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.


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True. The “housing comeback” championed last evening was actually homeowners trying to sell their houses before year-end to avoid new Obamacare taxes. There is a new 4% Obamacare real estate tax on house sales above $400,000…which is about every house in NY and NJ.

monalisa on January 30, 2013 at 9:29 AM

I thought I read somewhere that the housing market was benefiting from people refinancing at the ridiculously low rates. I know I took advantage of that last year. But once that’s exhausted, the market will take a dip.

Doughboy on January 30, 2013 at 9:45 AM

@WCVB tweeted:
WCVB
U.S. economy shrinks for first time since recession http://t.co/b1iBH7Is #breaking

45 mins ago from twitter.com by partner

canopfor on January 30, 2013 at 9:46 AM

Heh. A/P spin. It’s not as bad as it looks.

MNHawk on January 30, 2013 at 9:47 AM

Dip dippity dip dip doo!!

LoganSix on January 30, 2013 at 9:49 AM

But, the economy is getting better, Colin Powell said so last night on BOR. He said he voted for Ogimmeeallyourmoney twice because of his economic plans. He’s a good republican so he must be right.

Kissmygrits on January 30, 2013 at 9:50 AM

I’m not sure about that. I think that we’ve pretty much decoupled the stock market from the economy as a result of so much government interference and Fed quantitative easing.

The stock market has soared under Obama, but the economy has not, incomes for most Americans have fallen, and purchasing power has eroded decreasing demand.

Frankly, I just don’t pay attention to what the stock market is doing anymore. Obviously, if it dropped 1,000 points, that would be a big deal. But, hitting 14,000 after a quarter of negative growth should illustrate that it is no longer a true indicator of the economy.

Resist We Much on January 30, 2013 at 9:28 AM

Correct… Wall Street, which is mainly run and controlled by very left wing limousine liberals, is totally detached from the real economy and only cares about two things: First, borrow money form the Big Government at ZERO interest so they can make huge profits by lending it to their customers at much higher interests… Second, have the government buy from the banks the trillion of dollars of toxic assets i.e. the bad mortgages… All this is achieved by the government printing trillions of dollars at the expense and peril of the nation. Obama is the biggest friend ever of Wall Street despite all the anti-Wall Street red meat rhetoric that he feeds to his stupid socialist base…

Our side should stop defending Wall Street because they are not at all what Capitalism and Free Market should be about… In fact they are the opposite of true Capitalism and Free Market They are run my left wing greedy hypocrite limousine liberals who want to make trillions of dollars at the expense of the rest of us… Wall Street-Big Government alliance is making a lot of destruction to our nation…

So next time the lunatics at OWS protest against Wall Street, just watch and laugh because the lunatic base of the socialist party is only attacking the elites of the socialist party… All good for us and the nation…

mnjg on January 30, 2013 at 9:53 AM

Has the media called it a ‘recovery’ yet?

fossten on January 30, 2013 at 9:57 AM

My first day of not listening to Rush in over 20 years. Ahhhhh.

Mr. Arrogant on January 30, 2013 at 10:01 AM

I am afraid it is going to get worse…I truly hope I’m wrong.

d1carter on January 30, 2013 at 10:01 AM

A recession is defined by two success quarters of contraction, and we should remember that this is the advance estimate of Q4.

That is true, but the government is playing with this number via excessive spending. Since we count both private and government spending in GDP, jacking up the government spending masks the fact that the private sector is most decidedly NOT “doing fine”. We are in a recession, but the government has taken pains to hide that by increasing its spending.

Physics Geek on January 30, 2013 at 10:07 AM

Jobs, jobs, jobs…like a laser.

d1carter on January 30, 2013 at 10:11 AM

MSM spin: “Economy contracts 0.1% due to Republican obstructionism” or “Shadow of George W Bush still looms over US economy”.

Penfold on January 30, 2013 at 10:12 AM

The failure of the GOP to immediately acquiesce to the demorat immigration plan has caused this.

Even you dolts can understand that 20 million new citizens added overnight would create jobs and economic success the likes of which we have never known.

