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 Post subject: First the bad news …
PostPosted: Mon Jul 28, 2008 12:56 am 
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Friday's growth figures suggested Britain is tipping into recession.

And now for the good.

Across the Channel it suddenly looks as if the eurozone might beat us to it.

That is, at least, according to The Guardian, which has Ashley Seager telling us that the news from the single currency bloc is bad and the prospects look even worse.

View full article here

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 Post subject: Re: First the bad news …
PostPosted: Mon Jul 28, 2008 3:12 am 
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From the article:
Quote:
The annual growth was down to 1.6% - half the pace of a year earlier. And all the signs are that growth has further to slow.


An annual growth of 1.6% may be a slowdown, but it isn't a recession until there is ZERO growth for six months.

A lot of things can happen in six months. They've been telling us that the US is "heading for a recession" ever since President Bush was elected in 2000. We haven't had a recession at all during this time, and every quarter for the last seven years, the newsies have announced, with open mouths, that we were still showing positive growth, "... and the experts were surprised!"

Just goes to show that the people who enjoy bad-mouthing economics need to find new "experts". The lot the US media consult should have been fired at least six years ago! PDT_Armataz_01_25

Growth is growth is growth. It ain't a recession until growth REVERSES--completely-- and maintains that reversal for six months.

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 Post subject: Re: First the bad news …
PostPosted: Mon Jul 28, 2008 10:54 am 
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Quote:
An annual growth of 1.6% may be a slowdown, but it isn't a recession until there is ZERO growth for six months.


Thank you for reinforcing what I have been saying for months if not years. It ain't a recession until it is a recession. Zero or negative growth for two quarters. Nothing else. That American recession seems a long time coming. PDT_Armataz_01_18


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 Post subject: Re: First the bad news …
PostPosted: Mon Jul 28, 2008 5:19 pm 

Joined: Tue Aug 08, 2006 10:30 am
Posts: 825
Location: Traveling again.
Here in Italy an Eclectic Contracting Co, has been advertising for electricians for 3 weeks ( need 6, two replies ) pay €2,550 for 40 hours clear, only Italian license holders need apply, there seems to be the beginning of a rescission here but it is in the out lander sector, car window cleaners, parking arm wavers, sock sellers,card holders, ( 5 kids, no mother, no father, need to go home etc.,) have quad tripled.
The tourist bus parking lot at the Vatican had all the luggage stolen from 8 tourist buses at gun point, arrested 7 Romanians, (3 had been previously deported) the luggage was loaded onto a Romanian TIR and is now somewhere in Romania, business as usual for the Romanians, no signs of a rescission, welcome to the EU.

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 Post subject: Re: First the bad news …
PostPosted: Mon Jul 28, 2008 8:33 pm 
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Helen S wrote:
Quote:
An annual growth of 1.6% may be a slowdown, but it isn't a recession until there is ZERO growth for six months.


Thank you for reinforcing what I have been saying for months if not years. It ain't a recession until it is a recession. Zero or negative growth for two quarters. Nothing else. That American recession seems a long time coming. PDT_Armataz_01_18


Exactly PDT_Armataz_01_29 . What liberal writers try to ignore (and one might presume that the writers for the Guardian might have just the teensiest of liberal leanings PDT_Armataz_01_32 ) is that economic terms exist to define things. Trying to RE-define things doesn't change the fact that a slowdown isn't a recession until it completely reverses for a considerable period. Economies go through periods of slow-downs and speed-ups, and a slowdown isn't neccessarily a "bad" thing. For all the fuss and bother about the US housing market, now is the BEST time in decades to buy a house in the US because prices are dropping. It's also the best time for people from other lands to vacation in the US, due to the weak dollar, and because of that Central Florida is having a boom year with all the foreign tourists coming to Disney and Cape Canaveral, etc.

As I said above, a lot can happen in six months. The really nasty part of all this is that the liberal-leaning media seem to be TRYING to talk the economy down and trying to stampede people into making rash financial choices. They've been doing that here for seven years.

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 Post subject: Re: First the bad news …
PostPosted: Mon Jul 28, 2008 8:49 pm 
Nominal Growth (= 1.6%) less Inflation (= 3.8%) = Actual Growth of -2.2% = Recession.


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 Post subject: Re: First the bad news …
PostPosted: Mon Jul 28, 2008 9:49 pm 
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Budgie wrote:
Nominal Growth (= 1.6%) less Inflation (= 3.8%) = Actual Growth of -2.2% = Recession.


That isn't the way it works. Growth is growth.

This is a "slowdown", and a slowdown is not neccessarily a bad thing. Yes, the value of a house in certain US markets has dropped from $120k to $100k, but what if you bought the house 20 years ago at $50k? What is your "loss"? That looks like a $50k ACTUAL gain to me. You can moan and groan that your house lost $20k value on paper, or you can celebrate the REAL $50k gain. The cup is half empty or half full. That is YOUR choice to make. But a warning here-- borrowing trouble is cynical, and cynicism kills.

