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Old 02-07-2008, 10:18 PM   #41
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Yeah, but isn't that what they said about 2001 (when it was occurring)?
I can't remember that far back...

Housing peaked in 2005-2006; other troubles now rearing their ugly heads were foreseeable as well. So I agree with the proposition that the economy was softening, 3Q GDP notwithstanding, and inflation was and is a possibility. But, by definition, there was no recession last year. We could be in one now though...
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Old 02-08-2008, 08:28 AM   #42
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In all honesty, I believe that we're in the midst of a recession already (for the past 6-12 months).
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The economy grew every quarter last year.
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Yeah, but isn't that what they said about 2001 (when it was occurring)?
I guess it could be, but determining whether or not we're in a recession isn't something that can be debated. It's easy to prove your statement false. According to Wikipedia, a Recession is "a decline in a country's GDP for two or more successive quarters of a year."

The GDP numbers for Q4/07 are in: 0.6%. Since a recession requires 2 consecutive quarters of negative growth, and the most recent quarter was admittedly small, but was still positive, then we by definition cannot possibly be in a recession right now.

Like I said, there's really nothing to debate. The facts do not fit the definition. We are not yet in a recession.

You can say "our economy stinks" if you want, and that might be true, but we're not in a "recession." It has a real concrete meaning, and the current state of the economy does not meet the criteria.
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Old 02-08-2008, 09:10 AM   #43
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I guess it could be, but determining whether or not we're in a recession isn't something that can be debated. It's easy to prove your statement false. According to Wikipedia, a Recession is "a decline in a country's GDP for two or more successive quarters of a year."

The GDP numbers for Q4/07 are in: 0.6%. Since a recession requires 2 consecutive quarters of negative growth, and the most recent quarter was admittedly small, but was still positive, then we by definition cannot possibly be in a recession right now.

Like I said, there's really nothing to debate. The facts do not fit the definition. We are not yet in a recession.

You can say "our economy stinks" if you want, and that might be true, but we're not in a "recession." It has a real concrete meaning, and the current state of the economy does not meet the criteria.
OK, according to the graphs on this webpage: http://www.data360.org/graph_group.a...h_Group_Id=149
We would have had 2 consecutive quarters of negative growth.
Look at the lower right graph which shows GDP growth rate (the red line is the real GDP growth rate). So, it appears that the 2 consecutive quarters would have been April 2006 & July 2006.
So I was off by about 6 months.
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Old 02-08-2008, 09:43 AM   #44
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I read someplace it takes six months to gather the figures to determine real growth. So we never know if we are in a recession until six months into it. Is this correct?
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Old 02-08-2008, 10:01 AM   #45
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I read someplace it takes six months to gather the figures to determine real growth. So we never know if we are in a recession until six months into it. Is this correct?
I've heard the same.
If you look at the graph I noted above, it shows "real GDP growth" as being negative in Q2/Q3 of 2006.
Now, I'm wondering what the definition of "out of recession" is.
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Old 02-08-2008, 10:22 AM   #46
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I've heard the same.
If you look at the graph I noted above, it shows "real GDP growth" as being negative in Q2/Q3 of 2006.
Now, I'm wondering what the definition of "out of recession" is.
I may be stupid (I probably am) but I can't figure out where the real GDP growth drops negative on any of those charts on the page you link.

Here's one from when I click on the GDP growth graph...

http://www.data360.org/dsg.aspx?Data_Set_Group_Id=274

All of the bars seem to be pointing above the 0% line.

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Old 02-08-2008, 10:24 AM   #47
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You noticed that, too...
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Old 02-08-2008, 10:34 AM   #48
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I may be stupid (I probably am) but I can't figure out where the real GDP growth drops negative on any of those charts on the page you link.

Here's one from when I click on the GDP growth graph...

http://www.data360.org/dsg.aspx?Data_Set_Group_Id=274

All of the bars seem to be pointing above the 0% line.

I guess it depends upon your definition of the term "decline" related to GDP growth. Does that mean negative, or simply that real GDP growth was down for 2 consecutive quarters?
According to this: decline - Definitions from Dictionary.com
Definition #14 states:
14.a downward movement, as of prices or population; diminution: a decline in the stock market.

I see two red lines consecutively less than the previous one starting in April 2006.
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Old 02-08-2008, 10:38 AM   #49
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Not less positive growth; negative growth!!

Shrinkage...
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Old 02-08-2008, 10:41 AM   #50
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I guess it depends upon your definition of the term "decline" related to GDP growth.
No it doesn't.

No offense, but the definition is clear. You simply misunderstand it.

"Negative" means below zero. In the context of GDP, it means negative. It means the economy shrank, not that the "growth slowed." It means that the GDP in 1 quarter was less than the GDP in the previous one. Which means the change was negative. We need that two happen for 2 quarters in a row for it to be a recession.

In the graphs you showed, the GDP got consistently bigger, every period. It never shrank at all last year. Thus, we cannot possibly be in a recession right now. From each period to the next in the graph you posted, the GDP got bigger.

Like I said, there is no room for opinion or interpretation here. The numbers are right there, and the definition is clear. "Negative" means less than 0. The growth in Q4/07 was 0.6%. That's still positive. The economy grew (albeit slowly). Thus, no recession.

I really don't know how to make it any clearer than that.
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Old 02-08-2008, 10:44 AM   #51
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I guess it depends upon your definition of the term "decline" related to GDP growth. Does that mean negative, or simply that real GDP growth was down for 2 consecutive quarters?
According to this: decline - Definitions from Dictionary.com
Definition #14 states:
14.a downward movement, as of prices or population; diminution: a decline in the stock market.