Bishop on January 30, 2013 at 10:16 AM

Rick Santelli: We are Europe now…

d1carter on January 30, 2013 at 10:18 AM

If only we had passed immigration reform earlier…and gun control.

d1carter on January 30, 2013 at 10:19 AM

mnjg on January 30, 2013 at 9:53 AM

Exactly.

The Dow and S&P 500 only measure large company success. Large companies do well under Obama because the Obama squashes competition and start-ups for them.

And 14,000 isn’t a great Dow price. It was almost there in 2007. SIX years ago!

blink on January 30, 2013 at 9:56 AM

I know, but the Left has been pointing to the DJIA as an indicator of the success of Obamanomics – and they are right, but they are ironically championing phenomenal growth for the 1% and diminishing prosperity for everyone else.

It used to be that the stock market was an indicator of the overall economy and prosperity. There should be NO delusion about that any longer and it needs to be pointed out.

Resist We Much on January 30, 2013 at 10:22 AM

“Hello Ben….it’s Barry here…”

Little Boomer on January 30, 2013 at 10:22 AM

Is this the economic growth from the “green shoots” Timmy was referring to?

GreatCommunicator on January 30, 2013 at 10:24 AM

Newtown! Immigration! Football injuries!

I am afraid it is going to get worse…I truly hope I’m wrong.

d1carter on January 30, 2013 at 10:01 AM

You’re not. In fact, it’s already worse. The numbers are cooked to begin with.

I’m curious, did we have ONE quarter of negative GDP under Bush?

rrpjr on January 30, 2013 at 10:27 AM

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

Are you daft? Kidding, right?

Obie is the MSM’s ‘Preciousssssss’ and they will, with their accomplices in academia, provide cover and either “cook the numbers’ or figure out how to blame someone else…like Booosh!

belad on January 30, 2013 at 10:27 AM

I hope you all here at HA are prepared.

Bmore on January 30, 2013 at 10:28 AM

Duh. Jackass has been reelected, the numbers no longer have to be fudged.

slickwillie2001 on January 30, 2013 at 10:28 AM

But the stock market, the stock market is setting records! I said this before. Volume does not equal value.

Bmore on January 30, 2013 at 10:31 AM

Newtown! Immigration! Football injuries!

rrpjr on January 30, 2013 at 10:27 AM

We need congressional hearings on deer-horn powder.

slickwillie2001 on January 30, 2013 at 10:31 AM

Don’t worry…Dr. Bernanke and his wonderful emporium of QE-infinity potions are here to make it all better.

Robert_Paulson on January 30, 2013 at 10:32 AM

Gay Marriage
Gun Control
Destroy Fox News & Talk Radio
Global Warming

Focus on Priorities People….

workingclass artist on January 30, 2013 at 10:34 AM

The report isn’t that bad. We can’t have it both ways: belittling growth based on inventory restocking and gloating about contractions significantly based on slowdowns in the same indicator.

bobs1196 on January 30, 2013 at 10:35 AM

The government continues to try to keep the balloon inflated when it’s riddled with holes. Can’t let up for a second!

stillings on January 30, 2013 at 10:41 AM

Did the lead economist
Rosie Senario, Phd get tossed under the bus?

seven on January 30, 2013 at 10:42 AM

But maybe he’s not too good at it.

verbaluce on January 28, 2013 at 1:50 PM

rogerb on January 30, 2013 at 10:45 AM

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

So! That explains why, for example, the voters of Detroit put all those fiscally conservative Republicans in office the moment everybody realized their former leftist, union-co-opted capo-ocracy was the problem…oh…wait…

Knott Buyinit on January 30, 2013 at 10:46 AM

Thank goodness we dodged the bullet of having that successful turn around artist Romney.

“Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.”
Winston Churchill

jukin3 on January 30, 2013 at 10:46 AM

It used to be that the stock market was an indicator of the overall economy and prosperity. There should be NO delusion about that any longer and it needs to be pointed out.

Resist We Much on January 30, 2013 at 10:22 AM

The stock market could be referred to as a “leading” indicator of the economy. It is a guesstimate by financial gurus of what they expect is to come.

