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Two crucial months for US economy

business.timesonline.co.uk — I am probably the only economist left in the world who still believes that an American recession is likely to be avoided

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  • mcquitty, on 05/21/2008, -12/+40Well, there are a lot of things that can cause or avoid a recession. I think we may still have a little left in the housing market. I think there may be issues with other areas, but unemployment figures are still good. The market is more selective on candidates, making it slightly in the favor of employers (at least in the tech sector, right now), but it will cause the weaker candidates to step up or move on.

    I personally think we may have a soft landing, with a slight dip but not into a recession. It largely depends on the rhetoric. Everyone has been saying recession, but it hasn't happened yet. That's a good sign of some resiliency in the market. People just need to treat a house like a house and not a credit card. Those in for the long haul have little to worry about. Mr. Buffet once lost a billion dollars on an investment only to wait it out and make it all back and then some. Those who fret about the value of the house while buying it shouldn't worry so long as they can afford it. Those that bought as investments have other issues. Investments can make or lose money, no sympathy from me.

    Gas prices are eating into disposable income. Perhaps we will see a shift in where dollars are spent, with less frivolous spending and more on durable goods. If the dollar remains low, it does bode well for exports, which will help the economy. It also means we may see tourism as it becomes cheaper to vacation here.

    I think the election will be telling. Both candidates will try to play down the economy trying to use that to their advantage. All that "news" may actually hurt the economy and become a self fulfilling prophecy.

    • Croecop, on 05/21/2008, -21/+1omg so long, blah blah
      • thcobbs, on 05/21/2008, -3/+7Too bad for you that mcquitty is actually dead on.
      • JavertHolmes, on 05/21/2008, -3/+4Please, please, please, continue to not read posts like this. I hope to benefit from your ignorance at some point in the future.
      • santaliqueur, on 05/21/2008, -0/+2Too stupid for school? It shows.
    • robbiemuffin, on 05/21/2008, -4/+3I think housing is just a radical way to sneak socialism in the backdoor... get the politicians working to help the average joe since we have to use such a cut throat system to appease all the chicago gamers. ;)

      The real problems are: 1 if a real bank actually fails ... which you can bet we'd kill a few million arabs before that happens, or 2 if the price of oil goes much above 180 or stays over 150 for more than a quarter... which , again, won't happen unless we kill all the arabs first.

      I know that's a terribly inflammatory way to write it, but the thing is we are actually pushing our systems very close to real thresholds... so I have to inject some sarcastic humor in there.
    • insanebrain, on 05/21/2008, -5/+1- "I think we may still have a little left in the housing market. "
      - "I think there may be issues with other areas, but unemployment figures are still good."
      - "I personally think we may have a soft landing, ...."
      - "I think the election will be telling"

      You think to much. Stop thinking and start living in the REAL world.
      • TubaTechno, on 05/21/2008, -0/+3YOU TELL HIM!! There is no place for "thinking" in the REAL world!
    • makenshin, on 05/21/2008, -1/+1I think Obama has been the only candidate to show he is willing to talk about the economy (maybe Ron Paul too, but you can't really call him a candidate much anymore, more of a movement). That aside though.
      I really think we need more news like this. A recession is clearly avoidable, I've known it before this article, just we need more good news like this to be spread to strengthen consumer and investor confidence. After all, most of this is in response to a confidence drop (though rising gas prices are not helping the issue much. Of course the housing issue still plays into it, but if the banks worked with the people who are in a mess and tried to find a way to help them avoid foreclosure, then maybe there would be fewer foreclosures and a rise in confidence (even if they are only able to avoid 10 or 20% of foreclosures, it's a huge improvement).
      • mcquitty, on 05/21/2008, -0/+1The banks have a big issue with renegotiating contracts. It deals with Sarbanes-Oxley. It has to deal with a contract being written up and how it will affect the balance sheet and income statement.

        There's a lot of work that must be done and changing the rules as written in a contract is not easy. There is some latitude, but it cannot have a significant impact on the contract. If you modify a large number of contracts, then it has a material affect.

        I work with sales people and the amount of paperwork is astounding. If you do something that goes against SOX, you can be held criminally liable. Thank Enron and Worldcom for that piece of legislation.

        In many cases, the banks are held in the same handcuffs the owners are.
  • anonymiau, on 05/21/2008, -15/+35Tax rebates? When foreign debt combined with government overspending is the core problem, and that problem doesn't seem to get solved anytime soon, this dude thinks it will all be well if American consumers spend more money to feed the broken government and their broken policies? No wonder he, by his own words, is the only one who believes that crap. .
    • heliox, on 05/21/2008, -2/+5Yeah..he and he alone came up with this plan. I heard he is even witting the checks himself.
      • robbiemuffin, on 05/21/2008, -3/+3plan ... by plan, do you mean, description? because he doesn't mention a plan anywhere. by description, yes, he said he is probably the only one ... a lot of what he wrote is at least half true though, so there's a lot of wiggle room and he -shouldn't- be alone... except he adopted this at the beginning of the article:
        So does Friday's 80,000 employment decline mean that the US is in recession? And does it matter anyway whether the technical definition of a recession is or is not satisfied? The answer to the first question is No and the answer to the second is Yes.
        --Which is utter crap. The "technical definition" of a recession _to an economist_ is immediate, not long term. And it's not something you'd be confused about if you had gotten through economics 101, as long as you still remembered it. The "technical definition" to the public is what the government uses, which is the 2 quarters thing. It's like a mathematician going around saying pi = 3 ... because in the state that he lives in, the legilature has defined it that way.

