"Gross domestic product contracted at a 3.8 percent annual pace from October through December, the most since 1982, the Commerce Department said today in Washington. A gain in stockpiles contributed 1.3 percentage points to growth,"
Because as we know inventory growth is the pipeline pushing too much forward to end consumption. Call it -5.1%. Estimators were correct.
"usinesses added $6.2 billion to their inventories after cutting them by $29.6 billion in the third quarter. The change in inventories added 1.32 percentage points to growth."
yogi: because of the trade deficit. The percentage decline in exports is bigger than the one in imports but the absolute difference between imports and exports declined. I think.
1 currency sooner [yogi](Unrated) writes: \tIf exports fell by more than imports how can the trade deficit be narrowing? 1 currency sooner [yogi] | 01.30.09 - 8:45 am | #
The trade deficit is calculated using absolute numbers, but you are comparing percentages, i.e. a 15.7% drop in a big number is larger in magnitude than a 19.7% drop in a smaller number. Thus the gap narrows. Just a guess.
Let's all build things that no one wants. And then lets stockpile them in our closets or around our waists as fat. Then count call the excess crap as growth.
BS number - services the largest component of consumption is UP 1.7% - come ojn. Private invenstories added 1.3 percen. Make the numbers relaistivc and that is your 6%p plus down. Govt spending up 20% is great. very healthy. Krugmahn must be wetting himself.
You made my point even more clearer. It is demands and wishes (example- to drive and buy groceries) aka consumption that make it seem real. We have to preserve jobs and discretionary income of average people and not obsess over stocks, returns and economic indicators because they are all meaningless without a functional free society.
//Perhaps. But my car is real. And it takes a small legion to build it. And I am quite sure my dinner last night was real, as I am not starving right now...and another small legion brought to my grocer the raw ingredients for said meal.
Mal investments exist and can be expanded by gov't, but there is always a real core.//
This will be revised upward in February. The inventory number is a little scary because businesses were definitely cutting back on their inventory, but just not fast enough, so there was a net gain.
The single biggest obstacle in the path of a large country becoming a superpower is a lack of willingness to consume beyond their "means". Sounds counterintuitive, but it is true.
Unless chinese or indians start consuming more (creating more internal jobs + economy + infrastructural demands) they will never achieve their potential. Frugality above a certain limit is the biggest obstacle to sustained high levels of employment.
Also how does a $6.2 billion increase in inventories contribute to a 1.3% increase in the quarterly number? This implies that the total US economy is only a 1.9 trillion dollars???
ill dilettante writes:
Also how does a $6.2 billion increase in inventories contribute to a 1.3% increase in the quarterly number? This implies that the total US economy is only a 1.9 trillion dollars???
ill dilettante(Unrated) writes: Also how does a $6.2 billion increase in inventories contribute to a 1.3% increase in the quarterly number? This implies that the total US economy is only a 1.9 trillion dollars???
The person who composes the report and the person who audits it for factual veracity are employed by the same government propaganda agency.
//Also how does a $6.2 billion increase in inventories contribute to a 1.3% increase in the quarterly number? This implies that the total US economy is only a 1.9 trillion dollars???//
Are the bailout programs counted toward government spending? If not, someone should get to changing it real quick. GDP might be positive by the final number!
Also how does a $6.2 billion increase in inventories contribute to a 1.3% increase in the quarterly number? This implies that the total US economy is only a 1.9 trillion dollars??? The 1.3% is an extrapolated annual rate.
The person who composes the report and the person who audits it for factual veracity are employed by the same government propaganda agency.
You could expect no less, it is governments job to protect it's people, false data prevents a further contraction in GDP and then of course deficit spending increases GDP.
Also how does a $6.2 billion increase in inventories contribute to a 1.3% increase in the quarterly number? This implies that the total US economy is only 1.9 trillion dollars???
Does this make any sense to anyone - quoting from the BAE release
"The real change in private inventories added 1.32 percentage points to the fourth-quarter change in real GDP after adding 0.84 percentage point to the third-quarter change. Private businesses increased inventories $6.2 billion in the fourth quarter, following a decrease of $29.6 billion in the third quarter and a decrease of $50.6 billion in the second.
Real final sales of domestic product -- GDP less change in private inventories -- decreased 5.1
percent in the fourth quarter, compared with a decrease of 1.3 percent in the third."
Q4 with Christmas sales and still -3.8/-5.1 aka that was the SHTF event. Q1/09 is going to be CFIT (Controlled Flight Into Terrain) and Q2 will be FEMA time!
