What happened to all of the doom and gloom economic threads?

mercury14 said:

Cuba doesn't have millionaires?

Do a little research and get back to me, k?

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mercury14 said:

Anyone else making serious cash on the market upswing?

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KRCummings said:

Last I knew they didn't. I could be wrong but I've never heard of any real wealth in Cuba other than Castro.

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The recession ended, as recessions have always done before. But while we seem to be recovering, we have not yet recovered. The real issue is the strength of this recovery, and whether government "fixes" helped or hurt. I think they hurt and are still hurting.

Here is what I wrote in April:

"Pretty much no matter how you measure it, the Great Recession ended some time between June and December 2009 -- last year. I'm betting that the National Bureau of Economic Research says exactly that very soon. And my best guess of the NBER's best guess is June 2009." *

Here is what the NBER released yesterday (September 20).

"The Business Cycle Dating Committee of the National Bureau of Economic Research met yesterday by conference call. At its meeting, the committee determined that a trough in business activity occurred in the U.S. economy in June 2009. The trough marks the end of the recession that began in December 2007 and the beginning of an expansion."

The NBER took a little longer than I expected, but otherwise I was right on. Thank you.

Now some of you are pooh-poohing this announcement, saying we are still in recession. But the end of a recession does not mean "things are back to normal" or "things are where they were before." It sure doesn't mean things are wonderful. A recession is said to end simply when things stop getting worse -- when the "trough" is hit. It does not mean we have arrived at, much less surpassed, our previous peak.

It's easier to explain with a graph.

http://www.americanthinker.com/2010/09/the_recession_ends_sort_of.html

Source: St. Louis Federal Reserve.

You see in the graph that GDP bottomed out in June 2009, matching the NBER's call. But we have not reached the level of our previous peak of December 2007. We are "in recovery" but we have not yet "recovered." The NBER is apparently betting that we will recover (go above the 2007 level) before going as low as June 2009 again. (If not, then "double dip." What the NBER really just told us with its announcement is that it does not expect a double dip.)

We should not try to deny these facts. Real GDP is above its lowest point since December 2007. Unemployment is below its peak. The number of jobs is above its lowest point. Initial jobless claims are below their peak. Industrial production is above its lowest point. These are facts which we should not deny. We are past the low point.

But so what? Recessions have always ended. If you want to credit President Obama for ending this recession because it ended on his watch, then we need to also credit every single Republican President since World War II with ending one or more recessions: Eisenhower, Nixon, Ford, Reagan, George H. W. Bush and George W. Bush.

The troubling aspect of this "recovery" is its weakness. Look at the above graph again and see that GDP appears to be topping off again before even reaching its previous peak. In fact, the last three quarters showed deceleration. Their annualized growth rates were 5.0%, 3.7% and 1.6%. If that deceleration trend continues, it means we are essentially at a standstill right now, maybe even in decline again. And the Federal Reserve just recently used the phrase "widespread signs of a deceleration" to describe the present situation.

On the job front, the number of non-farm jobs in the economy declined in each of the last three months: June, July and August.

There are two hypotheses, at least. One hypothesis is the standard story of the government-as-savior crowd. TARP and other bailouts fixed the financial crisis and Obama's stimulus stopped the economic recession that resulted. Without either one, things would have been worse, much worse.

Here is another hypothesis. We had a recession, just like the other 10 times since World War II. As in every other such case, this recession would have ended in about a year if government had done nothing in particular. But this time, the extra costs and uncertainties caused by government "fixes" in fact prolonged and deepened this recession and threatened a double-dip or stalling out of economic activity.

Neither hypothesis can be "proved," since all we know is what government did and what happened. We do not what might have happened had we done something else.

But here is my take. The times we let government do the most to "fix" a recession, meaning the Great Depression and our current Great Recession, were the very times the economy did the worst. When government let things more or less alone, the economy recovered fairly quickly and with minimal damage.

We also have the academic studies by, of all people, Christina Romer, Obama's initial chair of the Council of Economic Advisers, that say fiscal policies (e.g. government spending or "stimuli") did not get us out of the Great Depression or any of our post-war recessions.

The analogy is bleeding a patient. If the doctors bleed a patient and he gets better, they take credit. If the patient gets worse, the doctors say he was not bled enough.

Paul Krugman is the quintessential Dr. James Craik of our day. Krugman seriously believes that Japan's problem was that it was not bled enough! Enough stimuli to cause a debt of 200% of GDP, highest in the developed world, resulting in two decades of near non-existent growth, and Krugman still says more bleeding needed. (Do facts ever matter to these guys?)

I think, at this point, we have enough evidence for both bleeding as a medical cure and fiscal stimulus as an economic cure that we can stop killing patients by bleeding them to death.

We have two good pieces of advice in such matters, one from Hippocrates and the other from our space program. Hippocrates said, "First, do no harm." Our space program's rule of flight control was, "If you don't know what to, don't do anything."