        So te reason his argument stands out? It's because he`'s making up his terms.
      • lead2thehead, on 05/21/2008, -0/+1EXACTLY. Bush gets all of the blame while every senator and congressman - the people who voted this plan into law - get a free pass.
    • lead2thehead, on 05/21/2008, -12/+5Don't think of it as a tax rebate. Think of it as the federal government giving you your money back because they did such a ***** job.
    • trixterIreland, on 05/21/2008, -4/+7the last large jump in the ecomony was when bush gave a tax cut, the largest one before that was when it happened during his fathers term.

      Raising taxes does not help the economy, infact its putting money into it that helps it grow, creates jobs, etc. This is why it works. When you buy products/services from a company, it gives that company some money, they can then buy products/services from toher companies and/or hire some new employees. This causes even more money to go around, and better economic health.

      Its been proven multiple times, and really is basic economics.
      • TheGuruStud, on 05/21/2008, -3/+5Really? So, Clinton's taxation hurt the economy? Idk what ***** planet you're on. Bush Sr had us going down the hole and Clinton brought us back (not saying he was perfect, but a ***** saint compared to any recent presidents). Now, we're already in the hole and probably aren't escaping. Any further in and we're going to hit the event horizon of depression. It's just a matter of time with criminals running this country.
        • justinx0r, on 05/21/2008, -1/+5Clinton cut a lot of different taxes, actually.
        • bjornski, on 05/21/2008, -3/+2Not if you ask Republicans, he didn't.

          These are the same people that say that Poppy Bush and Reagan didn't raise taxes either.
        • TubaTechno, on 05/21/2008, -1/+4You guys are forgetting the fact that Republicans had majority of congress since 1994. Thats 6 out of 8 years Clinton was in office. Do you realize that Presidents don't really make laws? (well, except for Clinton's signing statements.....) And all budget and spending bills come from the House Ways and Means?

          You seriously give these presidents more credit then they're due...
      • jmpeagle, on 05/21/2008, -2/+3Bush sr. raised taxes
        • TubaTechno, on 05/21/2008, -1/+3Bush Jr. lowered; at least by 2% for middle income. Of course this gave the government record setting revenue from income taxes....but you won't be hearing that from the media anytime soon...
  • Treoinmypocket, on 05/21/2008, -7/+19No you aren't. You are one of a growing majority who have been ignored by the media and who are now being recognized simply because - rightly - the stormcrows are ever harder to find.
  • D4M4N, on 05/21/2008, -11/+24Actually the majority of well educated economists understand that this country is not in a recession and don't bieleve everything they hear from the media.

    if anyone really wants to discuss this with me in a well mannered way feel free to reply to comment
    • inspron, on 05/21/2008, -13/+6I guess you took a poll of all the well educated economists? Your statement is as factual as the media you're trying to bash.

      Calling those economists that have the same point of view as yours "majority of well educated economists" isnt bias?
      • maci01, on 05/21/2008, -3/+1It depends on who he considers is well educated.
        • exomni, on 05/21/2008, -4/+6No educated scotsman... err... I mean economist... would say we're in a recession.
    • legendtuner, on 05/21/2008, -1/+9I don't know about economists. I really don't. I'm not bashing.

      But I do agree how the media ran with the recession story. I'm surprised how few people here on digg mention that the article is from April 7th. Before the 1st quarter GDP was posted and by definition we're not currently in a recession. Amazing how a month and a 1/2 old article got to the front page when data has already been presented to prove (or disprove it in some cases) the article.
    • trixterIreland, on 05/21/2008, -2/+11A recession is clearly defined. It requires 2 consecutive quarters of negative growth. It does not mean "times are hard" nor does it mean "I cant live like I used to be able to".

      So the statement originally made "majority of well educated economists understand that this country is not in a recession" is actually true, anyone that does think that we are in a recession is not a qualified economist since we havent met the criteria for that word to be used. If they claim that we are currently in one they are wrong and you probably should avoid getting financial advice from them in the future.
      • TheGuruStud, on 05/21/2008, -4/+4and I guess the dollar being worth a fraction of what it was isn't a symptom.... Ok, break out some more kool-aid, I guess.
        • TubaTechno, on 05/21/2008, -0/+3Well, i guess if you're just looking at one factor....then yes, you could make the assumption that we're in a recession based on the the dollar's value. But then again, you would flunk Economics 101.
      • bjornski, on 05/21/2008, -2/+4As long as we keep ***** with the numbers, bailing out banks, propping up profit margins, and protecting certain corporations, we can avoid the "textbook" definition of a recession pretty much forever.

        Hey, the economy is doing GREAT! (as long as you don't count job numbers and energy, food and costs of living). IT'S AWESOME! Look at the GDP!

        To say that since we haven't reached that exact definition that we aren't in a recession is disingenuous, at best.
    • D4M4N, on 05/21/2008, -3/+5TrixterIreland hit the nail right on the head, with what i meant. Im surprised that some of you actually don't know what the definition of a recession is. Also for those who want to argue that GDP doesn't reflect inflation, it actually does.
      • bjornski, on 05/21/2008, -2/+2The GDP doesn't mean ***** when 80% of it is all pooled up in a few hands.
      • StingingNettle, on 05/21/2008, -0/+4There is real GDP, and nominal GDP. Real GDP takes into account inflation, and nominal does not.