Can't the accounting just adjust from FIFO to LIFO or average cost, to modify the value of current inventories and produce the desired numbers ? So the value of any increase in inventory is really unknown without knowing method used to book it ?
CNBC talking shit heads think it is anti-business to take back Wall Street bonuses. Oh boy, it should be treason to keep them. Those turds made this mess!
Can't the accounting just adjust from FIFO to LIFO or average cost, to modify the value of current inventories and produce the desired numbers ? So the value of any increase in inventory is really unknown without knowing method used to book it ?
10,000 Mosquitos
Yep...and the final decider is what you can actually sell it for.
Was just thinking the same thing. with all the cutting, I'm guessing that people bought stuff they would really use, leaving lots of CRAP sitting on the shelves. Crap that no one would buy unless they had throw-away $$.
I have taken a look at the tech note that underpins this data and the BEA included a large extrapolated increase in aircraft shipments from $14.3 billion in November to $39.6 billion in December. Does anyone here know what the actual delivery numbers were?
The single biggest obstacle in the path of a large country becoming a superpower is a lack of willingness to consume beyond their "means". Sounds counterintuitive, but it is true. lucifer | 01.30.09 - 8:54 am | #
The decline is outpacing even the keystroke-era speed and which people can step down operations.
Comrade Byzantine_Ruins
CBR, I've commented before on this. When things go south in a hurry, one simply can't cut fast enough. I've personally experienced this. Sooner or later you just pack up the tent.
CNBC talking shit heads think it is anti-business to take back Wall Street bonuses. Oh boy, it should be treason to keep them. Those turds made this mess!
Johnny Mustardseed | 01.30.09 - 9:15 am |
Ratigan was on Morning Joe this morning talking about RICO and fraud cases should be investigated.
This was in response to Obama's slapdown yesterday.
This whole hand waving of "better than expected" for stocks and economic numbers and "worse than expected" for commodities is a psychological magic trick.
Who cares?
If the forecasters are always wrong, shouldn't we be casting a critical eye on the consistent "expertise" of the forecasters?
Instead, shouldn't the numbers be examined in relationship to their previous performance.
then a 40% drop in profits would be exactly that, and not "better than expected".
then, things could be evaluated on reality, then...oh, forget it...we all know why its done
CNBC talking shit heads think it is anti-business to take back Wall Street bonuses. Johnny Mustardseed | 01.30.09 - 9:15 am | #
It would be anti-business NOT to take them back. Bonuses need to be awarded for performance, and taking Billions from Uncle Sam because you ran your company into the ground is not the kind of performance that needs rewarding.
xxxxxx if Denningers triangle shows S&P possibly hitting 200 bottom or going up to 950.... will the VIX even be useful to measure market sentiment ? I'm sure some gutsy traders will have a lot of fun in that kind of environment, unless they get wiped out on wrong trades ?
OMFG- Read Denniger about the market.....
We're almost there.
xxxxx | 01.30.09 - 9:24 am | #
Wow...that's the first public call I've seen that's in the neighborhood of my 150 bottom estimate. Except that he seems to be saying it's just the bottom of the next leg down.
If the stupid, stupid gov't and stupid, stupid politicians had not given these banks $350 B dollars, money that everyone on the face of the planet (minus the recipients)told them would be squandered, this wouldn't have happened.
There wouldn't have been money to distribute. Christ almighty, common sense is about as common as accurate gov't data.
If you don't want people to profit from bad business, DON'T GIVE THEM A BUNCH OF MONEY.
And for gods sake, don't now give them more!! Our collective memory is down to that of a gnat at this point.
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Looks like the world is still here this morning, though the economy is deflating.
Excess inventory in the face of falling demand . . . deflationary? Falling prices? Don't buy today what you can buy tomorrow and the day after for less and less?
The only way to curb abuse among bankers taking taxpayer money is to trot out some big name abusers in handcuffs. It can surely be done. There's bound to be reasonable cause under some law or another.
What this number screams is that industrial production in the US from a headline perspective is about to tank. Around the world we are seeing a 15-20% Y|YY declines. here we are down 7% and inventories in yesterdays durable goods report are at a record high since series was started. Autos looking for a tax credit per WSJ and the prop machine is saying innovation will die if auto isn't helped. It gets more surreal by the day.
The piece by Buiter on a bank solution referenced above by Robert is very good. It's a much more detailed plan for the idea common here of using the rescue money to start new banks which can make essential loans, allowing the old banks to be unwound and shut down properly. It's efficient (government expenditures go to the real economy) and fair (minimal moral hazard).