You can live by such rules. Or you can believe Paul Krugman. How about we vote on it this November?

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trysail said:

Define your terms.

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Frisco_Slug_Esq said:

Have you seen the volume return?

Have you not seen the pattern of the last three rises to 10,600 and the subsequent retreats to 10K?



Of course, if you want someone to back you up, U_D has made money and every swing of the market...

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Frisco_Slug_Esq said:

Randall Hoven
randallhoven.com

* Talk about your unreliable lying rw sources of propaganda that A_J endlessly c&ps in lieu of thought...

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Sept. 28 (Bloomberg) -- The U.S. dollar is “one step nearer” to a crisis as debt levels in the world’s largest economy increase, said Yu Yongding, a former adviser to China’s central bank.

Any appreciation of the dollar is “really temporary” and a devaluation of the currency is inevitable as U.S. debt rises, Yu said in a speech in Singapore today.

“Such a huge amount of debt is terrible,” Yu said. “The situation will be worsening day by day. I think we are one step nearer to a U.S.-dollar crisis.”

Yu also said China is worried about the safety of its foreign-exchange reserves including those invested in U.S. Treasuries as the U.S. currency weakens, reiterating his earlier views on the dollar assets. The U.S. will record a $1.3 trillion budget deficit for the fiscal year ending Sept. 30, the Congressional Budget Office said Aug. 19.

The estimated budget deficit for this fiscal year would be equivalent to 9.1 percent of gross domestic product, the CBO said. That would make it the second-largest shortfall in 65 years, exceeded only by the 9.9 percent in 2009.

The CBO also projected the U.S. would have a cumulative deficit of $6.27 trillion in the next decade, higher than its March estimate of $5.99 trillion.

Reduced U.S. Holdings
China, the biggest foreign investor in U.S. government bonds, cut its holdings by about 10 percent to $846.7 billion in the 12 months ended July, according to the Treasury Department.

U.S. Treasuries fail to provide safety or liquidity in managing China’s $2.45 trillion foreign-exchange reserves, Yu said in an e-mail in August. To help cool demand for the securities, China needs to curb the growth of its foreign reserves by intervening less in the currency market, he said.

China should reduce its holdings of U.S.-dollar assets to diversify risks of “sharp depreciation,” Yu said in July. The nation should convert some holdings in U.S. dollars into assets denominated in other currencies, commodities and direct investments overseas, he wrote in a commentary in the China Securities Journal.

The increased convertibility of the yuan will ease pressure on the currency to appreciate, Yu said today at an event organized by Singapore Management University.

The yuan has strengthened almost 2 percent against the dollar since June 19, when China’s central bank said it will pursue a more flexible exchange rate. China maintained a peg of 6.83 yuan per dollar from July 2008 to June 2010.

Yuan Level
China will independently determine the level of the yuan and the U.S. doesn’t need to vote on the issue this week, Vice Commerce Minister Chen Jian said in Taipei yesterday.

The U.S. House of Representatives is due to vote tomorrow on legislation pressing China to raise the currency’s value amid assertions the yuan is undervalued and gives the Asian nation a trade advantage. The legislation would let companies petition for higher duties on Chinese imports.

“The basic trend is for an appreciation” of the yuan, Yu said in an interview after his speech today. “No one can predict the specific pace of the appreciation. This is difficult to say as it depends on circumstances. We should not be speculators.”

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mercury14 said:

This upswing is at 10,860 though. In September. Despite your narrative that the market was reacting negatively to Obama.

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JohnnySavage said:

A weaker Dollar would suck for the Chinese, but would be good domestically.

If I had control over the Dollar, as the Chinese government has over the yuan, I'd devalue the Dollar by 15%.

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mercury14 said:

Why do you C&P stupid partisan crap? Are you a stupid partisan parrot?

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Frisco_Slug_Esq said:

That really a great idea with a struggling economy?

Reducing purchasing power?



You tell me.

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JohnnySavage said:

Sell more stuff overseas, put workers back on the line.

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Frisco_Slug_Esq said:

Do you read anything outside of your comfort level?


Hate alternative points of view?


I think so...

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Frisco_Slug_Esq said:

I don't think that's a viable option as high as our expected wage and benefit packages are...

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JohnnySavage said:

The best part of this discussion will be when LT joins and starts sounding like Pat Buchanan.

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vetteman said:

We've missed your incessant Obama boosting, where have you been?

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vetteman said:

Hahaha, I used to work, the fruits of which now allow me to do whatever I please. Did you check in on my pic thread?

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vetteman said:

Thanks, it's hard to get in four or five road trips a year on my welfare money.

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Ulaven_Demorte said:

I have those things that preclude me from sitting around here on my ass posting with you nimrods all hours of the day.

A life and a job.

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