        Its better to use real GDP for obvious reasons.
    • umdigger, on 05/21/2008, -1/+1When we are given false information then it's hard to sift through what is BS and what is real. I don't begin to say I'm all knowing when it comes to economics, but I do know more than most. Take a look at this article and let me know what you think of it.

      http://www.minyanville.com/articles/GDP-Fed-econom ...
  • phogasmic, on 05/21/2008, -16/+6we may not be in a "official" recession, but given the devastation to communities and the layoffs, and rising gas prices, I think the effect on American families is reminiscent of the deep Recession in the late 70's, and could get as potentially bad as the Depression.
    • thatsmyaibo, on 05/21/2008, -6/+7Digg (the Obama capital of the world) fails to realize that their candidate plans on raising taxes. For those that don't know, raising taxes in an economy like this is just asking for a recession.
      • bjornski, on 05/21/2008, -5/+3Yeah, because it's better to "borrow and spend", and just keep racking up that debt.

        $400 billion PER YEAR in interest on that.

        But no. Let's not pay it down. Let's ADD TO IT!

        You people are ***** morons. Do you pay your mortgage with a credit card too?
        • thatsmyaibo, on 05/21/2008, -1/+6We have much bigger problems than not being taxed enough. You take more money from people right now and we will be in a recession. Illegal immigrants cost the US nearly 300billion dollars annually and you want to tell me I should have my paycheck deducted further than it already is? I barely take home half of what I work my ass off for then have to pay 8.25% on everything I buy in CA. No, I didn't buy my house with a credit card. In fact I am smart and bought my house in a low market for 250k and it is now worth 800k. If you want to get into fiscal debates about the economy, be my guest but I will not support anyone who wants to take more of my money and put it into programs that don't benefit me or the economy. If you think Obama's taxation will pay back the war then you need to open your eyes.
        • vault, on 05/21/2008, -1/+5It isn't better to constantly borrow and spend either, but this is nothing like personal finance. If the government racks up debt and the GDP grows, that's fine and the debt to GDP ratio gets smaller. Think about it like this...if you rack up credit card debt, that won't cause your salary to increase by itself. You also can't issue bonds at rates substantially below the rate credit card companies or banks change for mortgages, nor can you control the size of the money supply. The government can.

          It's completely different and no one expects us to actually pay down the principal in full. Westernized countries have debt and need to have it. We have no problem making the interest payments every year.

          A lot of people look at the national debt and think about it in terms of their own debt when the analogy doesn't work at all.
        • bjornski, on 05/22/2008, -4/+1So, as long as corporate profits go up, as reflected by the GDP, it's just FINE to keep adding on to a debt that we can't afford to keep paying, because the more those companies make, the smaller the debt is in relation to it, even though those companies making thees windfalls are fighting tooth and tail to do everything they can to AVOID paying any of their "fair share" of the debt incurred to help them make their profits.

          Using nothing but corporate profits to determine the "health" of the economy is a ***** HORRIBLE way to measure the stability of the country.

          So sure, GDP is going up, on profits made by people in other countries. That doesn't help anyone in THIS country except the major stockholders in the profitable companies.

          Nobody else.
        • vault, on 05/22/2008, -0/+4bjornski...it's not my opinion on this, it's what you would've been taught had you taken econ in college. I used to think the same way you do.
      • siszam, on 05/21/2008, -6/+1How do you Bush loving morons think we are going to pay for his war and all the corporate welfare he has thrown around if we don't raise taxes? You think the money to care for the tens of thousands of newly disabled veterans will magically appear? This cycle happens over and over throughout history. Democrats come into office and have to pay down the deficit the outgoing Republicans left. Democrats have to help the least of us that Republicans abused and abandoned while in office.
        We currently have the biggest government and the highest deficit EVER thanks the Republican in the White House. Bush isn't even gone and you're already blaming others for his failures!
        • thatsmyaibo, on 05/21/2008, -0/+5Not a Bush fan and don't support the war (haven't since day 1). Read my reply to bjornski. It applies to you as well.
    • bc289, on 05/21/2008, -5/+8the depression was extremely bad, and we've never had another period like it. It's highly unlikely that we'll face another depression
    • D4M4N, on 05/21/2008, -2/+3The economic situation at the time of the depression was not anywhere close to what it is now.
  • lead2thehead, on 05/21/2008, -22/+8I've got news for you subby, the recession is already here. And I don't consider that to be a bad thing. Recessions correct imbalances in our economy... like the housing bubble.
    • TheFinaleofSeem, on 05/21/2008, -6/+10Look up recession and come back, idiot. We are NOT in a recession.
      • CamperBob, on 05/21/2008, -3/+0Yep. He only shows how cold he is, and dumb.
      • lead2thehead, on 05/21/2008, -2/+0re·ces·sion (rĭ-sĕsh'ən) n. - An extended decline in general business activity, typically two consecutive quarters of falling real gross national product.

        And we've have not two, but SIX consecutive quarters of declining GNP. The dollar has been losing ground, and every business owner you talk to will tell you that business is slow. How is that NOT a recession?
        • TheFinaleofSeem, on 05/21/2008, -0/+2WRONG! It was positive last quarter. Try looking it up next time.
  • ToadX, on 05/21/2008, -1/+44That article was from April 7, 2008, almost 2 months ago. So we're safe?
    • calantus, on 05/21/2008, -4/+5no
    • ironsam, on 05/21/2008, -3/+2.5 = 1 in your mind?
    • bosssmiley, on 05/21/2008, -1/+2Yes, you're safe. Anatole Kaletsky has been consistently wrong on every major economic movement all the way back to the Asian financial crisis of the late 90s and the dot com bust. He even wrote an article for The Times lampshading this around December 2006 ("What do I know? I'm an economist" or something similar).

