Drudge has this at the lead this AM, but there is more than the 1.5% that you need to focus on.
Facts and numbers are important, they are critical to cut through all the smoke, dazzle, and white noise of a political season.
Here is the executive summary you need to let soak in. Via the governments Bureau of Economic Analysis:
2011 GDPReal GDP growth is contracting. Cost of goods is increasing. Imports are increasing greater than exports. People are spending more, but out of savings.
Real GDP increased 1.7 percent in 2011 (that is, from the 2010 annual level to the 2011 annual level), compared with an increase of 3.0 percent in 2010.
The increase in real GDP in 2011 primarily reflected positive contributions from personal consumption expenditures (PCE), exports, and nonresidential fixed investment that were partly offset by negative contributions from state and local government spending, private inventory investment, and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.
The deceleration in real GDP in 2011 primarily reflected downturns in private inventory investment and in federal government spending and a deceleration in exports that were partly offset by a deceleration in imports and an acceleration in nonresidential fixed investment.
The price index for gross domestic purchases increased 2.5 percent in 2011, compared with an increase of 1.5 percent in 2010.
Current-dollar GDP increased 3.9 percent, or $561.2 billion, in 2011, compared with an increase of 4.2 percent, or $587.5 billion, in 2010.
During 2011 (that is, measured from the fourth quarter of 2010 to the fourth quarter of 2011), real GDP increased 1.6 percent. Real GDP increased 3.1 percent during 2010. The price index for gross domestic purchases increased 2.5 percent during 2011, compared with an increase of 1.4 percent during 2010.
Frankly, I expected better. In macro - we need to watch 2012 close. To let politics sneak in - this plays in to Romney's strengths. This is a gift if he is willing and able to use it.
Diversity FRIDAY threadjack: THIS JUST IN! TRAINED, PROFESSIONAL AVIATORS DO THEIR JOBS. Just happen to be female....
ReplyDeletehttp://www.navy.mil/search/display.asp?story_id=65011
You know me - I am and have always been a supporter of females serving wherever they are qualified to .... and I find this "First Female" junk just patronizing and pathetic. It stopped being a big deal over a decade ago. It may seem nifty to senior leadership - but to anyone under 40 it is just a big yawn.
ReplyDeleteOver 50...still a big yawn. Keep your pants up and do your job - that's all I ask.
ReplyDeleteOver 60 - Big yawn. Heck, I dated one of the first women Naval Aviators. Just NBD anymore, except to the Diversity Nazi's. To their credit, 90% of the Navy flyers I've known who happen to be women find this stuff really, really embarassing.
ReplyDeleteYawn.. sucka
ReplyDeleteThis is terrible news. Fuel Costs are not dropping. Stand by for next wave of housing downturn. Rising energy costs are gonna eat what ever is left.
ReplyDeleteinteresting times...
solution is simple:
ABOLISH the EPA
DRILL on our own soil
Tarriff Chinese Goods and Drop Corporate Tax Rate to ZERO for two years.. this will creat jobs in a nanosecond
So, back on theme: who would be better in bringing economy back on track; Romney or Gingrich? Romney has more private sector experience, and seems to get more support from corporate circles. Gingrich is most famous as the man who managed to bring budget to balance back in Clinton years, managing to find a common ground with administration despite being on the very opposite ideological end. Your opinions, gentlebeings (diversity nod) of the porch?
ReplyDeleteRomney. He understands the private economy better, knows how to focus, and is a "fixer." That is what we need now. Do that, then go to the moon.
ReplyDeleteYou gota a AMEN fum da congagation!!!
ReplyDeleteOnly in Washington accounting practices were the budgets of the 90's counted as "balanced" or resulted in a "surplus".
ReplyDeleteNeither was true. We ran deficits all through the 90's and continue to do so today. Look at the National Debt for an unvarnished view as to if we ran a deficit or we ran a surplus. If the National Debt increased from last year to this year, we ran a deficit. If the National Debt decreased this year from last year, we must have had a surplus and used the surplus to pay down the National Debt.
