Buffett reiterated that he believes the U.S. economy is in a recession by his definition, even if it hasn't yet met the commonly used criteria of two quarters of negative growth.
He said his definition of a recession is when most people and businesses are not doing as well as they were three, six or nine months ago.
"I would say that we're in a recession clearly," Buffett said
Mr Blodgett, the author of this piece states about the current GDP data:
First, those are just preliminary numbers. Maybe hold the champagne until the several rounds of revisions are out.
Second, 0.6% growth is horrible, especially when you consider that the population is growing at least 1%. On a per-capita basis, GDP was down.
Third, as the NY Post's John Crudele explains, the much ballyhooed "growth" was the product of three key inputs, none of which is a sign of consumer recovery, and one of which is absurd:"
Any logical reader must agree. The current GDP data are very probably cooked because no political party in modern American history has won a presidencial election during a recession. This administrations domestic economic policy is totally fubar and the Republican party is totally done. Stick a fork in them. Goodby Bushie and don't let the door hit you in the ass when you leave.
GDP Grew Last Quarter? Only If You Believe In Santa Claus
The recession-deniers were out in force yesterday after the "better-than-expected!" GDP figures came out: See? The economy GREW in Q1! We aren't in a recession! All that horrendous economic and housing data is just media hysteria!
Here's what they didn't tell you:
First, those are just preliminary numbers. Maybe hold the champagne until the several rounds of revisions are out.
Second, 0.6% growth is horrible, especially when you consider that the population is growing at least 1%. On a per-capita basis, GDP was down.
Third, as the NY Post's John Crudele explains, the much ballyhooed "growth" was the product of three key inputs, none of which is a sign of consumer recovery, and one of which is absurd:
* government spending (deficits),
* inventory growth (companies buying stuff to put on shelves), and, most importantly,
* a 2.6% inflation assumption.
Get that? To calculate that the economy grew 0.6%, the government had to assume that inflation was only 2.6%. Anyone out there who buys gas or food occasionally think that inflation is only 2.6%? Didn't think so.
Move that inflation assumption up to even 4%, says John Crudele, and GDP in Q1 was down. For the second quarter in a row. Which makes this an official recession. As if we didn't know that already.
See Also: A "V-Shaped" Economic Recovery? You've Got To Be Kidding Me
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Why can't we just be happy that it wasn't as bad as we expected?
The GDP numbers were good news. I know everyone here hates Bush, but why cant we just be happy.
Did you not understand his article?
The numbers aren't good. They are fiction. They are fudging the numbers to give the appearance of growth. Take two of the data elements, a 2.6 percent inflation rate which we know is pure crap and counting inventory as growth. All that excess inventory means people aren't buying and a bogus inflation rate really hides how much the economy shrank.
Go over to the government's EIA website and look at their data on oil. You see the same misuse of data because they have purposely low balled the cost of a barrel of oil.
This reminds me of the invasion of Iraq, manipulation of the facts to sell a war and now they are manipulating the economic data to get you to vote McCain.
Notice how Democrats are labeled lefties by the talking heads. I'd love to see a Democratic candidate knock the shit out of one of those talking heads when he refers to them as leftists. I've never heard a Democrat talk about a state run economy or calling religion the opiate of the people. Democrats have allowed the right wing nut jobs to portray them as a bunch of Bolsheviks.
"Why can't we just be happy that it wasn't as bad as we expected?"
Because that would be the equivalent of sticking our heads in the sand. People are struggling financially, and the fact that the numbers don't officially show a recession is nearly a moot point.
Hooray Mr. Blodget !
I have been posting for some time that the fake and under-reported official inflation figure makes the official GDP growth appear greater than it is.
Mr. Blodget, as a father, I would love for everything to be great in this country, unfortunately it is not. Governments fudge statistics to suite their needs, as you have noted. Everything is great according to DC and we will find those weopons of mass distruction any day now. In this mornings Bloomberg report, "Gulf States May End Dollar Peg", they may not, but I would be worried even if they are considering it. Yesterdays CNN Money.com, "Housing prices post record declines". According to Dean Baker, co-director of the Center for Economic and Policy Research, as much as $6 Trillion in home values could be wiped out from the top of the housing market in June 2006 throught the end of this year. Peter Schiff at Euro Pacific Capital expects to see price declines of 30% nationally and by as much as 50% in the worst hit areas. That is money evaporating in front of your eyes. "All that horrendous economic and housing data is media hysteria!" The media is too concerned about their next free lunch, they don't care about the average American, tell them, don't worry, be happy.
OK Dan...I agree with all your assertions except one...
this supposed $6 Trillion loss of equity in housing....8(
when you look at the REAL cost of housing minus the artificial runup...
things should be finally starting to come back into equilibrium in about 6 months if we are lucky...
the accelerated price increase is so off the charts that even with a reasonable devaluation...
home prices will still be way up over what they should have been if not for the bubble...
talk about artificially inflated figures...8(
tfcn, I agree, but you are looking at housing for housing sake, as I would. Due to stagnant wages and rising costs, many Americans used their homes as ATMs to finance the "American Dream". The ATM just broke.
You might ponder about all the product put forth by the sum total of all the prostitutes in New York City and imagine sum total dollar value expended for procurement. Then think about ( at $5000 per hour) all of the gross national "product" that is not even being counted, not to mention taxed! You know the way boys are, we may actually be doing better than the numbers indicate.
When this president presents the Thanksgiving turkey on the front lawn of the white house, no matter what size the turkey may be, we all know who is the biggest turkey present on the front lawn.
It all depends on how one defines growth. Europeans over the past two decades experienced less growth than the US. But while our infrastructure is seriously degraded, honest architecture and city planning don't seem to exist and the economic situation of the average consumer has deteriorated, Europe (and most of the rest of the world) show off beautifully re-designed and upgraded cities buzzing with life. I guess investing in museums, libraries and public spaces is a slightly longer term investment in quality than stock brokers buying speed boats.
And Gulfstreams.
Government economic data has always been massaged (manipulated) by whatever administration is in power. This has been going on since the sixties and has slowly eroded the usefullness of the entire set of statistics that we use to describe the economy.
For example, in the sixties the unemployement rate was changed form measuring the actual pool of unemployed to a self reported monthly questionaire that subtracts out anyone whose unemployment benefits have run out. This statistic is simply noise. That's why it now registers the constant 4-5% unemployment rate while the labor force shows that over 10% of the pool of available workers are out of work.
Inflation is now measured with the "core" rate which leaves out everything that goes up. Remember, many social programs such as social security have increases that are pegged to the inflation rate. Lowering the number saves the govenment billions of dollars per year but we no longer have a conversation about what is really happening. A simple accounting of price increases of consumer staples shows that inflation has already reached 10%.
There is an underground that tries to track these old but real statistics. If your interested start here:
http://www.shadowstats.com/alternate_data
nice link...Thanks!
Timmay? Oh, Timmay?
Where are all the partiers claiming growth is growth??
The internet must be broken in Utah today.
Lies, damn lies, and statistics..... All depends on what your initial assumptions are.
I hope that people realize that the Business media and the Bush administration are never to be trusted to tell the truth.
Business media relies on people who profit from good markets so they NEVER tell the truth when things are bad.
The way the GDP is concocted brings about a false number that doesn't reflect the reality of average income Americans.
So right! If their lips are moving, they're lying.
or he obviously has his hand up somebodies butt...8)
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Posted May 1, 2008 | 10:25 AM (EST)