      The man is the inverse miner's canary of the economic world: if he yelps that the sky is falling and then keels over coughing then things are fine; if he chirps merrily and says there's no foreseeable problem you should RUN LIKE HELL!
  • 533n, on 05/21/2008, -15/+7Clearly this economist is stupid. How can America avoid a recession when it has already begun. Not to mention the government has no money to pump into the economy.
    • onetimer, on 05/21/2008, -7/+14It's true. Those "college educated" economists don't know what they're talking about. I saw a documentary on the internet the other day (which was corroborated by someone on the Ron Paul forums) that told me we're actually going to enter in a super-recession-depression!! Start gathering food now, people!! Personally, i've already sold my house, quit my job, and am in the process of working on a cabin-fortress in montana so that when the US starts rounding up citizens for the FEMA camps, i'll be ready to stave off the NWO foot soldiers. Don't expect the "MSM" to tell you any of this, though. Thank god PATRIOTS like Alex Jones exist who would *never* lie to me...
      • 533n, on 05/21/2008, -6/+4Considering this economist even states he is one of the only economist to think this, would that imply that every other college educated economist is stupid? That this economist is the only smart one?
        • onetimer, on 05/21/2008, -4/+8You really thinking he *literally* meant that he was the only one? Have you ever heard of hyperbole?

          We're not in a recession, by definition. The media simply went with it as a "buzz issue" to try and generate ratings. Most economists agree.
        • 533n, on 05/21/2008, -6/+3You really think the US is not in a recession? I have 3 economics professors all with PhDs and they laugh at the notion that the US hasn't started a recession. You do realize that there is a cycle that lasts about 10 years. The last recession was in 2001, started in march. This recession is coming early due to the fact that the US has spent 100s of millions on a war generating no income.

          Open a book you dip *****, take a look at your housing market. Or the fact that the Canadian dollar is at par with the US dollar for the first time in decades. I wonder why dumb ass
        • onetimer, on 05/21/2008, -5/+6As convincing as these three anonymous Economists sound, I'm gonna stick with the technical definition of 2 quarters of negative growth, of which we've experienced zero.

          The fact that you cite the value of the dollar and housing market shows you know even less about what a recession is than what ignorance you initially displayed.

          PS: Childish name calling doesn't exactly help drive your point home, junior.
        • 533n, on 05/21/2008, -6/+3http://business.timesonline.co.uk/tol/business/ind ...

          You can stick to your text book definition, but realistically speaking the US is in a recession. Warren Buffett the world's third-richest man and top investor explains why. Since you won't look at common indicators such as the housing market or currency.
        • 533n, on 05/21/2008, -5/+3"Fifty-four percent of the CFOs that offered a prognosis in a Duke University/CFO Magazine survey of 475 CFOs said the U.S. is already in a recession. Another 24% said there's a high likelihood of a recession later this year. About 75% of them said they were "more pessimistic this quarter than in the prior quarter about the U.S. economy, reflecting concerns about consumer spending, turmoil in credit and housing markets, and high energy prices."

          http://www.wealthdaily.com/articles/america-in-rec ...

          You have to be blind to not see that the US has been operating at a deficit for years, has a faltering housing market, faltering dollar, rising inflation with no government aid available to increase consumer spending.
        • 533n, on 05/21/2008, -4/+3LOL digg down a quote and source from one of the richest and smartest men in America just because you realize you are wrong? With no rebuttal? Who's not helping their point now junior
        • onetimer, on 05/21/2008, -3/+4What rebuttal do I need to provide? You admitted we're not in a recession. I already won the debate. Everything else you just post is a strawman argument. People recognize this and is why I am getting dugg up and you are getting dugg down.
        • HumanCattle, on 05/21/2008, -3/+3You lose, 533n.

          onetimer has declared an Intellectual Checkmate. He is your digg superior.

          How many total diggs have you received today onetimer?

          Your Friend,
          HumanCattle.
      • inobla, on 05/21/2008, -2/+5And do the right thing onetimer... Dump most the money from your house straight into the Ron Paul campaign and buy as much merch from infowars.com as you can before you go! You know that's the best investment for your money, especially in an economy like this one!
      • onetimer, on 05/21/2008, -3/+5Oh, don't worry about that inobla. I actually sold a bunch of my gold bullion coin collection (the only REAL currency) just so I could max out my donations To Congressman Dr. Ronald Earnest Messiah Paul. In fact, I even donated in the name of patriots like Thomas Jefferson, Barry Goldwater, and Jefferson Davis (don't listen to those public schools who try an smear the south against the northern agressioners), as I don't recognize the authority of the IRS or the FEC. I even bought enough copies of "the manifesto" to mail to each and every member of congress!

        As for infowars, when I'm not handing out copies of Freedom2Facism that I bought, i'm on the Alex Jones website (using his "secure" ISP that he offers - I don't want to end up on some government terrorist list) to buy as many DVD's and T-shirts as possible. My garage was getting pretty full, but I now have enough DVD's to tuck under the windshield wipers of every parked car in town!

