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Econ - "doom and gloom", or, maybe not
Posted by: McQ on Thursday, May 29, 2008

Read this NYT lede very carefully:
The economy grew at a faster pace than originally estimated in the first quarter, the government said on Thursday, but the nation remained mired in its most stagnant period of growth in five years.
Then look at this graph and tell me the significance of the statement and why A) growth is "stagnant" and B) we appear to be "mired" in it?



(HT: Joel C.)
 
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Previous Comments to this Post 

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It isn’t even true! There are two quarters before it that are even more mired in stagnant growth! Gotta love the NYT; publicly displaying their foolishness and proud of it.

 
Written By: Grimshaw
URL: http://
...and tell me the significance of the statement and why A) growth is "stagnant" and B) we appear to be "mired" in it?
Because it’s the NYTimes and the President is a Republican.
 
Written By: bains
URL: http://
An oxymoron;
stagnant-growth

Another oxymoron;
Newspaper of record-NY Times.
 
Written By: timactual
URL: http://
no doom and gloom among the spammers I see.

I made a bet with a guy over on Redstate that the price of oil would be 15% less than it is now by years end.

It is just a hunch I have. Prices this high are unsustainable, we have new production coming online, and people are changing their buying habits. When these things finally catch up to the market, the speculators will stop trying to hoard.
 
Written By: kyleN
URL: http://impudent.blognation.us/blog
I made a bet with a guy over on Redstate that the price of oil would be 15% less than it is now by years end.
I’ll join you on the bet if someone takes it. Besides all the things I’ve read about refining ramping up, there are some little things that have piqued my interest... have you seen the new car adds that guarantee $2.99 a gallon for gas for 2009? They HAVE to be betting on the price coming down.
 
Written By: meagain
URL: http://
The economy is still growing after all these fears. Clearly, the charts shows that Q1 2008 is a slow quarter although Q1 2007 was even slower. Nonetheless, it is not yet a recession.

One economist is now calling this a ’growth’ recession. I have no idea what that means, but it lets him use the term recession even though his phrase had no meaning. So far, it’s a slowdown, but not a recession.
 
Written By: Kurt Brouwer
URL: http://www.fundmasteryblog.com
That is the weakest two quarter growth since 2001 recession. As Merrill Lynch’s David Rosenberg notes: "The key indicator of the strength of the domestic economy, final sales to domestic purchasers (GDP ex trade and inventories) remained in negative territory at -0.1% QoQ (was -0.4% prior to the revision). This is the first decline since 1991Q1 and is signaling a very fragile domestic economy."
 
Written By: Marco
URL: http://
"This is the first decline since 1991Q1 and is signaling a very fragile domestic economy."
I don’t think anyone is arguing it isn’t fragile ... that’s not the point of the post.

Is it "mired in stagnation?"
 
Written By: McQ
URL: http://www.QandO.net
Is it "mired in stagnation?"
Right now? Of course it is. And t is all Bush’s fault. Now, come mid to late November when we have President Elect HillObama, we’ll start to read about how things are getting ’better’. And by February next year, the papers will be singing sunshine about the economy, regardless of its state at that point.
 
Written By: meagain
URL: http://
I don’t think anyone is arguing it isn’t fragile ... that’s not the point of the post.

Is it "mired in stagnation?"

From where I sit yes. To revist the issue and tease out the data a little further, the revised GDP gains were: (i) defense spending by the federal government; (ii) inventory build ups; and (iii) net exports. That leaves the majority of the economy — call it "private domestic demand" — in contraction mode, with an annual rate of -0.4% (vs. -0.7% in advance GDP). Domestic Consumption, Fixed Investment, Exports, and State & Local governments ALL showed quarter over quarter losses.

That’s from a 40,000 foot level. From the trenches, I’ve seen a significant slow down in revenues of most of our portfolio companies (150 privately-held middle market companies which I think is a pretty good representative sample), margin compression and M&A activity is way down from recent years.

I think this cartoon sums it up pretty well http://bigpicture.typepad.com/photos/uncategorized/2008/05/30/not_a_recession.gif

 
Written By: Marco
URL: http://

 
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