So why all the gloom? Housing is a bust but that just seems to make everything else much rosier. Maybe we need more housing busts, and more often, too. LOL.
I wonder if we haven't come to a point of 'decoupling' - not with foreign economies but within US society. We have a percentage of the population that will be torn to bits financially by the housing situation and another percentage that seems to sail along, fat and happy.
Maybe it's an illusion/hallucination (or lack thereof), but I don't see much real world improvment in the economy. Something isn't right. With all of the bad economic news coming down the internets tubes, and the SMs apparent euphoria over said news, there is a disconnect between the reality on the ground and the meme being generated by the powers that be in the financial markets. Maybe they're using the same software they use to count inflation and employment numbers.
We have a percentage of the population that will be torn to bits financially by the housing situation and another percentage that seems to sail along, fat and happy.
As Seb has said, its regional. I don't know a single person in my sphere being 'torn to pieces' by the RE bust. Not one single soul.
On the other hand my family on the coasts know quite a number of folks being shredded.
This report just confirms my belief a rate cut is unnecessary. We should probably have a rate increase, maybe as much as 50 bips.
Despite rising worries about commodity prices, the GDP price index, the broadest measure of price changes in the economy, rose just 0.8% annualized, matching a nine-year low. Inflation hasn't been lower since John F. Kennedy's administration."
It looks like there is at least one "Fool´s Day" a month on Wall Street....
In the accounting world, we have offers for work that we cannot even staff.
lama | 10.31.07 - 10:07 am | #
I'm on the verge of shutting down two of my three largest customers because we can't get enough parts to them. Its a log jam from office where the orders enter all the way to shipping dock.
The company has new machines on order but won't have them running for 12 months (long lead-time).
Excuse me brother, has anyone seen my recession? I could've swore I left it right over there by my 600,000 lost construction jobs, which I also can't seem to find...
European inflation was just announced at 2.6%, higher than expected. They are expecting the ECB to hold rates for a while. If the Fed cuts rates, how are we going to attract all the money we need to finance our deficits with lower interest rates and a weaker currency?
If the Fed cuts rates today, 25 bps or more, the commodities will provide his recession. We will see gasoline over $3.00 per gallon at the pump (went up 10 cents yesterday) and it will lead the way. Australia reduced their wheat crop size estimate for the 3rd time. Russia has put an export tax on some of their grains. Anyone notice that Fedex (or UPS) announced a 4.9% rate increase.
Interesting that every "1st level" component of GDP fell, with the exception of personal consumption expenditure (GDP growth only increased because PCE growth outpaced the fall in every other component). Even net exports fell, despite a thumping increase in exports of goods (BTW: WTF is the US exporting these days?), due to a significant drag from increased imports of goods (oil?).
One way to look at this data is to say "growth is growth, whatever the source" but another is to conclude that this is not a particularly positive report: if and when PCE craters, which it will do sooner or later, there's nothing to take-up the slack (surely exports cannot become the engine of US growth?).
Maybe all those unproductive billions that went into real-estate related activities are not going towards more productive outputs? Or are we just selling more planes, arms & Apple products?
Today is do or die day for the FED. They have continually said they are data dependent. Will if that is the case then the will at least hold the rate, especially given todays data.
If they cut, either they know the data is a fraud and/or they are a fraud.
I think to maintain that the FED is not a fraud, rate stay the same. They will sacrifice the market for the day, but at the same time get to kill the oil longs and dollar shorts.
I think to maintain that the FED is not a fraud, rate stay the same. They will sacrifice the market for the day, but at the same time get to kill the oil longs and dollar shorts.
There is no correlation between the FF rate, oil prices or the US$ index. I think I mentioned this before. It may seem logical, but does not hold in the face of the empirical data. It's an urban myth.
Screw it, lets cut the rate and party like its 1999 all over again....
I'm trying to attach an image, its from a JC Penny catalog from 1977, anyone who doenst think that imports have held down inflation take a look.... http://thumbsnap.com/v/OVA9MDy2.jpg
CurlyDan said: "if they lower rates (which I think they will), it's purely a helping hand to the banks.
the rest of the economy apparently has no need for rates cuts.