Simple. And free from political spin as the US Treasury maintains the National Debt down to the penny and publishes this information out in the public for anyone to check.
By the way, the last time we reduced the National Debt year to year was back in 1958, so it has been awhile and several administrations (D and R) since we last ran a surplus that resulted in the National Debt being reduced.
The National Debt is killing us...we are BROKE and sooner or later we will need to have an adult conversation about how to correct the situation. We can either have this conversation early and minimize the pain (there will be pain) or we can stick our heads in the sand [or other areas] and suffer greatly when the correction occurs.
Sean
Fuel prices may not drop that much, but at lest the money will go to 1.US businessmen 2.US workers 3.US treasury (via taxes on the workers) and not to funding Sunni proselytism worldwide...
ReplyDeleteTariffs on the China import will add to this a bonus of "less money for the PLA/AF/N"
Set the corporate rate tax low - 5 to 10% - but for 10 years - and better 20. We need long term commitement, not migrating birds.
One thing that is worrying me is Chinese demanding the payment of all the bonds US owes them, and not buying new ones...
But we digress...
ReplyDeleteI would think that with the massive outsourcing that's been going on in the U.S. for a while, using GDP as a measure of economic growth paints only a partial picture compared to a metric like GNP.
ReplyDeleteGuest, having the average politician develop a "balanced" budget is an exercise in futility. You also have to beware of balance budget laws like they have in Arizona that lead the Governor to sell off the state capitol for $81 million then try to buy it back in two years for $100 million. Imagine pulling stunts like that on the Federal level just to "balance" the budget.
ReplyDeleteIt seems like every politician loses their mind on the Hill when they start working budgets. I say we task a random group of middle-class families from around the country each year (a different sampling each time) to build the Federal budget. Make it like jury duty. Hell, send them all to Disneyland while they're doing it to ease the pain.
"Honey, you're not going to believe what came in the mail today. Can you find my slide rule?"
Gingrich has spent his entire adult life working in government or lobbying it. During that time he has focused on making government more efficient, not reducing its size. Gingrich is a street fighter and I trust him to be more confrontational, but he is also a brillent scatterbrain - he has a dozen great ideas every day, but his follow through seems lacking.
ReplyDeleteCompare him to Ronald Reagan who had basically 3 ideas in 30 years - 1. Win the Cold War, 2. Cut the size of government, 3. Cut taxes - he may not have accomplished all of them, but there was never any doubt about his goals. And yes, I know, RR was President before my oldest niece was even born; I do need to get over him.
In 100 years the headlines will read "First Black Womyn Gender-Queer with >10% Latino Heritage Pilots Freighter to Mars on standard FedEx Route."
ReplyDeleteI'm all about acknowledging firsts, especially for the people who had to fight against a**loads of discrimination, but I think we may have reached the point of diminishing returns. Still, job well done Ladies.
<span>NEITHER, because neither understands the fundamental underlying issue that produces both our garbage economy and inflation, which is our weak currency, now in crisis mode. Unemployment, poor GDP, and inflation are ALL products of a weakened currency, which has devalued 95% since the 1913 advent of the Federal Reserve.
ReplyDeleteHave you ever heard either Romney or Gingrich speak about currency? Gingrich has recently given Ron Paul some lip-service - because he wants his delegates at the Convention - but he doesn't speak about it directly, because he doesn't understand it, and doesn't favor cutting spending, as shown by his moonbase idea. Romney's actually worse; he deliberately will not speak on the issue, given that he's sponsored by the entities who profit from the continuation of the policies that are destroying our currency; these are, as a matter of fact, the same entitities that sponsored Obama's 2008 campaign. These entitities make their livings hedging, so you'd expect they'd do the same in the Presidential primaries. Look it up for yourself.
It is true: Government spending is the root of the issue, but the currency problem really took off in 1971, when the international use of the dollar as reserve currency pushed the US Dollar off the gold standard... just like every other failed empire in history, we have embraced fiat currency at the end of our tenure.
