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Old 09-20-2010, 06:31 PM   #21
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Should there not be job growth coming out of a recession? I don't call almost 10% unemployment a "recovery"...........
Yeah, not exactly. Trouble is, construction employment was a big driver before the SHTF, and "those jobs are going, boys, and they ain't coming back...".

IOW, those were artificial jobs, created by easy money.
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Old 09-20-2010, 06:57 PM   #22
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Hello W2R - Well I am not an economist but in my view, letting Lehman collapse (politics aside) was probably a mistake. As a consequence, many investors and entrepreneurs have lost much more than money - they have lost confidence in our financial system. So why would they chose to hire ?

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I can accept that. Still, the high unemployment figures are extremely distressing, whatever the cause.
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Old 09-20-2010, 07:16 PM   #23
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Posted on the NBER website:

The Business Cycle Dating Committee of the National Bureau of Economic Research met yesterday by conference call. At its meeting, the committee determined that a trough in business activity occurred in the U.S. economy in June 2009. The trough marks the end of the recession that began in December 2007 and the beginning of an expansion. The recession lasted 18 months, which makes it the longest of any recession since World War II. Previously the longest postwar recessions were those of 1973-75 and 1981-82, both of which lasted 16 months.

In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that month. A recession is a period of falling economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. The trough marks the end of the declining phase and the start of the rising phase of the business cycle. Economic activity is typically below normal in the early stages of an expansion, and it sometimes remains so well into the expansion.



Note the second paragraph. They are not saying the economy is good.
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Old 09-20-2010, 09:40 PM   #24
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Note the second paragraph. They are not saying the economy is good.
I don't think anyone said they were. They are just telling us that the last recession is over, and when it ended. That's all NBER does - identify beginnings and endings of expansions and contractions.

Just because we have a sluggish economy and sub-optimal growth, doesn't mean we are in a recession. Just because we have come out of a recession, doesn't mean the expansion can't be very, very slow.

It was a deep and prolonged recession. A huge number people were laid off. The financial system was shook up badly. It's no wonder that confidence is low and recovery is very slow.

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Old 09-22-2010, 09:05 AM   #25
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In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that month. A recession is a period of falling economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. The trough marks the end of the declining phase and the start of the rising phase of the business cycle. Economic activity is typically below normal in the early stages of an expansion, and it sometimes remains so well into the expansion. Note the second paragraph. They are not saying the economy is good.
I think it is all a political move........
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Old 09-22-2010, 09:17 AM   #26
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Should there not be job growth coming out of a recession? I don't call almost 10% unemployment a "recovery"...........

IMO, false thinking... There does not have to be job growth coming out of a recession... if we are having growth in GDP, we are not in a recession... in fact, we could be losing jobs and not be in a recession...


Our experience has been that after a recession things turn back to being good and the growth rate is high enough to get all the people that were laid off back to work and also add extra jobs to take the people that are entering the economy... IIRC, the number of people looking for a job grows by over 100,000 per month... so if we are not growing jobs faster than that we are having more unemployed workers even though the economy is growing...

So, again, no, job growth in not a 'requirement'...
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Old 09-22-2010, 09:22 AM   #27
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IMO, false thinking... There does not have to be job growth coming out of a recession...
This is true. But all that means is that coming out of a recession (according to common economic definition) does not necessarily mean most people feel a recovery, perhaps not for years. And I think that's the case here.

Very few people have reason to *feel* like it's no longer a recession, and in terms of consumer sentiment perception is reality.
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Old 09-22-2010, 10:07 PM   #28
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This is true. But all that means is that coming out of a recession (according to common economic definition) does not necessarily mean most people feel a recovery, perhaps not for years. And I think that's the case here.

Very few people have reason to *feel* like it's no longer a recession, and in terms of consumer sentiment perception is reality.
There is what real people "feel" which has personal and political implications. Then there is what economists "say" (i.e. the recession is over) which is a very different thing and presumably useful for reasons I don't know . . . Both statements are correct in their own way.
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Old 09-22-2010, 11:35 PM   #29
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This is true. But all that means is that coming out of a recession (according to common economic definition) does not necessarily mean most people feel a recovery, perhaps not for years. And I think that's the case here.