Buying and selling seem to be controlled by deep pockets now and they try to fulfill their own prophesies.

Vince on January 30, 2013 at 10:48 AM

I just have to say, I love that pic of Obama and the giant screw. So appropriate for stories on the economy.

NickelAndDime on January 30, 2013 at 10:50 AM

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.

By who? The MSM? No, they’ll talk about LINGERING AFTER-EFFECTS of GW Bush. Headwinds. Tsunami’s. Intransigent conservatives. Euro crisis.

ANYTHING BUT OBAMA!

GarandFan on January 30, 2013 at 10:51 AM

The MSM is already spinning the bad economic news, when they acknowledge it at all, as the result of “austerity”, and therefore further evidence of the need for more government spending.

Given the lack of intelligence demonstrated by 51% of the electorate last November 6, and the ineptness of the GOP “leadership” in Congress, I have little doubt the “austerity is bad” narrative will take hold.

MidniteRambler on January 30, 2013 at 10:53 AM

Be very thankful that the estimated Q4 annualized inflation was only 0.6%. Of course, if you bought anything lately, you’d say that’s a bunch of Bravo Sierra, but it allowed the BEA to say that real GDP didn’t slip as bad as it should have.

Steve Eggleston on January 30, 2013 at 10:54 AM

The economy shrunk under dear Leader?!

Inconthievable!

Wino on January 30, 2013 at 10:55 AM

Hey, Where are all the trolls acknowledging Obama’s ownership of this debacle?

Galt2009 on January 30, 2013 at 10:57 AM

Obama is the Dr. Kevorkian of our economy.

gsherin on January 30, 2013 at 10:58 AM

191,000 jobs were added

tomas on January 30, 2013 at 11:00 AM

“Good” news – ADP says private-sector employment rose 192K in January. Not-so-good news, they revised their wildly-optimistic December down from 215K to 185K.

Steve Eggleston on January 30, 2013 at 11:02 AM

Even the WSJ is using the ‘U’ word:

U.S. Economy Unexpectedly Contracts in Fourth Quarter
Private-Sector Hiring Rose by 192,000 in January, ADP Reports
http://online.wsj.com/article/SB10001424127887324156204578273611039517142.html

Galt2009 on January 30, 2013 at 11:02 AM

I know, but the Left has been pointing to the DJIA as an indicator of the success of Obamanomics – and they are right, but they are ironically championing phenomenal growth for the 1% and diminishing prosperity for everyone else.

It used to be that the stock market was an indicator of the overall economy and prosperity. There should be NO delusion about that any longer and it needs to be pointed out.

Resist We Much on January 30, 2013 at 10:22 AM

.
It IS an indicator of the overall economy and prosperity:

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.

We ARE in a DEPRESSION.

The MSM approach? “If we don’t admit it, it isn’t real.”

PolAgnostic on January 30, 2013 at 11:02 AM

Obama is the Dr. Kevorkian of our economy.

gsherin on January 30, 2013 at 10:58 AM

Correction: Obama is the Dr. Kevorkian of our Liberty.

Galt2009 on January 30, 2013 at 11:03 AM

191,000 jobs were added

tomas on January 30, 2013 at 11:00 AM

The federal jobs report will be released later this week.

DKCZ on January 30, 2013 at 11:03 AM

The stock market could be referred to as a “leading” indicator of the economy. It is a guesstimate by financial gurus of what they expect is to come.

Buying and selling seem to be controlled by deep pockets now and they try to fulfill their own prophesies.