As our government lacks both the willpower to cut spending and the capacity to tax the public any more, we print the money to make up our balance sheet. The Treasury does this in the form of T-Bonds, selling them at auction for a fraction of a percent. Then the Federal Reserve, through Quantitative Easing, buys them back at a higher percentage, thereby laundering money to the tune of $16 Trillion in the past 18 months - $7.77 Trillion of which went to the financial industry. Through all this, we have surpassed China as the world's largest Treasury Bond holder. We are now both debtor and lender to ourselves. Through "Operation Twist," the Fed has extended maturity dates of these Bonds, but this can't last forever.
Furthermore, the Fed keeps interest rates low to encourage spending - thereby discouraging savings. We are coming to the end of the line, as the bubble has expanded to the point that the Dollar is so weak no one wants to buy our debt any longer. India started buying oil from Iran in gold this week; Russia started trading with Iran in their own currency last week. Financiers at Davos are looking for a way out of the Euro crisis, so a new form of currency is being discussed now. When our trade partners realize we have exported inflation and destroyed their economies, beware.
History shows that a return to sound currency is the only thing that will save us; analysis of current events shows that this will not happen until we are forced to do so. </span>
a few years ago Los Angeles county discovered that they only had one county building that was not second, third, fourth and fifth mortgaged to the hilt. (very quietly mortgaging city and county buildings had been the traditional way to get out of budget short fall problems until then).
ReplyDeleteit was an old warehouse that creaked in the night from the termites running back and forth and built on an oilfield hazmat site. they were awfully quiet about what they did to get out of that mess.
many years ago the japanese bought up a lot of prime real estate in california.
ReplyDeletethe pundets wailed and screamed about japan owning everything west of the san andreas fault and if the fault ever opened as it was threatened to do we would have to fly the meatball flag.
then the earthquake in Nagasaki occoured and the japanese needed fast cash to fix that mess. all of a sudden the market became a buyers market and the japanese took a real bath in hotels, office buildings........
could happen in the bond market.
C
Japanese (Shuwa Co.) bought our HQ building in LA in the 1986 for $660 million and then found asbestos and had to remove it ($30-$50 million from all 52 stories of it in two towers - BofA occupied the other tower). A developer (James Thomas of Los Angeles) bought it back from Shuwa for $270 million in 2003. Everything is cyclical. Some cycles are just longer than others.
ReplyDeleteUS - they lost their shirts on Rockafeller Center too.
ReplyDeleteGeorge Meany (former AFL-CIO head) used to say he had no problems with foreigners buying up US assets - 1. - what were they going to do, move that Kansas farmland home? 2. It just meant the US could expropriate their stuff as easily as foreign counties did US-owned stuff.
Travis - check out Rickerds' new book, Currency Wars.
ReplyDeleteHe also did a talk at Johns Hopkins University Applied Physics Lab's Rethinking International Security lecture series awhile back. Streaming lecture at the 12/7/2010 event here:
Sal - if the economy is going to impact the defense budget (and it will), maybe you want Rickards on Midrats?
ReplyDeleteHe did the John Batchelor Show (rightwing radio talk show from NYC, which is to say he's a moderate Democrat anywhere else in the country) on 24 Jan 2012 beginning at the bottom of the 11 pm segment here.
during the early fifties the french franc was worth about .002c. weomen were literally going grocery shopping with wheelbarrows of cash.
ReplyDeletethen they devalued the franc 100 to 1.
lots of screaming and shouting. but i notice they are still in business.......
C
back in "trickie dickie's" reign (aka the nixon administration) the dollar was tied firmly to gold. usgovt. was buying/selling at $35/oz. speculators (mostly europeans) were buying gold by the ton literally at $35 and selling it in europe for $80-90.
ReplyDeleteaccording to the financial types things were pretty bad so trickey dick let the dollar float and the next morning the speculators were jumping off of 15 story buildings.
what i'm trying to say is that the chinese owning a lot of our debt is a bad thing. there are people who know how to handle this situation. unfortunately they arn't in the current administration.