Hmmm, a consortium of banks (the fed) decides to help their own to the possible detriment to the rest of us. rational actors, indeed."
Take away the veiled conspiracy theory and I think you're pretty close. Seriously. In 1998 (LTCM episode) the Fed eased three times when GDP growth at the time was a full percentage point higher.
The Fed members may be concerned enough about the economy to ease, but that doesn't mean their concern is valid. I think Dryfly is right, they shouldn't ease because there's no real need, but that doesn't mean they won't because the Fed members are subject to the same biases and emotional responses as we all are.
O-Joe, Oil is priced in dollars, and dollars are becoming increasingly worthless, so yes, oil price is connected to the value of the dollar. I don't know how you can say otherwise; that's almost like saying a weak dollar has no impact on inflation.
I don't know what "growth" we've had this past quarter: layoffs everywhere, continued housing turmoil, crumbling financial sector. We don't build things, we don't export things, and we don't have much in the way of decent jobs any more. The data does not reflect reality, so I have to question the data.
I am starting to wonder if the "growth" they are measuring is just inflation and/or speculation. Also, I am confused about how personal consumption expenditure is part of "growth" - how is buying stuff "growth" when it is just charged to a credit card and minimum payments are made on it forever? It is not an actual product or something we can sell, so how is consumption "growth?"
I agree, something isn't right, but it'll all emerge -- just as we finally learned how so many middle-class neighbors could afford $50K SUVs and long family trips to Hawaii!
Not so fast with that robust GDP figure. Total BS. From the big picture blog see below. The PCE figure was drastically understated at only .8! A total crock.
"The consensus today for Nominal GDP was 5.1% and came in today at 4.7%, thus weaker than expected. Q3 GDP was fine , but not as good as the headline report reads."
The average of the price index since Q1 2004 to Q2007 was 2.98, ranging froma low of 1.7% to a high of 4.2%. Thus, if the deflator matched consensus, it would have generated a GDP of 1.9%; if it was at its recent 3 year average of 2.98%, GDP would be ~1%."
I'm interested in this sales tax shortfall that has been reported. Wasn't it 25 states reporting shortfalls? Maybe that's perfectly normal. 25 reporting shortfalls, and 25 reporting surpluses.
I think a more meaningful statistic (if it were available) would be an aggregate count of expected vs. collected sales tax for all states combined.
THE ENVIRONMENT DESTRUCTIVE MADNESS OF ECONOMIC GROWTH
The United Nations Climate Panel says Global Warming and Climate Change are accelerating faster than previously predicted because of ever greater human activity!
recently published:
Public Release: 22-Oct-2007
published in Proceedings of the National Academy of Sciences
Rise in atmospheric CO2 accelerates as economy grows, natural carbon sinks weaken
Human activities are releasing carbon dioxide faster than ever, while the natural processes that normally slow its buildup in the atmosphere appear to be weakening. These conclusions are drawn in a new study in the early online edition of the Proceedings of the National Academy of Sciences, Oct. 22-26. The report states that "together, these effects characterize a carbon cycle that is generating stronger-than-expected climate forcing sooner than expected."
Contact: Chris Field cfield@globalecology.stanford.edu
650-462-1047 x201
Carnegie Institution
Public Release: 22-Oct-2007
published in Journal of Geophysical Research - Oceans
North Atlantic slows on the uptake of CO2
Further evidence for the decline of the oceans' historical role as an important sink for atmospheric carbon dioxide is supplied by new research by environmental scientists from the University of East Anglia, who have taken measurements for a decade from merchant ships plying the North Atlantic.
Contact: Annie Ogden press@uea.ac.uk
44-160-359-2764
University of East Anglia
Public Release: 24-Oct-2007
Proceedings of the National Academy of Sciences
Decline in uptake of carbon emissions confirmed
A decline in the proportion of carbon dioxide emissions absorbed by land and oceans is speeding up the growth of atmospheric CO2, according to a paper published today in the US Journal: Proceedings of the National Academy of Sciences.
CSIRO
Contact: Dr. Mike Raupach Mike.Raupach@csiro.au
61-262-465-573
CSIRO Australia
Public Release: 9-6-2007
Published in Business management | Quality management a website for business leaders created by Edward de Bono and Robert Heller
The Global Leadership Failure
A "healthy" global economy that's making the planet sick. When quantum exceeds finite capcity; quantum must be reduced.
