Um. Wow.

Look what our friends over at Catch the Latest have brought to the table. (From US Bureau of Labor Statistics.)

I could swear that's going in the right direction . . .

10 responses to “Um. Wow.

  1. I’m as optomistic as the next guy Moe. But I figured this was entirely an exhaustive or accurate claim. Hopefully there will be serious economic recovery.

    First, over 60% (3.7%) of the growth came from inventory rebuilding, as opposed to just 0.7% in the third quarter. If you examine the numbers, you find that inventories had dropped below sales, so a buildup was needed. Increasing inventories add to GDP, while, counterintuitively, sales from inventory decrease GDP. Businesses are just adjusting to the New Normal level of sales. I expect further inventory build-up in the next two quarters, although not at this level, and then we level off the latter half of the year.

    While rebuilding inventories is a very good thing, that growth will only continue if sales grow. Otherwise inventories will find the level of the New Normal and stop growing. And if you look at consumer spending in the data, you find that it actually declined in the 4th quarter, both annually and from the previous quarter. “Domestic demand” declined from 2.3% in the third quarter to only 1.7% in the fourth quarter. Part of that is clearly the absence of “Cash for Clunkers,” but even so that is not a sign of economic strength.

    Second, as my friend David Rosenberg pointed out, imports fell over the 4th quarter. Usually in a heavy inventory-rebuilding cycle, imports rise because a portion of the materials businesses need to build their own products comes from foreign sources. Thus the drop in imports is most unusual. Falling imports, which is a sign of economic retrenching, also increases the statistical GDP number.

    Third, I have seen no analysis (yet) on the impact of the stimulus spending, but it was 90% of the growth in the third quarter, or a little less than 2%.

    Fourth (and quoting David): “… if you believe the GDP data – remember, there are more revisions to come – then you de facto must be of the view that productivity growth is soaring at over a 6% annual rate. No doubt productivity is rising – just look at the never-ending slate of layoff announcements. But we came off a cycle with no technological advance and no capital deepening, so it is hard to believe that productivity at this time is growing at a pace that is four times the historical norm. Sorry, but we’re not buyers of that view. In the fourth quarter, aggregate private hours worked contracted at a 0.5% annual rate and what we can tell you is that such a decline in labor input has never before, scanning over 50 years of data, coincided with a GDP headline this good.


    • hey there!
      interesting link.. the concept of bubbles and “new economy” philosophies are well documented and proven throughout history, but as one of the big investors said – we wouldn’t have had this last growing bubble for three decades if the financial regulations hadn’t been built down by reagan and then removed completely by bush. it was just a matter of time all along.

      And just a side-note – the occurences of bubble-economies are not an abstract law of nature but a purely man-made phenomenon – originating from the repetitive good-time hubris of greedy human nature. Thus nemesis and so forth…

      As for the stimulus, i really don’t know these things very well, but i found some numbers here, something about 600k jobs so far. And in terms of working – if private sector is slashing 10m jobs and the bill creates 4mill jobs, there will still be a 6mill job loss – even as the bill is working perfectly fine.

      But look how little is spent.. they must be holding back for late summer, suddenly boosting all figures off the charts right before mid-terms. It’s all working folks! Finally!


    • It’s always remarkable Steve, how the arc of ‘the bad’ runs from Dem administration to Dem administration, and they are able to overwhelm their Republican congresses, whereas Republican presidents are just powerless pawns in the hands of Dem congresses.

      So if Dems overwhelmed their GOP congresses, and Dem congresses overwhelmed GOP presidents, sound like GOP hasn’t had a single thing to do with the history of the US since – well, since when? Before Reagan I guess.


    • Moe; I thougt you knew me better than to suggest such a thing. I think 99% of ALL politicians are weasels and can be bought.
      I simply stated the facts about the Reagan and Bush administrations. One thing I know for sure; Mr. Obama and his administration are without a doubt the most corrupt ever. Well, let me think about that …..hmmmm…..yeah EVER.


  2. I’m kinda wondering just how “it’s all working”? Even if (and it’s quite a stretch) there were 600k jobs ‘saved or created’, I’m not too sure that the return on a $787 BILLION investment is in the “working perfectly fine” catagory. Something like $1.3 MILLION per job. Friend, the numbers of “spent” monies are very suspect; why are those in Congress seeking something like another $100 BILLION if there is so much left?
    The idea of Reagan and Bush “building down” financial regulations isn’t accurate. Reagan had a democratic controlled Congress, and Bush’s Congress was taken over by Democrats in 2006. Folks like Bill Clinton, Barney Frank, and Charles Schumer pressured banks (actually Fannie Mae and Freddie Mack) and the lending institutions to make reckless loans knowing the end result of said pressure. This is simply one aspect in the whole thing. When we blow all the smoke away, this (financial collapse of American banks) has been in the works for decades … why? Simply put, so the government could take control. I fail to understand why folks can’t see that control is being executed at an alarming rate. Right now EVERY policy of Obama is geared towards growth of the government and total control of every industry in America. Period.


    • i didn’t say it was working GOOD, just working.. hehe… but those numbers.. they’ve just spent about 1/4 so far, and lots if it are taxcuts. But still – if you say $30k pr job, and 4mill of them – your a bit over $100bn. But you have lots of long term costs of running a society in there as well – which someone has to pay.

      But the last part of your post, interesting thoughts. The government luring the financial industries for decades, in a tight scheme to take over everything. Feeding them easy money.

      Too bad every industry now have complete control over all branches of government though, after last week’s high court ruling. corporate america in complete control, the citizens in complete enslavement. and some babbling and theatrics on television.


    • It saddens me that you think that industry has complete control over the government. When I head Obama’s speech the other night I couldn’t believe (well, I could really) his comments about the Supreme Court decision. I mean Obama is the “Mother of all special interest” contributions, foreign and domestic. Too much for me to get into tonight. My Shi-Tzu (Sandy) is hungry! Gotta go! πŸ˜‰


    • Allright Steve, let’s look at the 28 years from Regan to Obama.

      Reagan had a Dem congress for 8 years and a Dem senate for 4 years.

      GHW Bush had Dem congress and senate forl 4 years.

      Clinton had a GOP congress for 6 years and a GOP senate for 6 years.

      George W had a GOP congress for 6 years and a GOP senate for 3 years.

      So in those 28 years:
      House was Republican 12 years and Democrat 16 years
      Senate was Republican 16 years and Democrat 12 years.
      Presidency was Repubican 20 years and Democrat 8 years.

      How were Dems stopping Republicans from doing anything? We had what we are supposed to have – the old pendulum. So if I am to believe you, the Dems won most of the time. So I guess that means the American people believe the Dems have the better ideas.

      Help me here.


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