        It's going to be a tough move to Montana (especially hauling all of my gold bricks), but i'm confident it won't be as hard as sanding off my fingerprints.
    • thatsmyaibo, on 05/21/2008, -3/+8Yes...clearly. Please explain to me how you know more? Have you taken your economics class in Junior High yet? By definition, this is not a recession. The housing market is already bouncing back and things will be back to normal. We just need to get rid of the national now.
      • StillAnonymous, on 05/21/2008, -4/+2Housing market bouncing back to normal? Have you been reading real estate industry propaganda again? "There's never been a better time to buy! Or sell! Hell, you don't even have to do either, just give your money to us!"
        • 533n, on 05/21/2008, -5/+3Bouncing back? LMFAO omg you are an idiot. The US dollar is at par with the Canadian dollar for the first time in decades. The opportunity cost of the war in Iraq is 3 trillion. The last recession started march of '01 and this recession is coming early. I don't think you even know what a recession is or the fact that one occurs every 10 years. ***** idiot
        • thatsmyaibo, on 05/21/2008, -2/+4Um yes...bouncing back. All the foreclosed houses are selling again without the interest rates that are too good to be true. I did a google search and this is one of many articles that agree with me. Feel free to search "housing market" and limit it to articles from the past week. Then proceed to shut up about things you know nothing about.

          http://www.dailybreeze.com/ci_9282503
        • TheGuruStud, on 05/21/2008, -0/+4Interest rates that will rise and foreclosures will begin anew. They want to bankrupt everyone like mad.
    • TheFinaleofSeem, on 05/21/2008, -4/+7Perhaps you should look up the definition of a recession before saying we're in one.
  • RandoTheKing, on 05/21/2008, -10/+13Avoided? Yeah until those so called 'stimulus' checks are used up at Walmart.
    • onetimer, on 05/21/2008, -8/+10So, "Ron Paul 2008" (as listen as your name in your profile page), did you get your PhD in Economics from Harvard, UChicago, or Princeton?
    • bjornski, on 05/21/2008, -2/+4It's not going to Wal-Mart.

      It's either going to the banks, to pay off credit cards, or it's going to fill up the gas tank.

      That's all. This won't stimulate anything but profits for 2-3 sectors of the market and add to the debt.

      It's nothing more than an election-year bribe.
  • leapa, on 05/21/2008, -20/+15We're in a frigging recession now. How about we wake up and elect Ron Paul. Then we'll do away with these stupid financial bubbles that we are all merely puppets of, and the transfer of wealth can change the one way course it's on - from the middle class & poor directly to the extremely wealthy.
    • rizla420, on 05/21/2008, -0/+1I'm an RP supporter as well, but dont drink too much of the coolaid and think that he has a magic wand that will fix all the ills of government and society if he'd ever win. The stuff he'd want to do would be the beginning of the process. It would take a concerted effort by the PEOPLE to maintain the ideals and elect government officials on all levels that share that ideology.
  • z3r0c0O1, on 05/21/2008, -15/+14Recession: a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

    The USA is by definition already in a recession.
    • sadler121, on 05/21/2008, -7/+22The technical definition of a recession is two consecutive quarters of negative growth. The economy grew (all be it at small rate) last quarter. Therefore we are NOT in a recession.

      When we have two consecutive quarters of negative growth, then we will be in a recession, but we are not in a recession just cause the MSM says we are in a recession.
      • TheGuruStud, on 05/21/2008, -4/+4Outsourcing is not growing. Rich ppl getting richer is not growing (especially when the poor get poorer). The ***** definition and math is flawed.
        • TubaTechno, on 05/21/2008, -0/+2Damn economists and their years of learning......we common folk should come up with our own definition base on the way we feel how things are going instead of hard facts!!!
      • Ravatar, on 05/21/2008, -1/+4As someone said in another digg about the economy:

        Measure the growth against inflation.
      • Theycallmetak, on 05/21/2008, -2/+3You don't have to watch, listen to, or read anything in the mainstream to know that a buck's not a buck anymore. Just go grocery shopping.

        And it's albeit.
    • krazikamikaze, on 05/21/2008, -4/+14http://en.wikipedia.org/wiki/Recession

      "Recession is generally associated with a decline in a country's real gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year."

      http://www.bea.gov/newsreleases/national/gdp/gdpne ...

      "Real gross domestic product -- the output of goods and services produced by labor and property
      located in the United States -- increased at an annual rate of 0.6 percent in the first quarter of 2008,
      according to advance estimates released by the Bureau of Economic Analysis. In the fourth quarter, real
      GDP also increased 0.6 percent."

      So I guess you pulled that "fall in GDP" fact out of your ass?
      • bjornski, on 05/21/2008, -3/+2The GDP means jack *****, when the workers that are making that GDP possible are in another country.

        Or wait, I know! It'll "trickle down" at some point, right?

        I think I've heard this malarkey before.....
        • TubaTechno, on 05/21/2008, -1/+2Man, you sure are cynical. Which is probably blinding you to the fact that the Gross DOMESTIC Product is actually measures by the things made over in THIS country. Is America supposed to make EVERY car part, or mechanical do-hickee for EVERY product we output?
        • bjornski, on 05/22/2008, -1/+1No, they're things made by COMPANIES based in this country, even though their manufacturing base is in another one.

          Your "the GDP is awesome" arguments are like saying that a company is doing great because the CEO made bucketloads of money last year, even though the workers themselves all got pay-cuts to pay for it.

          As long as you only measure "profits", you get a pretty ***** reflection on the economic health of the nation.

          The world doesn't revolve around ONLY corporate profit, and that's all that's being measured.
    • TheFinaleofSeem, on 05/21/2008, -7/+3Wrong, idiot! The GDP was positive last quarter.
      • bjornski, on 05/21/2008, -3/+3And that means American wages and disposable income are up too then, right?
        • TheFinaleofSeem, on 05/21/2008, -1/+2No, it means that we are not in a recession. You claimed we're in a recession, and not just a recession, but a defined recession. You were full of it.
        • bjornski, on 05/22/2008, -2/+1As I've said elsewhere. As long as we keep ***** with the numbers, and bailing out companies that SHOULD have failed (keeping their profits UPUPUP instead of reflecting as they should), we can avoid the "textbook" definition of a recession pretty much forever.