Over-population and population growth = QUANTUM that fuels economic growth. And economic growth fuels environmental damage to the planet's life support system causing global warming and climate change. Hence the perpetrators of economic growth are Terrorists because they deliberately destroy the interdependent ecological life support system of the planet.
Contact: Felix Leisinger globalallianceagainstignorance@gmail.com
0044-207-834-1331 Equal Earth - Home
AVERAGE GLOBAL ANNUAL ECONOMIC GROWTH IS AROUND 5%
THAT MEANS THE GLOBAL ECONOMY DOUBLES EVERY 20 YEARS
Thats doubling human activities exponentially every 20 years!
So why all the gloom? Housing is a bust but that just seems to make everything else much rosier. Maybe we need more housing busts, and more often, too. LOL.
I'd like to think that means there will be no rate cut. But hey what do I know.
I wonder if we haven't come to a point of 'decoupling' - not with foreign economies but within US society. We have a percentage of the population that will be torn to bits financially by the housing situation and another percentage that seems to sail along, fat and happy.
Maybe it's an illusion/hallucination (or lack thereof), but I don't see much real world improvment in the economy. Something isn't right. With all of the bad economic news coming down the internets tubes, and the SMs apparent euphoria over said news, there is a disconnect between the reality on the ground and the meme being generated by the powers that be in the financial markets. Maybe they're using the same software they use to count inflation and employment numbers.
Somthing ain't right.
What was CPI change for the quarter?
It would appear we are following on close behind in the UK. People need to consider debtconsolidation
quickly before this really bites..
We have a percentage of the population that will be torn to bits financially by the housing situation and another percentage that seems to sail along, fat and happy.
As Seb has said, its regional. I don't know a single person in my sphere being 'torn to pieces' by the RE bust. Not one single soul.
On the other hand my family on the coasts know quite a number of folks being shredded.
This report just confirms my belief a rate cut is unnecessary. We should probably have a rate increase, maybe as much as 50 bips.
That is if you believe these numbers.
I don't see how this can possibly be accurate, how can there be growth? Do they somehow skew the data?
GDP 3.9, deflator 0.8
The best of all worlds---Goldilocks!!
Numbers..............
50bps cut.
Numbers brought to you by Homeland Defense...
Moin,
this is probably the quote of the day....
Despite rising worries about commodity prices, the GDP price index, the broadest measure of price changes in the economy, rose just 0.8% annualized, matching a nine-year low. Inflation hasn't been lower since John F. Kennedy's administration."
It looks like there is at least one "Fool´s Day" a month on Wall Street....
In the accounting world, we have offers for work that we cannot even staff.
funny stuff: mozilo got finally sued by a pension fund. the headline: teamsters take on the tan-man
Construction Spending up 0.3%. Housing has bottomed!!!
In the accounting world, we have offers for work that we cannot even staff.
lama | 10.31.07 - 10:07 am | #
I'm on the verge of shutting down two of my three largest customers because we can't get enough parts to them. Its a log jam from office where the orders enter all the way to shipping dock.
The company has new machines on order but won't have them running for 12 months (long lead-time).
Fed should be considering a rate hike not a cut.
if they lower rates (which I think they will), it's purely a helping hand to the banks.
the rest of the economy apparently has no need for rates cuts.
Hmmm, a consortium of banks (the fed) decides to help their own to the possible detriment to the rest of us. rational actors, indeed.
what about the MEW ?
Excuse me brother, has anyone seen my recession? I could've swore I left it right over there by my 600,000 lost construction jobs, which I also can't seem to find...
European inflation was just announced at 2.6%, higher than expected. They are expecting the ECB to hold rates for a while. If the Fed cuts rates, how are we going to attract all the money we need to finance our deficits with lower interest rates and a weaker currency?
If the Fed cuts rates today, 25 bps or more, the commodities will provide his recession. We will see gasoline over $3.00 per gallon at the pump (went up 10 cents yesterday) and it will lead the way. Australia reduced their wheat crop size estimate for the 3rd time. Russia has put an export tax on some of their grains. Anyone notice that Fedex (or UPS) announced a 4.9% rate increase.