Very few people have reason to *feel* like it's no longer a recession, and in terms of consumer sentiment perception is reality.
Kind of like what Martyp said.... but I am not sure we are in a recovery either... unless it is either one of the other... there is real growth... real jobs are being created... people that had stopped looking for jobs are starting to look again.. I am not saying it is blowing and going... but for most people who are working you are not as worried about getting laid off right now... the ones who are not working (and want to) are the ones that feel like there is no recovery and to them that is true...
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Old 09-23-2010, 02:22 AM   #30
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I agree that it is not what you call it. The fact is that companies are not hiring and investors continue to be cautious. It is not a time to be taking risks and counting on growth.
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Old 09-23-2010, 01:07 PM   #31
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I agree that it is not what you call it. The fact is that companies are not hiring and investors continue to be cautious. It is not a time to be taking risks and counting on growth.
Thankfully, I was not planning on growth to make my upcoming retirement decision.
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Old 09-23-2010, 01:30 PM   #32
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Warren Buffet says the recession is not over, and he bases that on the fact that our pre-crash GDP is not back to where it was pre-crash..........
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Old 09-23-2010, 01:35 PM   #33
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Warren Buffet says the recession is not over, and he bases that on the fact that our pre-crash GDP is not back to where it was pre-crash..........
Buffett is not using the definition of "recession" as most commonly accepted by economists. Buffett's definition, though, is more "real world" feeling and is more in line with what people are truly perceiving about the economy.

For sure the "feeling of recession" is not over for most people, even though depending on one's economic definition, it may well have been technically over for a year or more by now.
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Old 09-23-2010, 02:10 PM   #34
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Warren Buffet says the recession is not over, and he bases that on the fact that our pre-crash GDP is not back to where it was pre-crash..........

Not the best measure, but looking at the 'real' numbers we are above where it was pre-crash... now, if you used the 'chained 2005 dollars' we still have a couple of more QTRs to go before we get there... and if we get there in 2 QTRs... most people will still be out of a job and will still not believe we are out of the recession....


Numbers from the gvmt... hope it looks good when I submit.... well... not..


(Seasonally adjusted annual rates)
GDP in billions of current dollars GDP in billions of chained 2005
2006q1 13,183.5 12,915.9
2006q2 13,347.8 12,962.5
2006q3 13,452.9 12,965.9
2006q4 13,611.5 13,060.7
2007q1 13,789.5 13,089.3
2007q2 14,008.2 13,194.1
2007q3 14,158.2 13,268.5
2007q4 14,291.3 13,363.5
2008q1 14,328.4 13,339.2
2008q2 14,471.8 13,359.0
2008q3 14,484.9 13,223.5
2008q4 14,191.2 12,993.7
2009q1 14,049.7 12,832.6
2009q2 14,034.5 12,810.0
2009q3 14,114.7 12,860.8
2009q4 14,277.3 13,019.0
2010q1 14,446.4 13,138.8
2010q2 14,575.0 13,191.5
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Old 09-23-2010, 02:47 PM   #35
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I think Buffet said per-capita GDP. Using that definition of "back to normal", it'll be another year or so.
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Old 09-23-2010, 02:53 PM   #36
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Not the best measure, but looking at the 'real' numbers we are above where it was pre-crash... now, if you used the 'chained 2005 dollars' we still have a couple of more QTRs to go before we get there... and if we get there in 2 QTRs... most people will still be out of a job and will still not believe we are out of the recession....
I suspect if we account for population growth use a "per capita" figure (probably more appropriate), we may well be in negative real GDP growth per capita territory since 2007.

And even if we're not, the recent trends have been for the wealth gains to be increasingly concentrated among the top 10% of households (not intending a political statement here), even a slightly rising GDP per capita can feel negative to most of the middle class. Put another way, we may be in an era where *average* household wealth and income are increasing, but *median* household wealth and income may still be falling.
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Old 09-24-2010, 08:42 AM   #37
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This does meet the dictionary definition. However, I believe it as much as I believe in Santa Claus, the tooth fairy & the Easter bunny.

Our town's monthly newsletter came yesterday. "Since 2008 approx 1000 SFR in our town have gone through of have filed for forclosure." I have lived here 45 years and we previously had NOT seen that many in any 10 year period.

NOTE: Not only am I 64 but I am also jewish.
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Old 09-24-2010, 08:54 AM   #38
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NOTE: Not only am I 64 but I am also jewish.
Is this a particularly deadly combination that I should try to avoid?
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