What I want to know is who bought the GS straight bond offering. Talk about coordinated this has to be coordinated stunt a la the WFC dividend raise. Is there a way to see via DTC who owns the GS bonds that were just sold without the FDIC umbrella?
S(Unrated) writes: What this number screams is that industrial production in the US from a headline perspective is about to tank.
To put it mildly. What will be really bad is the service sector / discretionary collapse. Sharper Image, Starbucks. Next come chotchke candle stores and stationers. Then teen fashion and new video games / consumer electronics.
It's funny to talk about the money to be made shorting GGP or Simon to the icy claws of debt that even now reach out for it. It's still gonna be a whole lotta hurting when all those agorae are shuttered.
Any experts on this board believe Government's figure of -3.8% more than the consensus figure of -5.4% (considering Government's more-or-less arbitrary(?) corrections for in(de)flation etc)
Accentuate the positive(negative), elimintate the negative(positive) and don't mess with mister in between.
Isn't life simple. No unbiased economic analysis here.
Hapsburger, could be because the market is tanking as a whole. Also, increased inventories might mean that people are buying less crap. Less crap bought means less places needed to sell said crap meaning empty malls, less office space, lower rents, and less space needed to store the crap. All these things that SPG, VNO, PSA are making their money off of.
okay, it stunk, my 11 mo old daughter knew 4Q GDP would smell like her diaper, the next big, meaty question is how many Qs of neg GDP will we have? 3? 5? 8? 179?
"The piece by Buiter on a bank solution referenced above by Robert is very good."
Yes, a good piece FairEcon, but our government has shown absolutely no ability for fiscal constraint, good judgement, or forward thinking (REGARDLESS which side of the aisle they're parked on) and ALL had to have been undertaken immediately - 4-years ago.
okay, it stunk, my 11 mo old daughter knew 4Q GDP would smell like her diaper, the next big, meaty question is how many Qs of neg GDP will we have? 3? 5? 8? 179?
"We really appreciate our union brothers' willingness and sacrifice to work with us as we restructure our business for long-term growth," - Joseph L. Hudson, Hudson Motor Car Co.
"the government counts an unwanted buildup of goods on store shelves as growth"
Just out of curiosity, which "government" is doing this counting, Bush's, or Obama's? If this shit-shining is continuing under Obama, that's not change I can believe in, and I voted for the guy. Not that I'm surprised.
Never thought I'd live in a world where the worst GDP in 26 years would (in my humble opinion) rally the markets.
"Financial advisors," and other stock jobbers get bonuses whether they make money for their customers or not. They are like congress. When in session your wealth is never safe.
It appears Denninger may have lost his marbles. RockyR | 01.30.09 - 9:43 am | #
That's been readily apparent from his various inverctive filled rantings over recent months. However, that doesn't necessarily invalidate his predictions. He's been right about of lot of stuff.
I'm kind of confused. The headlines (about half of them) say the economy shrank by 3.8%, and the other half say it shrank by a 3.8% "pace."
If the economy shrank 3.8% in real dollars vs Q3, that would be about a $550 billion shrinkage. Or did it shrink less than that? Is it tecnnically accurate to be saying the economy shrank by 3.8% in Q4?
Does anyone really believe, than in the midst of a major economic crisis with massive job losses and a lack of certainty and confidence, that Americans increased their spending on services by 1.7%? Are services really that large a contingent of consumer spending that a simple 1.7% increase will almost completely negate -22.4 and -7.1 percents in spending on goods?
ALSO:
Can anyone tell me how this works?
3Q Inventories: -29.6 Billion : +0.84% GDP
4Q Inventories: +6.2 Billion : +1.32% GDP
So inventories increase GDP regardless if they go up or down? Very suspicious...
"Real personal consumption expenditures decreased 3.5 percent in the fourth quarter, compared with a decrease of 3.8 percent in the third. Durable goods decreased 22.4 percent, compared with a decrease of 14.8 percent. Nondurable goods decreased 7.1 percent, the same as in the third. Services expenditures increased 1.7 percent, in contrast to a decrease of 0.1 percent."
into this:
"Consumer spending, considered an engine of economic growth, fell 3.5% in the fourth quarter, as opposed to a 3.8% drop in the third quarter.
In particular, there was a 22.4% drop in consumer spending on durable goods during the December quarter, as well as a 7.1% drop in nondurable goods, the biggest drop since 1950. Spending on services rose 1.7%.
Nice!
To the moon, Alice!!!
Building inventories?