Interesting that every "1st level" component of GDP fell, with the exception of personal consumption expenditure (GDP growth only increased because PCE growth outpaced the fall in every other component). Even net exports fell, despite a thumping increase in exports of goods (BTW: WTF is the US exporting these days?), due to a significant drag from increased imports of goods (oil?).
One way to look at this data is to say "growth is growth, whatever the source" but another is to conclude that this is not a particularly positive report: if and when PCE craters, which it will do sooner or later, there's nothing to take-up the slack (surely exports cannot become the engine of US growth?).
Take the words "if", "may", "might" and "could" from our vocabulary and we are left mute.
Unbelievable, that the BEA has prices, 'seasonally adjusted at annual(ized) rates,' growing only 0.8% in Q3 07, down from 4.2% in Q1 and 2.6% in Q2.
Criminal.
Seb,
Maybe all those unproductive billions that went into real-estate related activities are not going towards more productive outputs? Or are we just selling more planes, arms & Apple products?
If the market has already priced in a FED rate cut, then we shouldn't expect a rally if a cut is announced correct?
Rally on the rumor, sell on the fact?
Wow, that even beats my estimate of ~3.1% GDP growth in Q3. Who's still talking of recession?
O-Joe
Today is do or die day for the FED. They have continually said they are data dependent. Will if that is the case then the will at least hold the rate, especially given todays data.
If they cut, either they know the data is a fraud and/or they are a fraud.
I think to maintain that the FED is not a fraud, rate stay the same. They will sacrifice the market for the day, but at the same time get to kill the oil longs and dollar shorts.
eaglewwit:
I think to maintain that the FED is not a fraud, rate stay the same. They will sacrifice the market for the day, but at the same time get to kill the oil longs and dollar shorts.
There is no correlation between the FF rate, oil prices or the US$ index. I think I mentioned this before. It may seem logical, but does not hold in the face of the empirical data. It's an urban myth.
O-Joe
Screw it, lets cut the rate and party like its 1999 all over again....
I'm trying to attach an image, its from a JC Penny catalog from 1977, anyone who doenst think that imports have held down inflation take a look.... http://thumbsnap.com/v/OVA9MDy2.jpg
Optimistic Joe,
Do you think that is changing with the "flattening of the world"?
CurlyDan said: "if they lower rates (which I think they will), it's purely a helping hand to the banks.
the rest of the economy apparently has no need for rates cuts.
Hmmm, a consortium of banks (the fed) decides to help their own to the possible detriment to the rest of us. rational actors, indeed."
Take away the veiled conspiracy theory and I think you're pretty close.
Seriously. In 1998 (LTCM episode) the Fed eased three times when GDP growth at the time was a full percentage point higher.
The Fed members may be concerned enough about the economy to ease, but that doesn't mean their concern is valid. I think Dryfly is right, they shouldn't ease because there's no real need, but that doesn't mean they won't because the Fed members are subject to the same biases and emotional responses as we all are.
Sebastia
O-Joe, Oil is priced in dollars, and dollars are becoming increasingly worthless, so yes, oil price is connected to the value of the dollar. I don't know how you can say otherwise; that's almost like saying a weak dollar has no impact on inflation.
I don't know what "growth" we've had this past quarter: layoffs everywhere, continued housing turmoil, crumbling financial sector. We don't build things, we don't export things, and we don't have much in the way of decent jobs any more. The data does not reflect reality, so I have to question the data.
I am starting to wonder if the "growth" they are measuring is just inflation and/or speculation. Also, I am confused about how personal consumption expenditure is part of "growth" - how is buying stuff "growth" when it is just charged to a credit card and minimum payments are made on it forever? It is not an actual product or something we can sell, so how is consumption "growth?"
Marcus Aurelius:
I agree, something isn't right, but it'll all emerge -- just as we finally learned how so many middle-class neighbors could afford $50K SUVs and long family trips to Hawaii!
Not so fast with that robust GDP figure. Total BS. From the big picture blog see below. The PCE figure was drastically understated at only .8! A total crock.
