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Thread: Weekend Commentary - We've Never Left the Recession

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    Default Weekend Commentary - We've Never Left the Recession

    from


    (snip)"It is three and a half years since the Great Recession hit in 2008 with the collapse of our financial system caused by the Wall Street banks and their captured politician cronies in Washington D.C. Their mouthpieces in the mainstream media have been telling the American sheeple that we have been out of recession and in recovery since the 4th quarter of 2009. It truly has been a recovery for the Wall Street bankers and the mega-corporations that have laid off millions and opened new factories in the Far East while generating record profits and rewarding their executives with millions in bonuses. The stock market has doubled from its 2009 lows. All is well on Wall Street – not so much on Main Street.

    The compliant non-questioning MSM reported that GDP in the 1st quarter rose 2.2%, less than expected. This pitiful government manipulated result confirms that we are back in recession. The first quarter had the huge benefit of fantastic weather, an extra day, and a supposed surge in jobs. And this is all we got? Take a good long hard look at this chart.



    To factually assess the fake recovery reported by the Federal Government, Wall Street and the MSM, you need to check out the data on the BEA website regarding REAL GDP. The average schmuck still doesn’t understand how the government and Federal Reserve are screwing them through the insidious taxation of inflation. I urge you to look at this inflation adjusted data:



    According to the BEA, REAL GDP was $13.3 trillion in the 2nd quarter of 2008 before the crisis. As of today, the BEA says REAL GDP is $13.5 trillion. These government drones have calculated these figures by having the balls to tell you that the CPI is only up 6% since the 2nd quarter of 2008. Gas prices are up 20% since the 2nd quarter of 2008. Even the BLS manipulated inflation figures show that Food has gone up 11% since the 2nd quarter of 2008.

    The truth is that inflation is underreported by the Federal government by at least 5%. Therefore, if GDP was properly adjusted for real inflation, we have never left the recession.



    Even if we use the REAL GDP figures provided by the BEA, the result is absolutely horrific when analyzed in comparison to what our “leaders” have done:

    •Real GDP has gone up by $200 billion since the 2nd quarter of 2008, a 1.4% increase.

    •The National Debt has gone from $9.5 trillion in the 2nd quarter of 2008 to $15.6 trillion today, a 64% increase. Not too much bang for our Keynesian buck.

    •There were 146 million Americans employed in the 2nd quarter of 2008. Today there are 142 million employed Americans. The working age population has risen by 10.5 million over this same time frame. According to the fine drones at the BLS, almost 8 million Americans willingly decided to leave the workforce during this time and do not count as unemployed.

    •Profits of the mega-corporations making up the S&P 500 are at all-time highs.

    •Wall Street Too Big To Fail banks have paid out average bonuses of $130,000 per employee from 2009 through 2011. The average compensation is $350,000.

    •Wall Street banks reaped $102 billion of profits between 2009 and 2011, as Ben Bernanke bought their toxic debt and continues to loan them hundreds of billions at 0% interest.

    •Five million Americans lost their homes to foreclosure since 2008.

    •There will be at least 6 million more foreclosures in the next three years.

    •Consumer expenditures accounted for 69.7% of GDP in the 2nd quarter of 2008. After three years of supposed austerity consumer expenditures account for 70.7% of GDP.

    •Senior citizen savers are earning $400 billion less of interest income today than they were in the 2nd quarter of 2008, but don’t worry – Paul Krugman says that has only affected a couple senior citizens. These seniors need to embrace their poverty and learn to love the taste of cat food.

    •Real GDP went up by $73 billion in the 1st quarter. A full 70% of this increase was due to durable goods purchases by consumers. This increase was solely due to ALLY FINANCIAL (85% owned by the Federal Government) and the rest of the Wall Street banks peddling auto loans to subprime (aka deadbeats) borrowers.

    Our beloved leaders have done so much for so few while impoverishing so many. It makes me so proud to live in the corporate fascist states of America.

    The reality is that we have never left recession and are sliding deeper into an ultimate Depression"(snip)

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    Default Re: Weekend Commentary - We've Never Left the Recession

    with more commentary via MarketWatch ...


    (snip)"Mediocre GDP report even worse in the details

    Commentary: Final sales up less than 2% for 4th quarter in last 5

    WASHINGTON (MarketWatch) — It should not be a surprise to anyone that the U.S. economy continues to struggle. The evidence is all around us, but the hawks on the Federal Reserve are clinging to false hopes.

    The economy grew at a 2.2% annual rate in the first quarter of the year, down from a 3% growth rate in the last three months of 2011, the government estimated Friday. Read our full news coverage of the slowdown in U.S. growth.

    Growth of 2.2% is mediocre, but it’s worse than that once you peel away a few layers — about a fourth of the growth in gross domestic product was accounted for by a buildup in inventories, and half of it came from the building and selling of motor vehicles.

