent in the fourth quarter. That’s a sharp slowdown from the 3.1 percent growth rate in the July-September quarter. The surprise contraction could raise fears about the economy’s ability to handle tax increases that took effect in January and looming spending cuts.”

- Associated Press, 30 January 2013

“You see that economic contraction? REPUBLICANS BUILT THAT!”

- President Barack Obama

Resist We Much on January 30, 2013 at 6:24 PM

So, basically, if I have this right, by September 2015 the fed (or their agents) will have bought up all the shares available to be traded?

trigon on January 30, 2013 at 6:17 PM

.
No, it’s FAR worse.

Every week, week after week, fewer and fewer shares are being traded.

This makes “goosing” the Dow up very easy but it also means the markets are less and less credible as investments because eventually there will be NO ONE willing to BUY the shares that are held.

How much are those shares worth at that point?

ZERO, zip , nada

PolAgnostic on January 30, 2013 at 6:37 PM

Why can’t you conservatives grasp the very simple concepts laid out in TouchdownBuddha’s point. The GOP is literally saying “screw the economy” by refusing to budge on sequester. The data is clear from Western Europe. Austerity retracts economies it does not grow them. The public sector is simply too deeply enmeshed. Why do you want people to lose their jobs?

libfreeordie on January 30, 2013 at 4:19 PM

Lemme explain this in terms you will understand.

When you EBT card is maxed out you can’t buy booze, cigarettes and lottery tickets, ok? The government’s EBT card is maxxed out.

So next month they need to cut back on the booze and smokes. Gee after all, they only have the money they steal from those of us that work. Not that you would know anything about that.

dogsoldier on January 30, 2013 at 6:39 PM

PolAgnostic on January 30, 2013 at 6:37 PM

Yeah. That’s pretty much what I meant by the markets going totally screwy before that point. It would be an external event that would bring it to a head and the exact point when it would happen would be unknowable.

I have family and close ffriends that have their investments and retirements tied up in IRAs and such. You can’t talk to them about this. They’re mostly lefties and they just freak out.

It’s sad, but I have to take a lot of crap from them because I don’t invest in the markets.

trigon on January 30, 2013 at 6:45 PM

Googling “expense deduction”.

rogerb on January 30, 2013 at 12:59 PM

Thought this summed it up nicely. ; )

Bmore on January 30, 2013 at 8:18 PM

Why can’t you conservatives grasp the very simple concepts laid out in TouchdownBuddha’s point. The GOP is literally saying “screw the economy” by refusing to budge on sequester. The data is clear from Western Europe. Austerity retracts economies it does not grow them. The public sector is simply too deeply enmeshed. Why do you want people to lose their jobs?

libfreeordie on January 30, 2013 at 4:19 PM

Get over your fantasy that government spending increases productivity. It doesn’t. Some spending, such as for the military and police, is necessary to prevent criminals from decreasing productivity, but all labor and resources pulled from the economy by the government can only produce less under the government’s command than they would have in private hands. The more government spends, the worse the economy gets. When governments are finally forced to pull back, there can be some nominal loss of recorded productivity as the wasted resources are finally accounted for, but the economy itself improved.
The only way that government deficit spending can make even a marginal (and temporary) contribution to the economy is if it is able to pull in investment from outside of its boarders that otherwise would not have been brought in — and that is at the expense of future expansion.

Count to 10 on January 30, 2013 at 8:44 PM

I wondering if the GDP number adjusts for inflation and population growth. If it doesn’t then the real number is around -4.

VorDaj on January 30, 2013 at 9:05 PM

TouchdownBuddha

libfreeordie

You reprobate coward imbeciles couldn’t formulate a retort after all this time?

Worthless sequestering of carbon the both of you.

tom daschle concerned on January 30, 2013 at 10:52 PM

Anyone want to bet that the stock market GOES UP tomorrow. The whole thing is a progressive farce.

Ceteris Paribus on January 30, 2013 at 11:40 PM

So glad to see the recovery is continuing…thank you Dear Leader, thank you!!!

Dr. ZhivBlago on January 30, 2013 at 11:45 PM

Since we have no trolls, let me oblige:

We never said it would be easy
Would have been much worse under republican policies
We just have to do the right thing
We want a bi-partisan solution
The tea-party is causing economic uncertainty
Rush is blocking action by his own party
When Affordable healthcare kicks in, we’ll see a boost
Immigrants will finally start paying taxes and contributing

virgo on January 31, 2013 at 12:34 AM

The GOP is literally saying “screw the economy” by refusing to budge on sequester. The data is clear from Western Europe. Austerity retracts economies it does not grow them. The public sector is simply too deeply enmeshed. Why do you want people to lose their jobs?

libfreeordie on January 30, 2013 at 4:19 PM

You ma’am, are an idiot.

Monkeytoe on January 31, 2013 at 7:55 AM

I wondering if the GDP number adjusts for inflation and population growth. If it doesn’t then the real number is around -4.

VorDaj on January 30, 2013 at 9:05 PM

It’s real, not nominal, so all adjustments are already made.

nukemhill on January 31, 2013 at 10:14 AM

You keep using that word, but I do not think it means what you think it means.

Resist We Much on January 30, 2013 at 5:02 PM

The ‘It’s Always Sunny in Philadelphia’ references are awesome.

sentinelrules on January 30, 2013 at 5:47 PM

Unless you’re being sarcastic/ironic (I can’t tell), this quote goes waaaaaay back before Philly. It’s from The Princess Bride, one of the most quotable movies ever made.

Someone recently got busted on an airplane for wearing a shirt quoting Inigo Montoya:

Hello, my name is Inigo Montoya. You killed my father. Prepare to die.

I have that t-shirt.

nukemhill on January 31, 2013 at 10:19 AM

The GOP is literally saying “screw the economy” by refusing to budge on sequester. The data is clear from Western Europe. Austerity retracts economies it does not grow them. The public sector is simply too deeply enmeshed. Why do you want people to lose their jobs?

libfreeordie on January 30, 2013 at 4:19 PM

Amazing how much power the GOP has isn’t it. The left has the Senate, the WH, the media, the schools …. and yet the GOP is controlling everything. Funny how everything used to be controlled by Bush – everything was and still his fault. But Obama is strangely powerless.

You ma’am, are an idiot.

Monkeytoe on January 31, 2013 at 7:55 AM

I concur.

Turtledove on January 31, 2013 at 10:46 AM

Why do you want people to lose their jobs?

libfreeordie on January 30, 2013 at 4:19 PM

Dems haven’t cared about people working for the last four years, child molester.

hawkdriver on February 1, 2013 at 7:17 AM

Comment pages: 1 2 3