Recession

Recession is an ugly word for politicians, and most of whom can be trusted to not utter it at all. So goes our President Ostrich, blissfully telling us that because indicators x and y are not negative, we're not in recession. Well, a kid in the sixth grade who reads newspapers or watches CNBC or FNN could tell you that the indicators have been "cooked" to the point that we could be in a full-blown Depression and today's indicators wouldn't even have us in Recession yet.

Well, we're in a Recession. How do I know, the one who freely admits to almost flunking bonehead Econ in college?

Warren Buffet says so. In case you don't know him or just got in from Planet Zargon, Warren Buffet is the country's richest man, and got that way by astute investment.

Mr. Buffet says we're in a Recession, so we're in a Recession.

Comments

[Brick Oven Bill]

Every cash flow in this country has been analyzed and leveraged by the whiz kids and their computer models. Most of them interdependent and all of them predicting increases forever.

We’re not in a depression yet. If (when?) we go into a depression, things will unravel quickly. The money will leave with the strokes of keyboards.

If the weather gets better tomorrow, we hope to plant our tomatoes.

[GUYK]

Maybe. Down here in Florida the state government is in a bind because there is not as much money coming in tis year due to gas prices slowing down the tourists..but so far unemployment is still around five percent. There are some real estate speculators and some bankers losing their shirts or so I hear. But I am still buying lead instead of banking the money..hell, it don't pay anything anyway.

[Aaron Neal]

Sorry, Rivrdog, but no.

[quote]"This is not a field of specialty for me, but my general feeling is that the recession will be longer and deeper than most people think," Buffett said. [/quote]

Recession is not about "feelings"; recession has a precise definition. A Recession is two consecutive quarters - six consecutive months - of negative GDP growth. So far we have not had a single month of negative GDP growth, much less six months in a row. IT MAY HAPPEN - but expectations are for report (tomorrow or Thursday, I think) of GDP growth of 1-2%. Also, look at unemployment numbers - they're still near record lows. Companies are desperate to hire good people. That's not typical of a recession, even though it doesn't factor in to the definition of "recession".

I don't care what Warren Buffet, Jimmy Page, Brittney Spears, Bill Gates, or Aunt Melba "feels". Recession has a precise definition, it's not based on "feelings", and it's not been met.

That, by definition, is NOT a recession.

Do we have high fuel prices? Low dollar? Climbing inflation? YES to all. But those data points do NOT define a recession. They DO indicate a bad economy, probably getting worse. But not a recession, according to the definition of a recession (we do still follow standard definitions around here, don't we?)

There are a group of people who WANT everyone to believe we're in a recession. These are the same people who wanted to be able to point to Iraq as an abject failure in U.S. military and diplomatic policy. They're the same people who wanted, no, NEEDED, a failure to lay at the feet of President Bush and the Republican Party in general. Iraq, thanks to General Petraeus and The Surge, is proving not to be the failure they were counting on for this election cycle. So now they're preaching that we're in a RECESSION, and repeating that lie often enough that it will be believed.

Don't buy into the lie. Look at the definition, and know you're being lied to. Look at other economic indicators, and acknowlege that our economy is in trouble, but we are NOT in a RECESSION.

And look at who's telling the lies.

[Brick Oven Bill]

The numbers show the ‘growth’ was 0.6% for the quarter. But they do not show that the dollar is down from 0.679 Euros in January to 0.634 Euros in April.

If our quarterly growth was indexed in Euros it would show a contraction of 1.1%.

If our quarterly growth was indexed in oil, it would show a contraction of around 20%.

The economy is shrinking.

[Brick Oven Bill]

Correction: If our quarterly growth was indexed in Euros, it would show a contraction of 6.1% (time for new calculator batteries).

[og]

A very bright man that earned my respect long ago, told me "A recession is when your neighbor is out of work. A depression is when you are out of work".

Me, I don't see it. My company is so damned busy we don't know which way is up.

[TheGunGeek]

The value of the dollar is almost worthless as an indication of the condition of the economy. At best it can show how our economy is doing *relative to* the economies of the rest of the world.

In reality, the shifting of the oil market trading from US$ to Euros probably has more to do with the reduced value of the dollar than anything else. And that does not show that our economy is doing poorly.

By almost every form of measurement, the economy is doing better now than it was during Clinton's presidency when everyone was saying it was the best it had been in over 50 years.

Warren Buffet has been wrong before. Many times. He has a good batting average, but even the best hitter strikes out now and then.

[Phil]

Wtf, RD? You had better be joking. But if not, the following is to hopefully shock you back to reality.

Have you lost your damn mind? You're going to listen to a hypocritical numbnuts who admits to only having a big lucky rabbit's foot and who is two steps this side of George Soros?

I read above that you've hurt your back again. If you'd stop trying to stick your head up your ass like this you'll probably be pain free for life.

The price of transport (people/dur-goods/food/etc.) doubles and the economy just slows down a bit (2% to .6%). That is why you hire a MBA for the Executive.

EDITOR'S NOTE:

No, Phil, it is you who are stuck on the train to Nowhere.

Recession is a loss (to negative numbers) in production of goods and services two quarters in a row. Back when I struggled to get through Econ 201, ALL goods and all services were factored into the measurement of the economy, which was then known as the Gross National Product (GNP). About 10 years ago, the wizards flying their Big Mahogany Tables in DeeCee decided to change the name of the index to Gross Domestic Product, and in doing so, supposedly left out the volatile numbers of US companies producing abroad. In just the last few years, we find that some fairly major items have been left out of the GDP compilation. Things like energy, some food production. Little things like that.

So, with an unreliable and rigged indicator, who are we to believe when it comes to the question of whether we are in a recession or not? I prefer to believe Warren Buffet over the Treasury Dept or central bank wonks. I follow his advice because Commie or not, he still has to make money for his shareholders, and he's doing fairly well in that regard.

But, I didn't just leave it to Buffet. I have my own calculations. My average monthly food bill is up $80/month, my energy costs (Natural Gas, Electricity and Motor Fuel) are (combined) up $150/month, and Communications up about $30/month. The Electric and Gas bills are up that much despite my installing ultra-efficient HVAC and water heating in my home, and cutting my light wattage by half.

So, I have over $260/month less to run my household on.

That sir, is MY definition of a recession. It's probably fits YOUR definition as well, if you run the consequences of the huge commodity increases by your own accountant.

Yep, you can follow Mr. Bernanke's claim that we're not in a recession, but keep spending like you did last year and you will run right out of Yellow Brick Road PDQ. If you, like just about EVERYONE else I know, have made adjustments in your lifestyle, don't stand there and tell me "there ain't no recession, and that's the troof". Let your checkbook balance tell you.