Excess capacity?
More layoffs in the future?
Where's my parachute?
Well it didn't take long to find it.
"Gross domestic product contracted at a 3.8 percent annual pace from October through December, the most since 1982, the Commerce Department said today in Washington. A gain in stockpiles contributed 1.3 percentage points to growth,"
Because as we know inventory growth is the pipeline pushing too much forward to end consumption. Call it -5.1%. Estimators were correct.
Nostrovia,
DOW + 500!
"usinesses added $6.2 billion to their inventories after cutting them by $29.6 billion in the third quarter. The change in inventories added 1.32 percentage points to growth."
Are these cars nobody will buy?
If exports fell by more than imports how can the trade deficit be narrowing?
Good morning Haloscan. It's a pleasure to find you as finicky and cranky as is your wont this day.
Nostrovia,
Inventory is growth.
That is almost like me writing myself a check for $200 Billion. And then walking around saying I'm now worth $200 Billion.
Yeah, I'm worth $200 Billion.
Better than expected...?
sneaky calculations it seems
"If exports fell by more than imports how can the trade deficit be narrowing?"
New math.
Nostrovia,
yogi: because of the trade deficit. The percentage decline in exports is bigger than the one in imports but the absolute difference between imports and exports declined. I think.
Let's not let details get in the way of a great number.
1 currency sooner [yogi](Unrated) writes:
\tIf exports fell by more than imports how can the trade deficit be narrowing?
1 currency sooner [yogi] | 01.30.09 - 8:45 am | #
The trade deficit is calculated using absolute numbers, but you are comparing percentages, i.e. a 15.7% drop in a big number is larger in magnitude than a 19.7% drop in a smaller number. Thus the gap narrows. Just a guess.
It balances out: consumption is production. Non-consumption is growth.
Let's all build things that no one wants. And then lets stockpile them in our closets or around our waists as fat. Then count call the excess crap as growth.
No! We do that already?! Get outta here.
BS number - services the largest component of consumption is UP 1.7% - come ojn. Private invenstories added 1.3 percen. Make the numbers relaistivc and that is your 6%p plus down. Govt spending up 20% is great. very healthy. Krugmahn must be wetting himself.
Comrade Misean is Dope ,
You made my point even more clearer. It is demands and wishes (example- to drive and buy groceries) aka consumption that make it seem real. We have to preserve jobs and discretionary income of average people and not obsess over stocks, returns and economic indicators because they are all meaningless without a functional free society.
//Perhaps. But my car is real. And it takes a small legion to build it. And I am quite sure my dinner last night was real, as I am not starving right now...and another small legion brought to my grocer the raw ingredients for said meal.
Mal investments exist and can be expanded by gov't, but there is always a real core.//
who is weeping for theit puts? DOW +500
Oh come on! We all wanted nasty number. Man, I am bummed.
How much later revision occurs with these quarterly GDP numbers? Are they as bad as the monthly employment numbers?
This will be revised upward in February. The inventory number is a little scary because businesses were definitely cutting back on their inventory, but just not fast enough, so there was a net gain.
The single biggest obstacle in the path of a large country becoming a superpower is a lack of willingness to consume beyond their "means". Sounds counterintuitive, but it is true.
"If exports fell by more than imports how can the trade deficit be narrowing?"
"Shut up!" he explained.
ill dilettante,
This is the advance number. Then we get the preliminary number, then the final. And maybe they revise it again after the final.
Guys I'm going nuts buying stocks at the open this morning.
This news is just so unexpected awesome. I can't stop myself.
Unless chinese or indians start consuming more (creating more internal jobs + economy + infrastructural demands) they will never achieve their potential. Frugality above a certain limit is the biggest obstacle to sustained high levels of employment.
I wonder if a GM automobile made in China still counts towards US GDP numbers.
What does the soon to be revised numbers bring?
GE up 1% already before the open.
So is there any merit to the " Wolfe waves" in technical analysis that helps explain the counterintuitive moves in the market averages ?
Also how does a $6.2 billion increase in inventories contribute to a 1.3% increase in the quarterly number? This implies that the total US economy is only a 1.9 trillion dollars???
ill dilettante writes:
Also how does a $6.2 billion increase in inventories contribute to a 1.3% increase in the quarterly number? This implies that the total US economy is only a 1.9 trillion dollars???
The magic of phony numbers
I mean hell, it is the end of the month. Time to make my client reports look better.