I see two red lines consecutively less than the previous one starting in April 2006.
I suppose it hasn't been laid out correctly. From Wikpedia for Recession: "In macroeconomics, a recession is a decline in a country's gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year."

No negative real growth, as evident from the graph.

From your Dictionary.com reference, I would posit that you're not interpreting it correctly.

GDP is not yet on a downward slope.

Say you have a dollar. The next month you have $1.10. The next month you have $1.11. The next month it's $1.14. The next month it's $1.15.

The growth graph would look similar to the GDP... you couldn't say your money ever declined, though. You ended each month with more than you started.

The next month it's $1.13.

Now, you had a decline... negative growth. It went down 2 cents from your starting value.
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Old 02-08-2008, 10:49 AM   #52
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Of course, all of this is rendered moot when a year or two from now, after the recession is over, someone goes back and revises the figures to show that we WERE in a recession after all, but thank god we got through it without anyone realizing it until it was over...
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Old 02-08-2008, 10:50 AM   #53
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Now, to be fair, if GDP falls in H1 of 2008 and we're solidly in a recession (Q1 and Q2 both show negative GDP), then we could look back in Q3 and say "Yep, that there recession started in January". However, any statements around recession right now is either speculation, fear mongering, or both. If you say it, it's speculation, if you hear it on tv then it's fear mongering ;-)

Of course, by the time Q4 hits, Bush will have cancelled the elections and McCain will be in the middle of marching his army on Washington in an attempt to sieze power so it's all sort of a moot point.
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Old 02-08-2008, 10:52 AM   #54
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No it doesn't.

No offense, but the definition is clear. You simply misunderstand it.

"Negative" means below zero. In the context of GDP, it means negative. It means the economy shrank, not that the "growth slowed." It means that the GDP in 1 quarter was less than the GDP in the previous one. Which means the change was negative. We need that two happen for 2 quarters in a row for it to be a recession.

In the graphs you showed, the GDP got consistently bigger, every period. It never shrank at all last year. Thus, we cannot possibly be in a recession right now. From each period to the next in the graph you posted, the GDP got bigger.

Like I said, there is no room for opinion or interpretation here. The numbers are right there, and the definition is clear. "Negative" means less than 0. The growth in Q4/07 was 0.6%. That's still positive. The economy grew (albeit slowly). Thus, no recession.

I really don't know how to make it any clearer than that.
Please accept my apologies as I was using this quote from the same Wikipedia article you mentioned: "An alternative, less accepted definition of recession is a downward trend in the rate of actual GDP growth".
While I'm by no means an economics major (not even close), my interpretation of this text was not off.
If you look at the chart, you will see a clear "downward trend in the rate of actual GDP growth" (i.e. the red or blue lines for April 2006 & July 2006 in comparison to January 2006).
I can see your point.
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Old 02-08-2008, 10:56 AM   #55
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Of course, all of this is rendered moot when a year or two from now, after the recession is over, someone goes back and revises the figures to show that we WERE in a recession after all, but thank god we got through it without anyone realizing it until it was over...
That too was in the back of my mind.
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Old 02-08-2008, 10:58 AM   #56
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Now, to be fair, if GDP falls in H1 of 2008 and we're solidly in a recession (Q1 and Q2 both show negative GDP), then we could look back in Q3 and say "Yep, that there recession started in January". However, any statements around recession right now is either speculation, fear mongering, or both. If you say it, it's speculation, if you hear it on tv then it's fear mongering ;-)

Of course, by the time Q4 hits, Bush will have cancelled the elections and McCain will be in the middle of marching his army on Washington in an attempt to sieze power so it's all sort of a moot point.
But artificially inflating GDP growth through an influx of rebates and more spending doesn't count?
Truth be told, I'm not completely sure how GDP growth is calculated.
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Old 02-08-2008, 11:02 AM   #57
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But artificially inflating GDP growth through an influx of rebates and more spending doesn't count?
Well, no one has received a check yet, and there's only an assumption on what people will do with said check.

And, sending checks to people in hopes they spend them to keep the economy out of recession would probably be regarded as a Keynesian economic move. If it works, then it's a valid one to be sure.
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Old 02-08-2008, 11:04 AM   #58
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Please accept my apologies as I was using this quote from the same Wikipedia article you mentioned: "An alternative, less accepted definition of recession is a downward trend in the rate of actual GDP growth".
Apology accepted, but there's a reason it's the "less accepted" definition.
I'm not sure where Wikipedia got that information. Keep in mind that Wikipedia is edited and maintained by regular joes, and their fact-checking isn't always flawless.
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Old 02-08-2008, 11:06 AM   #59
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Well, no one has received a check yet, and there's only an assumption on what people will do with said check.

And, sending checks to people in hopes they spend them to keep the economy out of recession would probably be regarded as a Keynesian economic move. If it works, then it's a valid one to be sure.
Well, we haven't received it either. Although it appears we should get <strike>$1,200</strike>$2,400 according to what the news is saying.
And it might appear that we basically spent it, although not for Bush's reasons. We haven't updated our PC at home for over 7 years, and very nice laptops at BestBuy were particularly appealing to us (we ended up buying 3 of 'em). Granted, we already budgeted for this, but GDP could care less.
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Old 02-08-2008, 11:08 AM   #60
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Apology accepted, but there's a reason it's the "less accepted" definition.
I'm not sure where Wikipedia got that information. Keep in mind that Wikipedia is edited and maintained by regular joes, and their fact-checking isn't always flawless.
Yes, I know. Maybe I'll just go change it so my "less accepted" definition is no longer the less accepted definition.
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