C
Im 27...........why the hell is that news?
ReplyDeleteNeither.. the Ship of state has hit the Iceberg... we need a MAJOR change of direction or we are screwed... in fact it may be too late already.. if the world decides to ditch the dollar as the reserve currency, say good bye to the US..
ReplyDeleteGingrich got rich from the same trough.. make no mistake.. he is a weather vane. he changes with the winds...
ReplyDeleteStrong medicine
ReplyDeletepk, bonds are a suckers bet.. the sovreign debt will demand default on bonds..
ReplyDeleteSo if you owned a hypothetical mutual fund or IRA, are you best keeping it in FIAT currency of today and continuing to dump FIAT currency dollars monthly into it? or do you cut the baby and go PM on all?
ReplyDeleteAndrew,
ReplyDelete<span> "I do need to get over him."</span>
Heck no. I was born during the Reagan administration and I have no real memory of him as president. But my father, who loved and revered Pope John Paul and Ronald Reagan above any other public figures, trained all of his children to do the same. And we're not alone. A lot of conservatives in their twenties talk about electing the most Reaganesque candidate. You're in good company. :)
Kristen, I joined the Navy during Reagans "600 ship"... it was a great time to be a Sailor.
ReplyDeleteYour father raised you well!
EIGHT YEARS AGO...
ReplyDeletethe lady who got me on board of DowneastBlog, though she leaned Republican, alerted me to a wonderful speech she had heard the day before by a young promising democrat senator by the name of Barack Obama.
I started reading the transcript. It was titled 'The Audacity of Hope'.
AFTER 30 SECONDS.... BACK IN 2004....
... I had made up my mind.
In the PAST EIGHT YEARS...
... I haven't had to change my opinion.
Damn James, you are a kid, Son! 31 here.....
ReplyDeleteChop, please make sure that you sit on Navy Red to send a BZ to every single pilot who makes a successful combat mission.
ReplyDeleteExcellent! That makes two of us for never getting over Reagan!
ReplyDeleteI was happy to cast my first vote ever for him. His second election. Add me to the list of people who never got over him.
ReplyDeletePerfect! We now have five, which I believe is enough for a club. I'll be the social charman. Our first event will be an 80's party. DB and I will wear big shoulder pads and big hair. The men will wear Ronald Reagan dark suits with red ties. And we'll drink...um...what was popular to drink in the 80's?
ReplyDeleteDepends. Which one will more eagerly embrace austerity? Probably Gingrich. He'll follow the lead of British conservatives, "cut our way to growth", who have now sunk the UK economy deeper, longer than the Great Depression: http://delong.typepad.com/sdj/2012/01/the-british-economy-is-now-doing-worse-than-it-did-in-the-great-depression.html. Or maybe Romney. He knows how to cut his way to profit. He'll see that interest rates in the UK remain rock bottom, good for the banker class.
ReplyDeleteMaybe we need a candidate who knows that cutting your way out of a liquidity trap is like bleeding yourself out of shock.
I'm voting for the liberal Democrat, Mitt.
ReplyDeleteI'll wear a Members Only Jacket and some Vans with my levi 501's
ReplyDeleteTravis,
ReplyDeleteGood comments.
However, I believe all currency, even the Gold Standard, amounts to fiat currency. You can't get around that. The current system of fractional reserve banking, coupled with the World's embrace of usury followng the "Reformation" has been poison but a return to the Gold Standard isn't the answer either. (If that is what you are even advocating).
I would be for linking the money supply to capital expenditures by the government such as bridges, dams, etc that actually contribute to the real wealth of a nation. That way our money supply only increases as we actually build up our infrastructure.
Even gold based currency is subject to inflation, as the Spanish discovered after flood of gold from the New World drowned their economy...
ReplyDeleteMakes a lot of sense, John.
ReplyDeleteI know that when my budget is about done for the month, the only way that I can get myself back on the right track is to borrow every penny I can from anyone that will let me have it, and then spend it on the first thing I can find. Somehow it always makes everything better for the next month :-E .