"The consensus today for Nominal GDP was 5.1% and came in today at 4.7%, thus weaker than expected. Q3 GDP was fine , but not as good as the headline report reads."
The average of the price index since Q1 2004 to Q2007 was 2.98, ranging froma low of 1.7% to a high of 4.2%. Thus, if the deflator matched consensus, it would have generated a GDP of 1.9%; if it was at its recent 3 year average of 2.98%, GDP would be ~1%."
something ain't right
It sucks when data doesn't match preconceptions huh?
3.9%! Can't be! Must..debunk.
Banker,
I would categorize this as a guesstimate, rather than "data" until all the revisions are in.
But it does seem to fly in the face of reason given all the talk of weakening retail sales that we've heard.
The consumption level claimed conflicts with state sales tax receipts.
Also, Banker, preconceptions? Rising prices everywhere are hardly preconceptions, and they conflict with the stated inflation numbers drastically.
Lies, lies, and more lies from the gubment.
Transient,
I too would expect revisions down from 3.9%. But it does give the perma doomers a shot in the knickers
dotcommunist,
I'm interested in this sales tax shortfall that has been reported. Wasn't it 25 states reporting shortfalls? Maybe that's perfectly normal. 25 reporting shortfalls, and 25 reporting surpluses.
I think a more meaningful statistic (if it were available) would be an aggregate count of expected vs. collected sales tax for all states combined.
INTERNATIONAL ASSOCIATION AGAINST IGNORANCE
internationalassociationagainstignorance@gmail.com
THE ENVIRONMENT DESTRUCTIVE MADNESS OF ECONOMIC GROWTH
The United Nations Climate Panel says Global Warming and Climate Change are accelerating faster than previously predicted because of ever greater human activity!
recently published:
Public Release: 22-Oct-2007
published in Proceedings of the National Academy of Sciences
Rise in atmospheric CO2 accelerates as economy grows, natural carbon sinks weaken
Human activities are releasing carbon dioxide faster than ever, while the natural processes that normally slow its buildup in the atmosphere appear to be weakening. These conclusions are drawn in a new study in the early online edition of the Proceedings of the National Academy of Sciences, Oct. 22-26. The report states that "together, these effects characterize a carbon cycle that is generating stronger-than-expected climate forcing sooner than expected."
Contact: Chris Field
cfield@globalecology.stanford.edu
650-462-1047 x201
Carnegie Institution
Public Release: 22-Oct-2007
published in Journal of Geophysical Research - Oceans
North Atlantic slows on the uptake of CO2
Further evidence for the decline of the oceans' historical role as an important sink for atmospheric carbon dioxide is supplied by new research by environmental scientists from the University of East Anglia, who have taken measurements for a decade from merchant ships plying the North Atlantic.
Contact: Annie Ogden
press@uea.ac.uk
44-160-359-2764
University of East Anglia
Public Release: 24-Oct-2007
Proceedings of the National Academy of Sciences
Decline in uptake of carbon emissions confirmed
A decline in the proportion of carbon dioxide emissions absorbed by land and oceans is speeding up the growth of atmospheric CO2, according to a paper published today in the US Journal: Proceedings of the National Academy of Sciences.
CSIRO
Contact: Dr. Mike Raupach
Mike.Raupach@csiro.au
61-262-465-573
CSIRO Australia
Public Release: 9-6-2007
Published in Business management | Quality management a website for business leaders created by Edward de Bono and Robert Heller
The Global Leadership Failure
A "healthy" global economy that's making the planet sick. When quantum exceeds finite capcity; quantum must be reduced.
Over-population and population growth = QUANTUM that fuels economic growth. And economic growth fuels environmental damage to the planet's life support system causing global warming and climate change. Hence the perpetrators of economic growth are Terrorists because they deliberately destroy the interdependent ecological life support system of the planet.
Contact: Felix Leisinger
globalallianceagainstignorance@gmail.com
0044-207-834-1331
Equal Earth - Home
AVERAGE GLOBAL ANNUAL ECONOMIC GROWTH IS AROUND 5%
THAT MEANS THE GLOBAL ECONOMY DOUBLES EVERY 20 YEARS
Thats doubling human activities exponentially every 20 years!
Of course t