Vince on January 30, 2013 at 10:48 AM

The stock market is not a leading indicator of the economy… In fact if anything the stock market will not tell the truth about the real state of the economy until the collapse arrives such as the 2008 housing collapse… The stock market is not the economy, the stock market is not capitalism or free market, the stock market is a bunch of a very greedy hypocrite limousine liberal making huge profits with their alliance with big government…

First, they borrow money form the Big Government at ZERO interest so they can make huge profits by lending it to their customers at much higher interests… Second, they have the government buy from the banks the trillion of dollars of toxic assets i.e. the bad mortgages… All this is achieved by the government printing trillions of dollars at the expense and peril of the nation. Obama is the biggest friend ever of Wall Street despite all the anti-Wall Street red meat rhetoric that he feeds to his stupid socialist base…

mnjg on January 30, 2013 at 11:04 AM

So, the Socialists are running out of other people’s money..?

d1carter on January 30, 2013 at 11:04 AM

Just facilitating

tomas on January 30, 2013 at 11:05 AM

“Good” news – ADP says private-sector employment rose 192K in January. Not-so-good news, they revised their wildly-optimistic December down from 215K to 185K.

Steve Eggleston on January 30, 2013 at 11:02 AM

I am interested to know who runs ADP?… Is it some limousine liberal a**hole?…

mnjg on January 30, 2013 at 11:05 AM

The federal jobs report will be released later this week.

DKCZ on January 30, 2013 at 11:03 AM

Friday, actually. I believe tomas was referring to the ADP report, which was released today and which claims that 192K private-sector jobs were created in January.

Of course, ADP has been historically optimistic, as proven by the December results and downward revision.

Steve Eggleston on January 30, 2013 at 11:06 AM

It IS an indicator of the overall economy and prosperity:

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.

We ARE in a DEPRESSION.

The MSM approach? “If we don’t admit it, it isn’t real.”

PolAgnostic on January 30, 2013 at 11:02 AM

The stock market is not a leading indicator of the economy or prosperity, not anymore… Not in probably the last 20 years… In fact if anything the stock market will not tell the truth about the real state of the economy until the collapse arrives such as the 2008 housing collapse… The stock market is not the economy, the stock market is not capitalism or free market, the stock market is a bunch of a very greedy hypocrite limousine liberal making huge profits with their alliance with big government…

First, they borrow money form the Big Government at ZERO interest so they can make huge profits by lending it to their customers at much higher interests… Second, they have the government buy from the banks the trillion of dollars of toxic assets i.e. the bad mortgages… All this is achieved by the government printing trillions of dollars at the expense and peril of the nation. Obama is the biggest friend ever of Wall Street despite all the anti-Wall Street red meat rhetoric that he feeds to his stupid socialist base…

mnjg on January 30, 2013 at 11:07 AM

Yikes:

Yikes is right…if this keeps up Obama is going to try to buy an economy again. Seems the man can’t buy off an economy as easily as alot of his supporters though.

lynncgb on January 30, 2013 at 11:08 AM

Quickly let’s legalize 11 million people that need social services.

Oil Can on January 30, 2013 at 11:10 AM

The stock market is not a leading indicator of the economy or prosperity, not anymore… Not in probably the last 20 years… In fact if anything the stock market will not tell the truth about the real state of the economy until the collapse arrives such as the 2008 housing collapse… The stock market is not the economy, the stock market is not capitalism or free market, the stock market is a bunch of a very greedy hypocrite limousine liberal making huge profits with their alliance with big government…

mnjg on January 30, 2013 at 11:07 AM

Exactly. If the stock market were anything like the economy, much less an accurate prediction of its future, the Dow Jones would be in the double digits by now. Obama’s re-election should’ve sent it PLUNGING, and frankly I was astounded that it didn’t. Barring incredibly obvious things like the 9/11 attack or the ’08 housing bust the stock market hardly ever reflects what’s going on in America anymore.

MelonCollie on January 30, 2013 at 11:11 AM

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.

LOL, the politburo won’t allow the figure(s) to remain negative – they’ll be ‘adjusted’ to something better. Secondly, if you *really* think the blame will be aimed at the WH, well… you’re simply delusional.

Midas on January 30, 2013 at 11:13 AM

Can someone clarify the headline?
It reads:

Q4 GDP drops to -0.1%

Did it drop to -0.1%
Or did it drop -0.1%??

MityMaxx on January 30, 2013 at 11:13 AM

I am interested to know who runs ADP?… Is it some limousine liberal a**hole?…

mnjg on January 30, 2013 at 11:05 AM

Probably, though it’s important to note both ADP and the Bureau of Labor Statistics use surveys, and the BLS has had it in for Wisconsin in its survey since mid-2011.