If the preliminary GDP growth without 'adjustments' is -5.1%, what will the final GDP contraction look like?
ill dilettante(Unrated) writes:
Also how does a $6.2 billion increase in inventories contribute to a 1.3% increase in the quarterly number? This implies that the total US economy is only a 1.9 trillion dollars???
The person who composes the report and the person who audits it for factual veracity are employed by the same government propaganda agency.
better than expected right?
Shhhhh... Don't insult our naked emperor!
//Also how does a $6.2 billion increase in inventories contribute to a 1.3% increase in the quarterly number? This implies that the total US economy is only a 1.9 trillion dollars???//
Are the bailout programs counted toward government spending? If not, someone should get to changing it real quick. GDP might be positive by the final number!
Also how does a $6.2 billion increase in inventories contribute to a 1.3% increase in the quarterly number? This implies that the total US economy is only a 1.9 trillion dollars???
The 1.3% is an extrapolated annual rate.
Citizen Scotto writes:
better than expected right?
Citizen Scotto | 01.30.09 - 9:02 am | _________________
Yes, and we're pretty pissed about it!
ac,
"Guys I'm going nuts buying stocks at the open this morning."
I'm experiencing the winter of 1945 myself. I'm sticking with McAuliffe...Nuts!
Nostrovia,
Comrade Byzantine_Ruins writes:
The person who composes the report and the person who audits it for factual veracity are employed by the same government propaganda agency.
You could expect no less, it is governments job to protect it's people, false data prevents a further contraction in GDP and then of course deficit spending increases GDP.
Beat expectations.
Woo.
Hoo.
Ahh, there's the ticket...get the gubermint to stock up!!!!
Also how does a $6.2 billion increase in inventories contribute to a 1.3% increase in the quarterly number? This implies that the total US economy is only 1.9 trillion dollars???
The 1.3% is an extrapolated annual rate.
JustAnEngineer | 01.30.09 - 9:03 am |
I already divided the 1.32% by 4
Boy this has got rally written all over it.
Not bad is the new good, according to CNBC...
So we don't need a massive stimulus, or a bank give away?
Does this make any sense to anyone - quoting from the BAE release
"The real change in private inventories added 1.32 percentage points to the fourth-quarter change in real GDP after adding 0.84 percentage point to the third-quarter change. Private businesses increased inventories $6.2 billion in the fourth quarter, following a decrease of $29.6 billion in the third quarter and a decrease of $50.6 billion in the second.
Real final sales of domestic product -- GDP less change in private inventories -- decreased 5.1
percent in the fourth quarter, compared with a decrease of 1.3 percent in the third."
Q4 with Christmas sales and still -3.8/-5.1 aka that was the SHTF event. Q1/09 is going to be CFIT (Controlled Flight Into Terrain) and Q2 will be FEMA time!
Interesting short video with Stiglitz over at CNN Money right now.
I wonder how much that 6.2b of inventory will have to be marked down before it leaves store shelves?
Or more to the point, can retail absorb another 6.2b in losses?
So all those new cars pictured sitting in the storage lots at major ports are a positive thing after all? At least they are in this accounting.
This is double plus good!
Is the inventory value calculated at mark-to-model or mark-to-market?
Never thought I'd live in a world where the worst GDP in 26 years would (in my humble opinion) rally the markets.
Can't the accounting just adjust from FIFO to LIFO or average cost, to modify the value of current inventories and produce the desired numbers ? So the value of any increase in inventory is really unknown without knowing method used to book it ?
The conservative think tank took all my thoughts.
Now my skull is empty.
mp
The government should buy Chinese bonds so that the Chinese can buy that excess inventory.
CR, the entire excerpt is in hypertext. Perhaps a forgotten unclosed tag somewhere.
What I'm trying to wrap my head around is that we were supposed to be operating lean/mean with Just in Time inventory.
If that's the case, then the only reason that the inventory built is because nobody was buying it.
i.e. the toilet's plugging up again.
CNBC talking shit heads think it is anti-business to take back Wall Street bonuses. Oh boy, it should be treason to keep them. Those turds made this mess!
Can't the accounting just adjust from FIFO to LIFO or average cost, to modify the value of current inventories and produce the desired numbers ? So the value of any increase in inventory is really unknown without knowing method used to book it ?
10,000 Mosquitos
Yep...and the final decider is what you can actually sell it for.
Markets to rally on good news.
GDP is just an acronym. "3.8" is just a friggin number. The reality is, Hooters has great wings.
We'll certainly see a rally today, maybe a big one.