Economics is not something that you can twist to your own definitions, and the definitions exist for a reason. Do you compare today's 1.6% to last quarter's 3.8%, or to the last recession? You can play all sorts of games with the numbers. But the exact definition of a recession is, and I repeat, six months of negative numbers. A SOLID 6 months, or two financial quarters.

A gain in that period-- ANY gain-- breaks the downturn and spoils the recession for those who enjoy moaning and groaning.

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 Post subject: Re: First the bad news …
PostPosted: Mon Jul 28, 2008 10:31 pm 
Mama,

Budgie has a point. (I can't comment on his figures though.)

Take a silly case. If inflation were running at 100% per annum you'd need a nominal growth rate of 100% just to stand still.

Similarly, other things being equal, if your only choice were to put your money on deposit earning interest at less than the rate of inflation or to spend it, you'd be better off blowing it now.

As for house price gains, you'd need to strip out inflation to see what they are. And then to the extent that you'd never realise that gain you probably wouldn't be that interested either way as you'd still need a house to live in, again other things being equal.

One thing that pisses me off about economic reporting is how often it isn't made clear whether the figures quoted are nominal or inflation-adjusted.

Other than that, I favour your general outlook in these things. :)


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 Post subject: Re: First the bad news …
PostPosted: Mon Jul 28, 2008 10:55 pm 
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Good points, Charles.

However, I know-- as we all do here in the US-- that much of the economics talk in recent years has been more about pointing fingers of blame at Bush than about actual economic conditions. The fact that the US has had an average 3% inflation rate and no recessions in spite of 9/11, war on two fronts, Katrina and several other huge natural disasters, and economic scandals like the Enron thing, tell me that the economy has been doing extremely well in SPITE of huge problems that have come up over the years. Our unemployment rate is still below 6%. During the Clinton Administration, this was regarded as "full employment", according to the newsies, because we can count upon having between 6-7% of our population between jobs, for one reason or another, at any time under any conditions, and also accounting for millions of new "bodies" entering the job market during any given year. Our current 5% unemployment became a "disaster" noted by giving the actual number of unemployed almost the moment Bush took office. 5% of 350,000,000 is a huge-sounding number until you remember that during the Clinton years it was "full employment".

The US media has been WORKING at "talking down" the economy since Bush took office-- and it started before Bush's first budget ever took effect (meaning that if there actually had been a "problem", it would have been more accurate to blame it on Clinton). This kind of data fudging has been running rampant in the US for years, but it has reached a peak this year because it is an election year.

And it's probably affecting the economies in Europe. I'm sorry about that-- I just wish I could do something more about it.

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 Post subject: Re: First the bad news …
PostPosted: Mon Jul 28, 2008 11:37 pm 
Mama,

What you say is mostly news to me but no surprise. Leftoids are the same the world over.

All to be Tod Kamp fodder — one day, I hope.

Just jok........... No, strike that.


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 Post subject: Re: First the bad news …
PostPosted: Tue Jul 29, 2008 12:28 am 
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Charles Endell Esquire wrote:
Mama,

What you say is mostly news to me but no surprise. Leftoids are the same the world over.

All to be Tod Kamp fodder — one day, I hope.

Just jok........... No, strike that.


It all comes out in the donations the news people give to political candidates-- they give to Democrats over Republicans at a rate of 100-1.

http://www.ibdeditorials.com/IBDArticles.aspx?id=301702713742569

Even supposedly "right wing" Fox News reporters gave zero donations to Republicans.

The fact that political bias shows up in the news broadcasts comes as no surprise to anyone I know. PDT_Armataz_01_10

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"Ytringsfrihed er ytringsfrihed er ytringsfrihed. Der er intet men."

~~"Free speech is free speech is free speech. There is no 'but'."~~

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 Post subject: Re: First the bad news …
PostPosted: Tue Jul 29, 2008 7:43 pm 
3.8% = current UK CPI inflation (well under inflation experienced by most people)
1.6% = current UK "growth" forecast (forecasts vary)

So if UK GDP is currently 100, in one years time, after "growth" and inflation, that GDP will be worth 97.88 in today's money. This is recession.

What money buys this year and what money buys next year is the key.


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 Post subject: Re: First the bad news …
PostPosted: Wed Jul 30, 2008 12:12 am 
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The thing is Budgie even if your figures are correct, and I have no idea whether they are, all you can prove is that money next year will be worth (possibly) less than it is now. But on what basis? After all, you have no idea how much you will be able to buy next year for the same number of pounds. And what sort of things? Food may be more expensive, transport will certainly be more expensive as it always is, other things might well be cheaper. Can't see what you prove by those calculations.


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