The final say is the Quarterly Census of Employment and Wages, which has data from every employer covered by either state or federal unemployment insurance. Unfortunately, it’s 6 months behind (and for the amateurs, not seasonally-adjusted).

Steve Eggleston on January 30, 2013 at 11:14 AM

MityMaxx on January 30, 2013 at 11:13 AM

Is at.

Bmore on January 30, 2013 at 11:15 AM

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. Off to the reeducation camps and the Gulag with them.

farsighted on January 30, 2013 at 11:15 AM

mnjg on January 30, 2013 at 11:07 AM

MelonCollie on January 30, 2013 at 11:11 AM

.
Three questions:

1) Did you click on the link provided?

2) Did it work?

3)What does it mean when the weekly volume of shares traded drops by over 60% in less than 4 years when the Federal Reserve has spent trillions of dollars openly propping up the markets?

PolAgnostic on January 30, 2013 at 11:16 AM

Thanks

MityMaxx on January 30, 2013 at 11:17 AM

MityMaxx on January 30, 2013 at 11:13 AM

The 4th quarter real GDP (adjusted for inflation and season, and annualized) dropped 0.1% from the 3rd quarter real GDP.

Steve Eggleston on January 30, 2013 at 11:17 AM

Recovery Spring? /

RovesChins on January 30, 2013 at 11:19 AM

Ok, thanks Steve Egg for clarifying.

I think Headline for this post needs to be altered.

Or maybe I am just an idiot and don’t understand the meaning…..which that is more than likely the case.

MityMaxx on January 30, 2013 at 11:19 AM

A recession is defined by two success(ive) quarters of contraction, and we should remember that this is the advance estimate of Q4.
That’s the textbook definition. The National Bureau of Economic Research uses its own, politicized definition of recession. Hence, even if 1Q2013 GDP also went negative, it probably won’t be called a recession by them and thus not termed as such by the Rat Presstitute Organs.

Steve Eggleston on January 30, 2013 at 11:20 AM

MityMaxx on January 30, 2013 at 11:19 AM

I think Ed put an extraneous “to” in there.

Steve Eggleston on January 30, 2013 at 11:21 AM

Three questions:

1) Did you click on the link provided?

2) Did it work?

3)What does it mean when the weekly volume of shares traded drops by over 60% in less than 4 years when the Federal Reserve has spent trillions of dollars openly propping up the markets?

PolAgnostic on January 30, 2013 at 11:16 AM

It proves the point that the Wall Street markets are FAKE…

mnjg on January 30, 2013 at 11:23 AM

The definition of a recession is:

“Anything that happens to the economy when an evil Republican is in the White House.”

Wino on January 30, 2013 at 11:23 AM

MityMaxx on January 30, 2013 at 11:13 AM

Here’s a chart:

http://www.foxbusiness.com/economy/2013/01/30/us-gdp-contracts-for-first-time-since-200/

lynncgb on January 30, 2013 at 11:25 AM

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

We ARE in a DEPRESSION.

The MSM approach? “If we don’t admit it, it isn’t real.”

PolAgnostic on January 30, 2013 at 11:02 AM

As became the case in the former Soviet Union, economic numbers coming from the government can no longer be trusted. The numbers and the process have become too heavily politicized. The government has become massive and pervasive and all government bureaucracies are dominated and run by Democrats.

farsighted on January 30, 2013 at 11:25 AM

Boehner will look like a genius by the end of the year.

First, he gets 99% of Bush tax cuts made permanent while getting Obama to own the economy with his “victory” Meanwhile, there have been some bad signs in Europe.

Today, Drudgereport announces: “GDP Shows Surprise Drop for U.S. in Fourth Quarter” and “GDP -0.1%…”

$165 billion in Q4 stimulus could not even generate a positive GDP return

I suggest that Republicans stay in disarray so Obama can own DC and the economy.

Own it Barack !!

