Here Comes The Double Dip Pt. 2

[OilFinder2]

Consumer Sentiment Jumps to Beat Forecast in January

Americans showed greater optimism about potential improvements in the job market in January, pushing consumer confidence to its highest level in nearly a year, a survey released on Friday reported.

The Thomson Reuters/University of Michigan's final reading on the overall index on consumer sentiment rose to 75.0 from 69.9 the month before. It was the highest level since February 2011.

That was better than the preliminary January reading of 74.0 and topped the median forecast of 74.1 among economists polled by Reuters.

"The recent gains in confidence are now critically dependent on continued gains in employment," survey director Richard Curtin said in a statement.

"As long as modest employment gains are forthcoming, the data suggest real consumer spending will post a gain of 2.1 percent in 2012."

[...]

[TheAntiDoomer]

but when one looks at the components, where a whopping 1.94% of the upside was attributable to a rise in inventories as restocking took place. And as everyone knows in this day and age a spike in inventories only leads to sub-cost dumping a few months later. In other words, the economy grew at a 0.8% pace ex inventories. Yet for all intents and purposes, this is considered "growth."

Typical Zerohedge dishonesty. In Q3, inventories *subtracted* 1.35% from GDP, but funny, I didn't hear them telling everyone that GDP "really" grew 3.15%.

What do you expect oily? Mish, "Tyler douchebag Durden", and denninger are all leveraged in doom. Doomers go their for their daily dose of doom, if it's not there they lose their business in hits. Thus these guys Will NEVER admit the economy is improving, it's just bad buisness for them. Add to that they are mostly right wing loons who are motivated to see the economy fail this year to hurt Obama.

[AgentR11]

The economy really needs to improve without growth, but all our metrics are based upon measuring growth. Wish I had a good substitute that would measure what I want to know, but I've yet to come up with one.

Worse, is measuring growth in a currency that is still under heavy, artificial manipulation. So how do you pull the effect from the currency manipulation out, but still leave a meaningful piece of information. Commodities are the same screwed up problem right now as well, with a lot of international pressures pulling and pushing on them outside of their natural commercial / investment purposes.

[rangerone314]

but when one looks at the components, where a whopping 1.94% of the upside was attributable to a rise in inventories as restocking took place. And as everyone knows in this day and age a spike in inventories only leads to sub-cost dumping a few months later. In other words, the economy grew at a 0.8% pace ex inventories. Yet for all intents and purposes, this is considered "growth."

Typical Zerohedge dishonesty. In Q3, inventories *subtracted* 1.35% from GDP, but funny, I didn't hear them telling everyone that GDP "really" grew 3.15%.

What do you expect oily? Mish, "Tyler douchebag Durden", and denninger are all leveraged in doom. Doomers go their for their daily dose of doom, if it's not there they lose their business in hits. Thus these guys Will NEVER admit the economy is improving, it's just bad buisness for them. Add to that they are mostly right wing loons who are motivated to see the economy fail this year to hurt Obama.

Kind of short-sighted, seeing how if the Repubs help keep the economy in the toilet, it is likely to STILL be in the toilet when THEIR candidate is up for re-election in 2016.

[dorlomin]

The gloom at Davos
Cannot grow faster than the debt.
No one has any clear solutions.
Optomists think we will begin to clear the wreckage by 2017.

[Daniel_Plainview]

Denninger asks whether the GDP numbers are "what they appear," while Mish suggests that the GDP multiplier of 0.4% is absurd and preposterous. With negative real interest rates, the economy should be going gang-busters. What we see instead is an eroding, anemic GDP growth.

In any case, the GDP data shows that the economy is on course for a double dip, and that the USS Cornucopia is sinking ... sinking ... sinking ...



And the Euro-zone crisis has only just begun.

[Lore]

GDP has little relationship to the economic status of the ordinary citizen. Average real income has been and remains stagnant for most Americans.

[Plantagenet]

Average real income has been and remains stagnant for most Americans.

Actually no.

Incomes did stagnate for a decade, but things have recently gotten even worse. Over the last few years millions of people have fallen into poverty and average real incomes of Americans have been dropping.

average US incomes are dropping now under Obama

[AgentR11]

The real story is that incomes cohorts are bifurcating; this makes the average & mean computations disguise the reality that is felt by those on the losing side. If you're on the losing side, you're likely of the opinion that you are being horribly, and unjustly reamed by the economy; while if you're on the winning side, things honestly look pretty darn comfortable.

hit replay on my generic 80/20 hypothesis here.

[SeaGypsy]

Methinks you are very close to right on the money for the forseeable future Agent. Even with the economy tanking and dollar likely to lose reserve status this year, the 20% might be cut in half (resource economics), the 1% become 1.2% (carrot value) the rest decide between lining up as cannon fodder, basic production/ ration jobs or rebellion likely followed by death or internment in a FEMA security wing en route to either Gitmo or re-education (stick value).

[careinke]

Methinks you are very close to right on the money for the forseeable future Agent. Even with the economy tanking and dollar likely to lose reserve status this year, the 20% might be cut in half (resource economics), the 1% become 1.2% (carrot value) the rest decide between lining up as cannon fodder, basic production/ ration jobs or rebellion likely followed by death or internment in a FEMA security wing en route to either Gitmo or re-education (stick value).

Do you really think the dollar will lose reserve status this year? If so, it is game over for empire US, and we should all vote for Ron Paul, because he is the only one with a sane plan to handle it.

[Cog]

The dollar will lose its reserve status no matter who is in the White House. Just a matter of time now.

