Friday, August 5, 2011

Main Stream Media Finally Reporting There Was Never Any "Recovery" As Stock Market Plunges 500+ Points

2011's "gains" in the Dow have been wiped out as continuing weak economic data causes jitters hard on the heels of the Debt Ceiling "Deal".   

This collection of graphs outlining Unemployment, Gross Domestic Product, Industrial Production, and Real Personal Income delineate the struggling US economy.

2012 will see another recession.  And locally, unemployment is rising again.

Ironically, due to the weak economy, mortgage rates are at a historic low.

FLASHBACK ONE WEEK: On July 29, the GDP (total amount of goods and services produced in USA) was revised to almost non-existent for Q1 2011, and "barely breathing" for Q2 (sure to be revised downward in the coming months).  Via The White House Council of Economic Advisors:

"Today’s report shows that the economy posted the eighth straight quarter of positive growth, as real GDP (the total amount of goods and services produced in the country) grew, but at only a 1.3 percent annual rate in the second quarter of this year.  The downward revision in the first quarter to 0.4 percent further reflects the slowdown of economic growth due to substantial headwinds faced in the first half of this year. Additionally, the annual revision to GDP showed that the Great Recession – the worst on record – was even deeper than originally estimated.

In this year’s annual GDP revision, the overall downward revision was concentrated at the end of 2008 and the beginning of 2009, so that growth in 2008:Q4 was revised to -8.9 percent from -6.8 percent and 2009:Q1 was revised to -6.7 percent from -4.9 percent. What was already the deepest reported recession since official quarterly estimates began in 1947 is now reported to have been significantly worse."

--Austan Goolsbee is Chairman of the Council of Economic Advisers

Bolding, emphasis = Cville Bubble

While the MSM may be "shocked," the (continuing) Recession (Depression), the Stock Market Correction, rising unemployment, and declining home prices are no surprise to readers of Zero Hedge or The Automatic Earth or The Market Ticker.  These are finance/econ/housing blogs that began on the "fringe" and are now engaging in the most accurate reporting available.

1 comment:

Art Nesten said...

Just FYI, it's clear later but you should edit "On July 29, the GDP was revised..." to "the GDP growth was revised..."

Secondly, the GDP is not the total amount of goods and services produced by a country. It is the total amount of money spent in the country calculated by Consumer spending + Investment + Government spending + Exports - Imports [C+I+G+(X-M)], which is an reasonable but flawed attempt at approximating economic production--which truly is the economy. It is used because it's much easier to quantify and collect data on spending than production.

This is important for a couple reasons. First, debt fueled spending makes economic growth seems larger than it actually is. The government or consumer can just borrow $1 billion and spend it without producing anything, and the GDP just increased by a billion dollars.

Second, it privileges economies of exchange rather than economies of use. For example, if a household purchases nothing but grows its own food, schools its own kids, and builds its own shelter from trees in its yard, it contributes zero to GDP because. If that same household transitions to buying all its food from McDonalds, sending kids to private school, and renting an apartment, GDP goes up. So the because the GDP doesn't count economies of use, GDP is biased against household economies.