          When you stop including things like fuel custs, costs of living, wages, etc into the equasion, SURE! The GDP is going "up", but it's NOT being spread out across the country.

          So basically, the companies in the US are making AWESOME profits. The "workers" here? Not so much so, in fact their pocketbooks are being torpedoed in order to keep that "high GDP".

          So get off this disingenuous ***** about "textbook" definitions, and realize that those definitions are written by, and supported by, people who are experiencing their "GDP increase" on the backs of everyone else in the nation.

          I know it's sure helping me!
        • TheFinaleofSeem, on 05/22/2008, -2/+2Things aren't too hot now, true. But next time, when you say we're BY DEFINITION IN A RECESSION, don't backpedal and gripe about who made the definition, because you were the one who used it.
    • MikeFallopian, on 05/21/2008, -2/+3You couldn't take the time to type "US economic growth" into your google search bar to verify that? Really?
    • kaelyiesta, on 05/21/2008, -2/+3This entire ***** debate over semantics is meaningless. What we should be asking is whether current federal policies(foreign and domestic) are making the economy worse off than it could be otherwise. Similarly, we should be asking who is becoming worse off by those same policies(we cant assume everyone profits or loses equally). There are a ton of factors that determine a nations economy. Just because it goes up doesn't mean things like the bridge to no where(http://en.wikipedia.org/wiki/Bridge_to_Nowhere) was a great idea. Just because it goes down doesn't mean giving taxpayers back a bit of their money via rebate was bad.

      I don't see a complete collapse happening, but that is not sufficient to prove that everything the federal government is doing right. This entire recession issue is an invalid way to argue for or against current policies. We have to show that the policies themselves are harmful or not.
  • RationalXubrnce, on 05/21/2008, -2/+16 All we can really do is prolong the inevitable troubles. Maybe 5, 10 even 20 years but our time will come. We operate a debt based monetary system which means we have to continually grow to keep the pyramid of debt fed. Since that's impossible our meltdown will occur one day as sure the sun will rise. The only real question is when.
    • insanebrain, on 05/21/2008, -0/+15, 10 ,20 years ??? WAKE THU ***** UP !! This year you mean.
      • RationalXubrnce, on 05/21/2008, -0/+2 I started believing that about 10 years ago and it hasn't happened yet. A sure way to look like a fool is to proclaim the meltdown is imminent. Then when it doesn't happen people dismiss you. You can go back to the 60's and hear people talking about our coming collapse. The meltdown is certain but the timeline is not.
  • taradisiac, on 05/21/2008, -10/+7Oh shut up, people have been talking about this for months and yet nothing happens.
    • RationalXubrnce, on 05/21/2008, -0/+3 Which is why I said it will take years.
    • Hangly, on 05/21/2008, -0/+6taradisiac, why do you suck so much?
    • umdigger, on 05/21/2008, -0/+1You must not have any market positions...
  • charliebucketts, on 05/21/2008, -10/+10The working class in the united states has been in a recession since the 1960s. Wake up people!

    The only thing that has ever brought wealth to the working class (including teachers and nurses) a strong labor movement. The politics of labor is always the left. Notice I didn't say "democrats".

    Peace,
    • Amadeus2490, on 05/21/2008, -2/+3Buried for the corny and overused "wake up people!" line.
  • waynechng, on 05/21/2008, -8/+10This "economist" is just plain stupid. His rationale is dependent on the $600 tax rebate to increase household holdings and boost disposable spending which will extend to buying houses again. $600 extra and people will buy houses? That's a dumbass justification. He's completely ignoring the prices of ordinary household goods which has increased between 10-20% in the past year. This guy is just a shill.
    • krazikamikaze, on 05/21/2008, -1/+3Fact check: Inflation is around 4% a year right now.

      http://inflationdata.com/inflation/inflation_rate/ ...

      Those numbers are year over year, so the CPI rose 4.28% from Jan 07 to Jan 08.

      As for the article, he is saying that the tax rebate will increase disposable income and consumption and therefore the GDP. As disposable income rises and house prices fall, houses will be irresistibly cheap (especially with low interest rates) increasing demand and hopefully slowing the drop in housing prices before it significantly depresses the rest of the economy.
      • waynechng, on 05/21/2008, -1/+2The CPI and Inflation rate as calculated by the government is plain *****. Just go to your local supermarket and look at the price of milk, eggs, fruit, vegetables.
        • maninblac1, on 05/21/2008, -1/+2waynechng, i 100% agree with you. But it's not *****, that's just what the definition of inflation is.
          Energy is the root of all of this. The root of the credit and house crisis. It always has been.
          Not once does the author of the article mention energy or gas.
          Oil and gas is how this country lives. And as energy costs get worse, those whom are now living on the edge will get sucked into a new credit and housing crisis. Late july, early august, the Dow will crash when Q2 earnings come in. This is the beginning of some very tough times.
      • Theycallmetak, on 05/21/2008, -0/+1I think what Wayne means is the CPI as the sole means of calculating inflation is ***** BECAUSE the core CPI excludes things like food, fuel, and certain taxes.
  • sonicularulus, on 05/21/2008, -8/+7I thought we were already in a recession...
    • jzuska, on 05/21/2008, -4/+9Wrong. It might be a downturn or a bad economy but a tecnical recession is 2 consecutive quarters of negative growth. We have not even hit one. Last one was positive. Slightly positive, but still on the + column.
    • Ravatar, on 05/21/2008, -0/+1Q3 2007 GDP was 4.9%
      Q4 2007 GDP was 0.6%
      Q1 2008 GDP was 0.6%

