So, where is this recession any way? Isn’t the economy supposed to actually “contract” during one or is the news definition “not growing as fast as we want it?”. Q2 GDP was up 1.9%.
Correct me if I am wrong but we have not even had a single quarter of negative growth yet much less the two in a row that is required to be “in recession”. Unless of course the definition changed and no one told me.
Why are we so fixated on the need to be in recession? I know why the media does it, they need extremes. Without the words “crisis, bubble, recession, meltdown, collapse, turmoil, and speculators”, CNBC would have nothing to talk about all day. We have a daily “crisis” on TV and if you only watched the tube and never actually went out into thew world, you’d be convinced it was coming to an end.
Take a look at the following papers. The NY Times and LA Times paint a doom and gloom scenario? Anyone have a political agenda?
What gets me is the people who ought to know better who are out there stumping for something that has not even begun yet. Q2 GDP growth was better than Q1 and Q3 looks just as good.
This has been going on since January. Back then we “were in recession” and here we are 8 months later now and the economy is still growing. I know folks are in the prediction game and someone has to make the early call but enough is enough. If you predicted we were actually in recession in January or February or March for that matter, step up and admit you were wrong.
You do not get points if we actually slip into one in January of next year for “seeing down the road”. You get nothing. What is the saying, “even a broken clock is right twice a day”. Believe it….
Banks and housing are hurting. Shareholders of Citigroup (C), Washington Mutual (WM) and even good banks like Wells Fargo (WFC) and Bank of America (BAC) have had a year of pain. Shareholders of builders like Toll Brothers (TOLL) and Centex (CTX) probably think banks shareholders do not what paint is.
None of that means we are in recession. Just that some companies made some very bad choices (as did homeowners). Time to pay the piper.
Is the economy optimal now? Of course not. It is also not nearly as bad as some folks want you to think it is.
Disclosure (“none” means no position):Long WFC, C, None
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One reply on “GDP….Still Growing….Still No Recession….”
I think you’re right about the possibility of the media having an agenda. If the media can create the perception that we’re in a recession, they can probably wind up blaming it on Bush, Republicans, the war in Iraq, evil oil companies, etc.
I also think that a lot of people out there have never really experienced a BAD recession or have just forgotten how a BAD recession feels. I think you’d have to go back to the 70s for an example of really crappy times. Thus, people feel like we’re in a recession simply ’cause things are not as great as they once were. It’s all relative to what people think is normal economic times.
This period that we’re in right now will hopefully force people to adjust their perceptions of what a normal economy feels like. We won’t be able to spend more than we save forever. And I don’t see how we can allow our trade deficit to continue indefinitely…
Anyways, good post.