It's all just setting things up for a bigger fall.
i.e. the toilet's plugging up again.
homedad43
Was just thinking the same thing. with all the cutting, I'm guessing that people bought stuff they would really use, leaving lots of CRAP sitting on the shelves. Crap that no one would buy unless they had throw-away $$.
Just talking retail here.
I have taken a look at the tech note that underpins this data and the BEA included a large extrapolated increase in aircraft shipments from $14.3 billion in November to $39.6 billion in December. Does anyone here know what the actual delivery numbers were?
[Investments in equipment and software dropped 27.8%, the weakest in 50 years]
INTC UP premkt. Can I haz a bottom call ?
Stock futures rise as investors sniff steaming pile of gov'ment data....
Treasury yields up
I took a dump in the 4th quarter. I am sure that was counted too.
Should be an exciting day in the casino.
OMFG- Read Denniger about the market.....
We're almost there.
How can so many economists get the GDP number wrong? Oh, wait... I think I just answered my question.
3Q = 30bn in inventory cuts.
4Q = 6bn in inventory build.
Gotta agree with Homedad.
The decline is outpacing even the keystroke-era speed and which people can step down operations.
they roll the chicken bones,
poke the entrails,
take Viagra, to await Second Coming
The single biggest obstacle in the path of a large country becoming a superpower is a lack of willingness to consume beyond their "means". Sounds counterintuitive, but it is true.
lucifer | 01.30.09 - 8:54 am | #
LOL. Straight from the mouth of beelzebub himself
The decline is outpacing even the keystroke-era speed and which people can step down operations.
Comrade Byzantine_Ruins
CBR, I've commented before on this. When things go south in a hurry, one simply can't cut fast enough. I've personally experienced this. Sooner or later you just pack up the tent.
You just nailed it.
3Q = 30bn in inventory cuts.
4Q = 6bn in inventory build.
Depression is clearly over. Market to rally. Dow 11K, here we come!
Have we hit Peak Crash yet?
CNBC talking shit heads think it is anti-business to take back Wall Street bonuses. Oh boy, it should be treason to keep them. Those turds made this mess!
Johnny Mustardseed | 01.30.09 - 9:15 am |
Ratigan was on Morning Joe this morning talking about RICO and fraud cases should be investigated.
This was in response to Obama's slapdown yesterday.
Don't forget the -.1% adjustment for "inflation". A dubious number...
got gold!
This whole hand waving of "better than expected" for stocks and economic numbers and "worse than expected" for commodities is a psychological magic trick.
Who cares?
If the forecasters are always wrong, shouldn't we be casting a critical eye on the consistent "expertise" of the forecasters?
Instead, shouldn't the numbers be examined in relationship to their previous performance.
then a 40% drop in profits would be exactly that, and not "better than expected".
then, things could be evaluated on reality, then...oh, forget it...we all know why its done
visions and revisions
CNBC talking shit heads think it is anti-business to take back Wall Street bonuses.
Johnny Mustardseed | 01.30.09 - 9:15 am | #
It would be anti-business NOT to take them back.
Bonuses need to be awarded for performance, and taking Billions from Uncle Sam because you ran your company into the ground is not the kind of performance that needs rewarding.
Ratigan was on Morning Joe this morning talking about RICO and fraud cases should be investigated.
This was in response to Obama's slapdown yesterday.
Comrade Tech Sargent Chen
Where's Elliot Ness?
xxxxxx if Denningers triangle shows S&P possibly hitting 200 bottom or going up to 950.... will the VIX even be useful to measure market sentiment ? I'm sure some gutsy traders will have a lot of fun in that kind of environment, unless they get wiped out on wrong trades ?
OMFG- Read Denniger about the market.....
We're almost there.
I wonder if Denniger is writing from his tin-foil lined fallout shelter.
moral hazard ceased to exist when Spitzer was accused
FT.com | Willem Buiter's Maverecon | The ‘Good Bank’ Solution
If you have not read this one you should. Excellent take on what to do.
OMFG- Read Denniger about the market.....
We're almost there.
xxxxx | 01.30.09 - 9:24 am | #
Wow...that's the first public call I've seen that's in the neighborhood of my 150 bottom estimate. Except that he seems to be saying it's just the bottom of the next leg down.
Wow, look at the 10yr T-Bond fall...
This all seems too well orchestrated. Looks like Mr.Market lives again, at least till Monday
re: bonuses.
If the stupid, stupid gov't and stupid, stupid politicians had not given these banks $350 B dollars, money that everyone on the face of the planet (minus the recipients)told them would be squandered, this wouldn't have happened.