J_Crater on January 30, 2013 at 11:26 AM

We are rapidly reaching the dive, where stimulus spending to prop up the markets begins its downward journey. Government and a few players are the ones “buying” in the stock market. Our inflation numbers are totally disconnected from reality and a we have a forced federal MANDATE to print the equivalent of 8 to 12 Nimitz class Aircraft carriers PER MONTH in fake money.

“It’s the deep breath before the Plunge.”

Bulletchaser on January 30, 2013 at 11:30 AM

it will be revised upward into positive territory, just in case Q1 is neg as well. They will not allow “recession” to be used…or will they.

I take it at face value; however, like Wilson stated, need crises to move public sentiment.

John Kettlewell on January 30, 2013 at 11:30 AM

Always based on previous.

Bmore on January 30, 2013 at 11:30 AM

Don’t worry, NBC News is on the case:

The U.S. economy stopped dead in its tracks in the last three months of 2012 as the halting recovery was slammed by the biggest cut in defense spending in 40 years, fewer exports and sluggish growth in company stockpiles.

I was under the impression that sequestration didn’t take effect yet? Am I missing something?

Regardless, the argument about defense spending now gives both parties cover to end sequestration and replace the defense cuts. Republicans never wanted defense cuts and Democrats have cover becuase it hurts GDP to cut defense.

In the end, we will spend more money that we don’t have and the problem will not be solved.

weaselyone on January 30, 2013 at 11:31 AM

In quarters.

Bmore on January 30, 2013 at 11:31 AM

Then once annually.

Bmore on January 30, 2013 at 11:32 AM

guys calm down– this is just the effects of the Recovery Act winding down exactly as planned, nothing to be alarmed about…

thurman on January 30, 2013 at 11:34 AM

Regardless, the argument about defense spending now gives both parties cover to end sequestration and replace the defense cuts.
weaselyone on January 30, 2013 at 11:31 AM

Don’t count on it. Count on Obama demagoging for more tax increases on the “rich.”

rrpjr on January 30, 2013 at 11:42 AM

It proves the point that the Wall Street markets are FAKE…

mnjg on January 30, 2013 at 11:23 AM


Ding! Ding! Ding! We have a winner!

It also proves the “dumb money” (i.e. you, me and all the other ‘retail’ investors) are smart enough to KNOW a rigged game when we see one. Which is one of the reason why the volume keeps DROPPING.

… but the rabbit hole goes much deeper …

Prior to the market collapse in September of 2008, people looked at their 401k’s and said, “Hey, this saving money and investing in the stock markets really works!”

But then the housing market bubble POPPED! – which is what happens when you are loaning out 125% of the house price but not requiring any proof of income and ignoring the credit reports that showed the people you were lending to have consistently defaulted on their previous loans.

(Anybody remember which political party DEMANDED looser lending standards because anything else was “RACIST!”?)

Would it by chance be the same political party which reappointed Ben Bernanke as Federal reserve Chairman so he could do everything in his power to:

1) Ramp up the market top line numbers – Dow at 14,000

2) Punish savers by driving interest rates artificaially low to try to FORCE the consumer spending to pick back up. (The Federal Reserve is currently purchasing ALL 10 year and longer debt issued by the Treasury – the 10 Year Treasury rate is used to determine ALL other interest rates – including Certificates of Deposit, etc.)

3) Ramp up the housing market by buying ALL the Mortgage Backed Securities (multi-billion dollar packages of mortgage loans made by people buying houses).

Every single ‘economic indicator” you see anymore is directly controlled BY the government.

PolAgnostic on January 30, 2013 at 11:48 AM

Negative GDP? Obama must have finally gotten around to focusing on the economy like a laser beam…

moo on January 30, 2013 at 11:49 AM

Your GDP has been increased from 3% to -0.1%.

jukin3 on January 30, 2013 at 11:56 AM

guys calm down– this is just the effects of the Recovery Act winding down exactly as planned, nothing to be alarmed about…

thurman on January 30, 2013 at 11:34 AM

So we can expect to start seeing proposals for a 2$ trillion stimulus now? GREAT

weaselyone on January 30, 2013 at 11:56 AM

“If not for Bush, Cheney, assault weapons and Global Warming, the GDP would have risen a hundred ‘n eleventy-six percent!!”