    Strip away the inventory growth, and final sales in the economy increased 1.6%, the fourth quarter in the past five that was below 2%. Although all the headlines report on the GDP numbers, the number to watch is final sales, because that gauges demand for our products, not merely how much we made.

    Consumers continue to outperform. Consumer spending rose at a 2.9% annual pace, the best in more than a year. Yet disposable incomes increased just 0.4%, the seventh quarter in a row in which spending growth outpaced income growth.

    You don’t need a Ph.D. from MIT — as Fed Chair Ben Bernanke in fact possesses — to know that’s not sustainable.

    Away from King Consumer, the rest of the economy is slowing. Business investment spending dropped 2.1%, the first decline since 2009. Spending by governments (federal, state and local) fell 3%, the sixth quarterly decline in a row.

    Let’s not get carried away too much by the gloom and doom. The economy IS growing, even if it’s not as fast as we’d like. The economy has grown by nearly 7% since depths of the recession in 2009.

    Unfortunately, final sales have risen by just 4.7% over that period. And final sales to domestic purchasers (what Americans — not foreigners — bought) are still below pre-recession levels."(snip)

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    Default Re: Weekend Commentary - We've Never Left the Recession

    This has been going on for a long time now......

    http://en.wikipedia.org/wiki/GDP_deflator
    The country has been looted.

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    Default Re: Weekend Commentary - We've Never Left the Recession

    ^^^ if you're referring to the fact that the 'official' BLS calculated GDP deflator vastly understates real price inflation, and thus overstates REAL GDP, you are obviously correct. The ShadowStats annual GDP growth comparison graph above clearly shows the effect of BLS 'adjustment factors'.

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    Default Re: Weekend Commentary - We've Never Left the Recession

    much more analysis now available on the most recent US GDP report ... from


    (snip)"GDP Miss Far Bigger Than Announced; Real GDP is 0% Using More Reasonable Deflator

    The Advance Estimate for Q1 GDP came in at 2.2%, down from 3.0% in the previous quarter, and below most mainstream media estimates of 2.5%.

    However, my friend BC notes ....


    The GDP deflator is reported to have averaged 1.2% annualized in the past 2 qtrs. Had the trend rate from '11 persisted, the deflator would have subtracted 2.6% annualized from real GDP, resulting in a 2-qtr. growth of real GDP of 0%.

    ECRI's Achuthan would appear correct that a recession were imminent instead of looking like a dummy.

    Rick Davis at the Consumer Metric Institutes makes a similar calculation."


    In their "advanced" estimate of the first quarter 2012 GDP, the Bureau of Economic Analysis (BEA) found that the annualized rate of U.S. domestic economic growth was 2.20%, down more than three-quarters of a percent from the fourth quarter of 2011. The vast bulk of the downturn was in commercial activities, with both fixed investments and inventories lowering the headline number substantially. Consumer spending on both goods and services improved slightly, and the ongoing contraction in governmental spending moderated somewhat. The BEA's bottom-line "real final sales" improved about a half-percent to an annualized growth rate of 1.61% -- hardly robust and certainly not the kind of numbers we would expect to see nearly three years into a recovery.

    Once again the BEA has used "deflaters" that will strain the credibility of the public, especially if they buy gasoline. To correct the "nominal" data into "real" numbers the BEA assumed that the annualized inflation rate during 1Q-2012 was 1.54%. As a reminder, lower "deflaters" cause the reported "real" growth rates to increase -- and once again very low seasonally adjusted BEA inflation "deflaters" have been the headline number's best friend. If the raw "nominal" numbers were instead "deflated" by using the seasonally corrected CPI-U calculated by the Bureau of Labor Statistics (BLS) for the same time period, nearly the entire headline growth rate vanishes -- and the resulting growth rate would have been a minuscule 0.08% with "real final sales" contracting.

    And real per capita disposable income actually shrank during the quarter shrank at an annualized -0.27% rate (from $32,699 per capita to $32,677 per capita) -- and it remains lower than it was 5 quarters ago. -- even using the BEA's optimistic "deflaters." Real-world households likely felt the pinch even more.
    (snip)


    (snip)"GDP Trends

    •Average growth since 1945 is 3.3%
    •Linear regression says growth is trending lower at 2.1%
    •Over the last 10 years, growth averages a mere 1.7%

    Take a good look at the last decade. The US only managed 1.7% growth in the biggest housing boom in history followed by the biggest multi-trillion dollar global stimulus effort in world history.

    Three years into a recovery, growth (if you believe preposterous deflators) is a mere 2.2% but only 0% if you don't
    . Moreover, with parts of Europe in an outright depression, with even Germany and the UK in recession, and with China slowing significantly, the odds the US economy decouples for too much longer is now approaching zero.

    I think the ECRI has its recession forecast reasonably correct. However, it may take a well-deserved GDP revision (likely after the next election) to prove it.

    Mike "Mish" Shedlock"(snip)

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