There wouldn't have been money to distribute. Christ almighty, common sense is about as common as accurate gov't data.
If you don't want people to profit from bad business, DON'T GIVE THEM A BUNCH OF MONEY.
And for gods sake, don't now give them more!! Our collective memory is down to that of a gnat at this point.
We deserve all of this.
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Hi All
Looks like the world is still here this morning, though the economy is deflating.
Excess inventory in the face of falling demand . . . deflationary? Falling prices? Don't buy today what you can buy tomorrow and the day after for less and less?
The only way to curb abuse among bankers taking taxpayer money is to trot out some big name abusers in handcuffs. It can surely be done. There's bound to be reasonable cause under some law or another.
What this number screams is that industrial production in the US from a headline perspective is about to tank. Around the world we are seeing a 15-20% Y|YY declines. here we are down 7% and inventories in yesterdays durable goods report are at a record high since series was started. Autos looking for a tax credit per WSJ and the prop machine is saying innovation will die if auto isn't helped. It gets more surreal by the day.
The piece by Buiter on a bank solution referenced above by Robert is very good. It's a much more detailed plan for the idea common here of using the rescue money to start new banks which can make essential loans, allowing the old banks to be unwound and shut down properly. It's efficient (government expenditures go to the real economy) and fair (minimal moral hazard).
OMFG- Read Denniger about the market.....
We're almost there.
xxxxx | 01.30.09 - 9:24 am | #
It appears Denninger may have lost his marbles.
Here's a good relatively brief description of GDI vs. GDP (better than Wiki IMO):
AmosWEB is Economics: Encyclonomic WEB*pedia
What I want to know is who bought the GS straight bond offering. Talk about coordinated this has to be coordinated stunt a la the WFC dividend raise. Is there a way to see via DTC who owns the GS bonds that were just sold without the FDIC umbrella?
S(Unrated) writes:
What this number screams is that industrial production in the US from a headline perspective is about to tank.
To put it mildly. What will be really bad is the service sector / discretionary collapse. Sharper Image, Starbucks. Next come chotchke candle stores and stationers. Then teen fashion and new video games / consumer electronics.
It's funny to talk about the money to be made shorting GGP or Simon to the icy claws of debt that even now reach out for it. It's still gonna be a whole lotta hurting when all those agorae are shuttered.
CR commenters have the best humor on the web!
"It appears Denninger may have lost his marbles."
I really don't know, Can you really predict the market by the triangle you draw on a chart?
katiebird(Unrated) writes:
I really don't know, Can you really predict the market by the triangle you draw on a chart?
Two words: "inverted hammer".
"It appears Denninger may have lost his
marbles."
If he has, we'll know about it in days, a few weeks at most. He's not predicting that the sun will go out in 2012.
I like immediately falsifiable warnings.
....hmmmmm......gold is way up......
Any experts on this board believe Government's figure of -3.8% more than the consensus figure of -5.4% (considering Government's more-or-less arbitrary(?) corrections for in(de)flation etc)
Accentuate the positive(negative), elimintate the negative(positive) and don't mess with mister in between.
Isn't life simple. No unbiased economic analysis here.
Two words: "inverted hammer".
Don't forget the "triple candlestick". That didn't work out so well.
"Where's Elliot Ness?"
I think he does private work now for Goldman Sachs.
SRS is having a good day. Anyone know why?
.....we're still broke at -3.8% except for the 8-pennies, 3-nickels, 5-dimes, & 4-quarters in our couch.....
Hapsburger, could be because the market is tanking as a whole. Also, increased inventories might mean that people are buying less crap. Less crap bought means less places needed to sell said crap meaning empty malls, less office space, lower rents, and less space needed to store the crap. All these things that SPG, VNO, PSA are making their money off of.
okay, it stunk, my 11 mo old daughter knew 4Q GDP would smell like her diaper, the next big, meaty question is how many Qs of neg GDP will we have? 3? 5? 8? 179?
"The piece by Buiter on a bank solution referenced above by Robert is very good."
Yes, a good piece FairEcon, but our government has shown absolutely no ability for fiscal constraint, good judgement, or forward thinking (REGARDLESS which side of the aisle they're parked on) and ALL had to have been undertaken immediately - 4-years ago.
okay, it stunk, my 11 mo old daughter knew 4Q GDP would smell like her diaper, the next big, meaty question is how many Qs of neg GDP will we have? 3? 5? 8? 179?
ok Ken Cooper, what is going on with this CR add on thing and haloscan?...it's ghost pos
SRS- spg cut dividend to 90% stock today...