      As Warren Buffet recently said: "I would say, by any commonsense definition, we are in a recession."
  • madwh, on 05/21/2008, -3/+6Real Americans never fear economic crisis, economic crisis fears them.
  • jaxs1984, on 05/21/2008, -2/+4If we really are in a recession then we wouldn't be in Digg discussing it, we would be getting our "recession" on :)
  • brownrecluse888, on 05/21/2008, -8/+2Only one thing can fix this.....OBAMA!! Or at least some more Obama Spam on digg.......
  • brownrecluse888, on 05/21/2008, -12/+1Obama Spam!! Obama Spam!! Obama Spam!! Obama Spam!! Obama Spam!! Obama Spam!! Obama Spam!! Obama Spam!! Obama Spam!! Obama Spam!! Obama Spam!! Obama Spam!! Obama Spam!! Obama Spam!! Obama Spam!! Obama Spam!!
    • brownrecluse888, on 05/21/2008, -0/+1Thanks for the compliments.....you truly are a genius....now put down your Zima, polish you Ron Paul poster and get to posting more Obama Spam articles!!

      I just heard Obama actually won texas!! Time to post that for the 500th time!!

      Go Ron Obama Paul!!
      • jmpeagle, on 05/21/2008, -0/+1does Zima still exist? I haven't seen a commercial of their in years.
  • darkciti2, on 05/21/2008, -5/+9I've also been saying the same thing to my naysayer friends. They are all saying the sky is collapsing, but I see opportunities being developed and wealth re-distribution from the overextended working class to the younger college kids that are now able to buy homes at great prices and great interest rates. The ones with good credit, that is.

    If you're a recent college grad and if you kept your credit history clean, you can buy a great home for a great price. After, you get a job, that is. There's definitely a balancing act happening right now, but I tend to think that if we do go from stagflation into recession, it may be short lived.
    • Ravatar, on 05/21/2008, -0/+2Forget buying a home, spend that money on something worthwhile, like starting a business. Startups thrive if you put in the necessary effort during a recession.
  • redxninja, on 05/21/2008, -1/+4Yay. Party time.
  • iviasterlambo, on 05/21/2008, -4/+8support the American economy buy Monster Cables
    • redxninja, on 05/21/2008, -1/+4I bought a 300 dollars HDMI cable yesterday....The pictures and sound qualities are just phenomenal.
      • stack3r, on 05/21/2008, -0/+2i bought a $10 chinese made one from ebay and it was better than the $250 cable i got locally :/
      • mcquitty, on 05/21/2008, -0/+2It is perfect, except for the occasional snow and ghosting.
      • santaliqueur, on 05/21/2008, -1/+2You spent $300 on a digital cable? I hope you forgot sarcasm tags. I paid less than $20 for my HDMI cable, with astounding quality. Some people have more money than brains.
    • Amadeus2490, on 05/21/2008, -2/+4www.monoprice.com
      • santaliqueur, on 05/21/2008, -1/+3You'll get dugg down for the website link, but monoprice is a great place for cables.
    • MikeFallopian, on 05/21/2008, -1/+5It's a trap! Monster cables are incredibly overpriced!
  • brownrecluse888, on 05/21/2008, -6/+0I just read that Bush passed the Obama-Ammendment....it states that due to the non stop posting of Obama Spam on digg that he is signing an executive order making Obama president for the next 50 years. Both McCain and Clinton signed on because of all of the searing pro obama posts on digg. Great job folks!!

    ps - Obama won Texas!!!
  • yeediddy, on 05/21/2008, -4/+6The article is over 30 days old - his theory is more stale than Bea Arthur vajayjay. Buried for being untimely.
  • jvittetoe, on 05/21/2008, -2/+1http://video.google.com/videosearch?q=peter%20schi ...
  • atbnet, on 05/21/2008, -5/+7America, ***** YEAH!
    • royalwcheese, on 05/21/2008, -3/+3Coming to save the motha ***** day, yeah!
  • craiginct, on 05/21/2008, -4/+4Unemployment does not count the people who roll off when benefits run out.
    We are in a recession in the Northeast US.
    Hey - did you here about the $300BILLION the US Gov't wants to give Fannie Mae and Freddy Mac???
  • Ricemanstm, on 05/21/2008, -4/+11Uh oh...a story about the American economy that is partially positive. Oh my...here comes the hate America rhetoric.
    • santaliqueur, on 05/21/2008, -0/+2I wish we could just have an "America hating" category and get it over with already.
  • fxtrader30, on 05/21/2008, -3/+1I just digged a blog post about how credit crunch fears are spreading thru the market. All worlds stock markets are down today, dow lost 200 points. I guess there's always somenone who will at things differently.
  • LetsGo2Vegas, on 05/21/2008, -0/+0WOW, This Is Sad!
  • moxley, on 05/21/2008, -4/+3What the ***** is this ***** about "Hating America?"

    Speaking the truth (whatever you think it is, whether you think it is positive or negative) about the economy or the war or the actions of this neofascist government is not "anti American."