–Chris Matthews, Barack Obama, and assorted other reptiles

orangemtl on January 30, 2013 at 12:11 PM

“The economy I inherited…”

“Of course, NO ONE could’ve fixed Bush’s mess in just 4 years…”

Lying is as easy to Liberals as breathing.

ICanSeeNovFromMyHouse on January 30, 2013 at 12:15 PM

“But, but, but, free birth control!”

“The second first black president!”

“Michele Obama is a fashion icon!”

“For Pete’s sake, that bad man Mitt Romney hated 47% of the population, just because we expect government to take care of us!”

“Free stuff!”

“Mormons!!!”

“Sandy Hook!”

“Wee-wee’d up!”

All the above is why I am pretty much convinced letting it burn, regardless of the cost, is the only way out of the obamanation.

MidniteRambler on January 30, 2013 at 12:17 PM

Your GDP has been increased from 3% to -0.1%.

jukin3 on January 30, 2013 at 11:56 AM

1984′d

MidniteRambler on January 30, 2013 at 12:19 PM

Its the OBUMMER ECONOMY!

Aint this great?

TX-96 on January 30, 2013 at 12:23 PM

After the election comes the real truth?

Don L on January 30, 2013 at 12:25 PM

Q4 GDP drops to -0.1%

-
Pelosi will be saying this is good for some reason or another… and DWS will just say “No. It didn’t drop.”
-

RalphyBoy on January 30, 2013 at 12:28 PM

Obama is the biggest friend ever of Wall Street despite all the anti-Wall Street red meat rhetoric that he feeds to his stupid socialist base…

mnjg on January 30, 2013 at 11:07 AM

.
One other thing to take away from the graph I linked.

If you extend the trend line of the collapse in stock volume …

… it goes to ZERO by roughly September of 2015.

With friends like Obama, Wall Street doesn’t need to worry about the OWS nuts.

Don’t worry about that ZERO projection by the way, the markets will completely disentegrate LONG before we get to that point.

PolAgnostic on January 30, 2013 at 12:30 PM


Thank goodness we dodged the bullet of having that successful turn around artist Romney.

Romney failed to ‘turn-around’ his own sublimely inept campaign operation because the so-called “numbers guy” couldn’t read a damned poll. Could we all agree that the Romney debacle was an unmitigated failure and just let it go until the GOP foists its next loser on its hapless and divided base voters?

casuist on January 30, 2013 at 12:32 PM

DEMS: We need more taxing and spending!

TarheelBen on January 30, 2013 at 12:34 PM

….’we’ve turned a corner’…’all signs point to the economy improving’…

I keep hearing people say they have faith that the American people – as a collective – will ‘wake up’. I see no sign that the majority of Americans are intelligent enough or give a cr@p enough anymore to ever ‘wake up’.

The house is on fire, the fire alarm has been going off for SEVERAL YEARS NOW….this latest report is equivalent to the Firemen knocking on the door while screaming ‘wake up’ to the sleeping residents….and Americans are so stupid/partisan that they are arguing with each other over whose party/politicians are LESS CROOKED rather than objectively holding them all equally accountable & being able to see for themselves that ‘the house is burning down around them while they are arguing’…

The 1st statements coming out of the Obama administration are BULL$HI’ITE! It has been for the last few years…and we can all see – if we are honest with ourselves for a minuet – it’s getting worse.

Anyone with a valid argument has no problem sitting down and engaging in a conversation to prove their points to be valid. this President engages in personal/political destruction, lies, & -as we just saw lately – encourages the demonization & destruction of any opposing view….meanwhile, while eliminating any opposing view, his own policies that have ut into practice are destroying this nation – failing miserably. He promised in 2008 to ‘fundamentally change the U.S.’ – he has and continues to do so…and NOT FOR THE BETTER…and if we would just drop the partisan BS & objectively look around what to do from this poin would be easy….but it’s NOT GOING TO HAPPEN!

….will the last American out please bring the flag?!

easyt65 on January 30, 2013 at 12:34 PM

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