...halo-scan is trying to move 1.7% of comments forward into 1Q09 as well
Bank Closing, Fining, Warning Friday
just out -
\t
FDIC Enforcement Decisions and Orders
FDIC: Enforcement Decisions and Orders - Recent Orders and Decisions
......a mighty big list of banks.....
"We really appreciate our union brothers' willingness and sacrifice to work with us as we restructure our business for long-term growth," - Joseph L. Hudson, Hudson Motor Car Co.
More Gov't B.S.......When will they EVER admit truth and fact? Down 7-8% are still considered conservative calculations....Sheeesshhhhh.
"the government counts an unwanted buildup of goods on store shelves as growth"
Just out of curiosity, which "government" is doing this counting, Bush's, or Obama's? If this shit-shining is continuing under Obama, that's not change I can believe in, and I voted for the guy. Not that I'm surprised.
Miss Dow ain't buying this baloney. Down 90 pts.
DOW 36000 writes:
How can so many economists get the GDP number wrong?
How many bankers does it take to destroy an economy? ...Just one if he writes a QUADRILLION in derivatives.
Never thought I'd live in a world where the worst GDP in 26 years would (in my humble opinion) rally the markets.
"Financial advisors," and other stock jobbers get bonuses whether they make money for their customers or not. They are like congress. When in session your wealth is never safe.
In 2012 I am looking forward to buying a new, never driven, 2008 GM pickup truck for $500.00
It'll need an oil change and new tires before it leaves the lot, but that'll be included in the purchase price.
It appears Denninger may have lost his marbles.
RockyR | 01.30.09 - 9:43 am | #
That's been readily apparent from his various inverctive filled rantings over recent months. However, that doesn't necessarily invalidate his predictions. He's been right about of lot of stuff.
It'll need an oil change and new tires before it leaves the lot, but that'll be included in the purchase price.
kidbuck | 01.30.09 - 11:15 am | #
Don't forget that all of the rubber bushings and the tires will be rotted out as well. Don't be a sucker.
Uh-oh! looks like I'm the only one here.
It appears Denninger may have lost his marbles.
RockyR | 01.30.09 - 9:43 am | #
Really? How so?
xxxxx
fyi looks like a lot of folks have migrated to this since i've been gone-
Mibbit IRC client widget
Manufacturing new debt doesn't show up in the GDP figures. Otherwise, things would look just fine.
How can so many economists get the GDP number wrong?
Because people want to panic and focus on bad shot like gloom and doom, versus seeing the worst has passed!
Stocks headed back up!
I'm kind of confused. The headlines (about half of them) say the economy shrank by 3.8%, and the other half say it shrank by a 3.8% "pace."
If the economy shrank 3.8% in real dollars vs Q3, that would be about a $550 billion shrinkage. Or did it shrink less than that? Is it tecnnically accurate to be saying the economy shrank by 3.8% in Q4?
Building inventories?
Excess capacity?
More layoffs in the future?
grim | 01.30.09 - 8:44 am | #
If it hasn't already been said...
Yes, yes, yes.
These numbers are absolutely bunk. Consumer spending decreased by only 3.5% (LESS than 3Q!), but:
Durable goods: -22.4%
Non-durable goods: -7.1%
Services: +1.7%
Does anyone really believe, than in the midst of a major economic crisis with massive job losses and a lack of certainty and confidence, that Americans increased their spending on services by 1.7%? Are services really that large a contingent of consumer spending that a simple 1.7% increase will almost completely negate -22.4 and -7.1 percents in spending on goods?
ALSO:
Can anyone tell me how this works?
3Q Inventories: -29.6 Billion : +0.84% GDP
4Q Inventories: +6.2 Billion : +1.32% GDP
So inventories increase GDP regardless if they go up or down? Very suspicious...
"Real personal consumption expenditures decreased 3.5 percent in the fourth quarter, compared with a decrease of 3.8 percent in the third. Durable goods decreased 22.4 percent, compared with a decrease of 14.8 percent. Nondurable goods decreased 7.1 percent, the same as in the third. Services expenditures increased 1.7 percent, in contrast to a decrease of 0.1 percent."
into this:
"Consumer spending, considered an engine of economic growth, fell 3.5% in the fourth quarter, as opposed to a 3.8% drop in the third quarter.
In particular, there was a 22.4% drop in consumer spending on durable goods during the December quarter, as well as a 7.1% drop in nondurable goods, the biggest drop since 1950. Spending on services rose 1.7%.
man haloscan is screwy sometimes....ignore the 2nd half of my comment