    People who want you to pretend, to pretend that something isn't happening, or something is happening, or that something bad is good or something good is bad and that that has any impact on whether or not you love your country are ***** retards.

    It looks to me like we're heading into a depression - reality

    • xenuxenuts, on 05/21/2008, -1/+1remember, when the doctor tells you to quit smoking, he hates your guts.
    • MikeFallopian, on 05/21/2008, -1/+11) Who is talking about "hating America"?
      2) What the hell makes you think we're heading into a depression? That's just absurd.
  • fxtrader30, on 05/21/2008, -1/+1Sorry for double post, the thing cutoff in half when i posted it. I just digged a blog post about how credit crunch fears are spreading thru the market. All worlds stock markets are down today, dow lost 200 points. But I guess there's always gonna be someone who will look at things differently. Being the only economist left in the world who still believes that an American recession is likely to be avoided isn't something to be proud of. It's easy to be contrary just for the sake of it, without putting your OWN MONEY on the line.
  • Hangly, on 05/21/2008, -0/+2We're in the middle of an economic bubble. That bubble needs to correct. Call that correction whatever you want, but it's going to happen.
  • jmpeagle, on 05/21/2008, -2/+4depends of your definition of recession. If your definition is per-capita real GDP falling then we already hit it last quarter even though we had 0.6% positive growth (at an annual rate) in real GDP. The problem is that is lower that the annual rate of population growth (0.883%) in the U.S. meaning the average American's spending power declined in the first quarter of 2008.
  • fxtrader30, on 05/21/2008, -2/+2Here the blog post that the guy above asked for. It shows todays market activity. Everything's down!
    http://forex-online-trading-fxkingg.blogspot.com
    • jmpeagle, on 05/21/2008, -0/+2spammer

      your name kind of gives it away.

      Also, don't justify long term trends with 1 day on the market. We've had bigger drops in boom times. In fact, the biggest percentage drop ever recorded didn't even occur during or just prior to a recession. Black Monday in 1987 didn't push the U.S. into negative GDP growth.

      Also, to your above post, being contrarian is what made people like Warren Buffet rich, hence his saying be fearful when other are greedy and greedy when others are fearful. No one knows where the market is going because if the "knew" they could borrow an obscene amount of money through second mortgages etc... even loan sharks and bet where they KNOW it's going in options ans swaps and multiply their investment by an easy factor of 10 or more.
  • StingingNettle, on 05/21/2008, -0/+1No we are not in a recession... yet. GDP growth is slowing to the point you might as well call it flat. If it continues its trend we will be in one.
  • verifex, on 05/21/2008, -0/+1http://business.timesonline.co.uk/tol/business/col ...
    The article without all the BS ads and stuff.
  • Haoie, on 05/21/2008, -0/+0Here in New Zealand, we're also reaching the point of an economic downturn. It's not easy with rising fuel/food prices and falling employment.

    A US recession will hit us, too.
  • insanebrain, on 05/21/2008, -0/+1-" I am probably the only economist left in the world who still believes that an American recession is likely to be avoided"
    YUP !
  • podrag, on 05/21/2008, -1/+3Official recessions can be avoided by fiddling the official statistics. The fact is that with $130 oil, a house-price crash and double digit real inflation, the purchasing power of the people of the United States is less today than it was last year. Therefore quality of life for most cannot be maintained. Therefore we are in a recession whether it is 'officially' declared by the so-called 'economic experts' or not.
    • bc289, on 05/21/2008, -0/+1Where is the evidence of double digit inflation? You can't just make up numbers because it "feels like it," so far there is no double digit inflation. Also, if you're going to say we're in a recession because of high oil prices, then we'll be in a recession for the rest of our lives
      • RationalXubrnce, on 05/21/2008, -0/+1 Maybe not double digit but it's WAY higher than the ***** stats you hear on TV. Somehow most things have gone up in the last 2 years yet the inflation statistics are very low. Being able to buy a cheap HDTV doesn't compensate for the high prices of buying things you need throughout the week.
  • myphriendmike, on 05/21/2008, -0/+1I this a friggin joke?? The article is 6 wks old. Pathetic fail. Can't believe you're even discussing this. What? You couldn't find an article related to the economy from, say, this week?
  • wynja, on 05/21/2008, -0/+1Why can't anyone else see that there is going to be no recession at this point? Never mind the fact that hundreds of millions of people will starve to prop up the commodities bubble that's keeping our economy steam rolling along.
  • eryximachus, on 05/21/2008, -0/+3Folks, depression 2 is on its way

    http://research.stlouisfed.org/fred2/series/BOGNON ...

    The banks have no money. None. What is most important about this graph produced by the fed is that it DOESN'T go back to the roaring 20s.

    They have no desire to highlight bank reserves today are actually worse than in the depression.


  • XanderDee, on 05/21/2008, -0/+2Last month the government stated that gas prices went down by 2% and next to 0 inflation, so if you believe that then there will be no recession. I am not joking (sort of) if the government can state that gas prices went down in April then they can state that GDP is not negative.
    However if you calculate GDP like America did in the 70s then, well, we would have 12% inflation and a negative GDP for the past few year now. But who wants to see all that gloom and doom. Lets take out food and energy out of CPI and add in seasonally adjusted values and we have like magic no Recession.

    ;)
  • drakomz, on 05/23/2008, -1/+0a recession can be avioded by making more money.what can give you that?self employment.i never bought the idea of FOREX or buying stocks but people do invest in them,it's too risky.put some cash can can lose it all in one second...trash.a good biz you can control and has no limited incoming cash is the best.check out my digg but don't droll
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