[careinke]

The dollar will lose its reserve status no matter who is in the White House. Just a matter of time now.

I agree, but once it happens, who do you really want in office?

[Cog]

Mitt Romney

[TheAntiDoomer]

I'm going to assume cog is a Mormon. That's the only way I can see someone supporting A douchebag like Gordon Gekko Romney.

[Lore]

Average real income has been and remains stagnant for most Americans.

Actually no.

Incomes did stagnate for a decade, but things have recently gotten even worse. Over the last few years millions of people have fallen into poverty and average real incomes of Americans have been dropping.

average US incomes are dropping now under Obama

Which is still an income level that has stagnated for decades, regardless of Presidential leadership. While it's convenient to blame our politicians, it really shows a lack of understanding as to the depth of the problem.

Since 1980, U.S. gross domestic product (GDP) per capita has increased 67%, while median household income has only increased by 15%. An economic recession will normally cause household incomes to decrease, often by as much as 10%.

Median household income is a politically sensitive indicator. Voters can be critical of their government if they perceive that their cost of living is rising faster than their income. Figure 1 shows how American incomes have changed since 1970. The last recession was the early 2000s recession and was started with the bursting of the dot-com bubble. It affected most advanced economies including the European Union, Japan and the United States.

The current crisis began with the bursting of the U.S. housing bubble, which caused a problem in the dangerously exposed sub prime-mortgage market. This in turn has triggered a global financial crisis. In constant price, 2010 American median household income is only 0.75% higher than what it was in 1989. This corresponds to a 0.04% annual increase over a 21-year period. In the mean time, GDP per capita has increased by 32.5% or 1.35% annually.

http://en.wikipedia.org/wiki/Median_household_income

If we plumb the depths a little farther we can see where corporate America has slowed wage growth while improving productivity through automation and outsourcing. We have exacerbated the current recession in real income even farther by cutting government contract employment and wages.

The end result is GDP has risen over the last twenty years while the average American has seen no growth and has been completely disconnected from the benefits.

Translation, Wall Street fat cats are getting theirs while the consumer gets to pay the bill.

[Plantagenet]

it's convenient to blame our politicians...

Actually, its convenient for you to pretend everything in DC is perfect while you make excuses for our sleazy and/or incompetent politicians and their failure to take steps to reform our government, put together intelligent economic policies to help the private sector grow, or craft an energy policy to deal with peak oil.

Its just weird that you would suggest that there is something wrong with criticizing politicians. Do you live outside the USA? Here in the USA its considered a basic civil right and practically a national past-time to criticize politicians.


Politicians aren't saints, you know.

[AgentR11]

The dollar will lose its reserve status no matter who is in the White House. Just a matter of time now.

I agree, but once it happens, who do you really want in office?

I doubt it matters much really. Personally, I think reserve status has been a pretty strong negative for quite a while now. Made some easy pleasures cheaper I suppose, but it has beat the snot out of a lot of the manufacturing side of the economy. Ditch the reserve status, force the Chinese to let the renminbi float, we'll eat their lunch.

Bob Americana, who thinks he's middle class, may be in for a modest wake up call; but overall, "its a good thing".

[Lore]

it's convenient to blame our politicians...

Actually, its convenient for you to pretend everything in DC is perfect while you make excuses for our sleazy and/or incompetent politicians and their failure to take steps to reform our government, put together intelligent economic policies to help the private sector grow, or craft an energy policy to deal with peak oil.

Where did I say Washington is perfect? The evidence that our politicians are sleazy and incompetent only points to them being the handmaidens of the plutocracy that we Americans allowed to let develop.

Since government doesn't create jobs you're pinning the tail on the wrong donkey. They can influence investment only up to a certain point in this so called capitalist free market system. So far, in eleven years, after treating corporations to positive incentives we have not seen that benefit trickle down to the average wage earner. Instead corporations have been bailed out, allowed to ditch workers and take their wealth else ware off the backs the US worker.

Its just weird that you would suggest that there is something wrong with criticizing politicians. Do you live outside the USA? Here in the USA its considered a basic civil right and practically a national past-time to criticize politicians.

Politicians aren't saints, you know.

It's a venerable old past time to criticize politicians and one that their handlers hope to continue to instigate. I for one refuse to play the fool about where to place the lions share of the blame. Shouting at clouds will get you no where other then to play into their game. You're being exactly the kind of political, sycophantic ideologue they enjoy.

[OilFinder2]

In any case, the GDP data shows that the economy is on course for a double dip, and that the USS Cornucopia is sinking ... sinking ... sinking ...

Hmmm, let's see ...

Posted Aug 15, 2011

If you have any doubt that we're still in a depression (or heading into a double-dip, depending on your ingestion of koolaid) ... then STAY TUNED ...

Posted June 15, 2011

We'll likely see a double-dip without QE3.

Posted May 5, 2011

MarketWatch: Double-dip recession is now undeniable

Posted April 30, 2011

These price increases are happening despite the fact that the US economy is clearly teetering on the brink of a double-dip recession ...

Posted January 13, 2011

Jobless claims soar by 35,000 to 445K as double-dip takes foothold

Posted Nov 10, 2010

The double dip -- already a rare phenomenon -- is now entering an unprecedented free-fall.

Posted Feb 18, 2010

The risk of a double-dip recession – or worse – is growing by the day

Sooooo ... it's been nearly TWO YEARS since this double-dip has been predicted to be imminent. Inquiring minds want to know: When is it going to arrive?!?!?