U.S. economy collapses in first quarter, but growing again

Comments (65)
JoeObserver wrote:

How can Yellen paint such a rosy picture on economy when the reality is just the opposite as the US GDP shrank the most since the records began. You gotta ask yourself are these guys out of touch or asleep on the wheel. Clearly multi trillion dollar fictitious QE money is useless. If printing money were the solution , Zimbabwe would have been richest country on earth. One can’t fool all people all the time, because reality will sooner bite.

Jun 25, 2014 9:10am EDT  --  Report as abuse
Bernie777 wrote:

Congress Fiddles while the country burns, unelect all 535!

Jun 25, 2014 9:11am EDT  --  Report as abuse
BlueOkie wrote:

And the bad news out of this Administration just keeps coming. We need to change Congress then the White House

Jun 25, 2014 9:18am EDT  --  Report as abuse
JustProduce wrote:

@Bernie777
I agree that he board of directors of the biggest company in the planet (the US) should be removed. But wouldn’t it make sense to start with the CEO?

Jun 25, 2014 9:23am EDT  --  Report as abuse

Jimmy Carter 2 got us here …time for a reboot….

Jun 25, 2014 9:27am EDT  --  Report as abuse
JustProduce wrote:

I have made this comment before only to be attacked by the likes of Bathking; still, it continues to hold truth. As long as the Fed does not de-leverage, the message is clear: there is no recovery.
Keep an eye on their balance sheet rather than their PR statements.

Jun 25, 2014 9:37am EDT  --  Report as abuse
BeRealistic wrote:

Calm down everyone, soon the blind lemmings USA and the Euro-interloper Bakhtin will be here to tell you how great this is and how obama single-handedly has saved the world…..from the golf course. All this and MS is still sending the old guard GOP back to DC…but only after parterning with the DNC to beat the challenger. Proof that the establishment GOP and DNC have little differentiation.

Jun 25, 2014 9:41am EDT  --  Report as abuse
JustProduce wrote:

I have made this comment before only to be attacked by the likes of Bathking; still, it continues to hold truth. As long as the Fed does not de-leverage, the message is clear: there is no recovery.
Keep an eye on their balance sheet rather than their PR statements.

Jun 25, 2014 9:42am EDT  --  Report as abuse
TheNewWorld wrote:

“In a second report, the department said orders for long-lasting U.S. manufactured goods fell 1.0 percent last month.”

We are shaping up for the Obama Recession. I remember the Democrats blasting John McCain and others in mid 2008 for not recognizing the failing economy. Are they going to blast all of these news reports for assuring us that the economy is strong when economic indicators pointed it was not?

Jun 25, 2014 10:10am EDT  --  Report as abuse
SaveRMiddle wrote:

Translation:

The unrevised data = meaningless guesses. Why bother? And who cares what “economists” projected? So lame.

Didn’t the first quarter also represent the end of the extended federal UI benefits?

A permanent wealth transfer (via the loss of living wage jobs) sold as temporary IS big enough to matter. No “all is so much better” article will send this consumer into The Mall or The Car Lot.

Jun 25, 2014 10:16am EDT  --  Report as abuse
Simplerman wrote:

Say it with me – RECESSION’s coming!!! Yay!

Alkaline, USAPrag??

Jun 25, 2014 10:22am EDT  --  Report as abuse
BeRealistic wrote:

Save, states “And who cares what “economists” projected?” – I have been talking about this for a long time. The media and political hacks would rather talk about forecasts, predictions, expectations, hopes, liklihoods, etc because they can paint whatever rosy picture they want. However, the reality is almost always that the predictions and forecasts are dead wrong and the truth is somewhere far removed from the fairytale “forward-looking” statements. It doesn’t stop the media and “experts” from turning right back around and making the same feel good predictions again though based on nothing remotely close to reality.

Jun 25, 2014 10:26am EDT  --  Report as abuse
unionwv wrote:

The continued changes in our economy are, IMO, the result of progressive – collectivist policies, which enhance the governmental- big business axis and burden small businesses, where the jobs are. Big business continues to eliminate jobs, by consolidation and employment of technology.

Note the big business contribution to tea party candidates’ defeat.

Libertarians time may come, after they recognize that bigness per se equals power which needs to be minimized, whether in business, labor unions, government, professional associations or whatever and organizes as a political party at the grass roots level in every political subdivision in the U.S.

Jun 25, 2014 10:38am EDT  --  Report as abuse
wilhelm wrote:

‘happy days are here again, the skies above are clear again, let’s sing a song of cheer again, happy days are here again!’

pay no attention to that man behind the screen, for I am the great and wonderful Oz — voice of Janet Yellen.

Jun 25, 2014 11:00am EDT  --  Report as abuse
BeRealistic wrote:

kenny….off his meds yet again with a rant that has nothing to do with the topic of discussion. How is life lived with so much hate?

Jun 25, 2014 11:01am EDT  --  Report as abuse
JustProduce wrote:

@brotherkenny4
????
You lost me.

Jun 25, 2014 11:02am EDT  --  Report as abuse

economy contracted at a much steeper pace than previously estimated in the first quarter to record its worst performance in five years, but…. there are indications that growth has since rebounded strongly…

really…well isn’t that nice, the worst performance in five years isn’t really all that bad. If you’re all in stocks anyway, and in charge of the money printing press. And again with the winter BS? I believe it’s summer now, so how long do you blame the winter?

Jun 25, 2014 11:18am EDT  --  Report as abuse
lottopol wrote:

An old economics joke is “A recession is when you are out of work. A depression is when I am out of work.” However, the differences between a recession and a depression are not simply how many people are unemployed. It is important for investors recognize and understand the significance of the differences between recessions and depressions.
The key difference between a recession and a depression is that a recession can be ended by monetary policy alone.

If every few years you got the flu and now you had a strep throat it would be incorrect and possibly dangerous to think that you just had a bad case of the flu this year. Over the last hundred years there have been numerous recessions but only two depressions, the depression of 1929-1941 and the depression that began in 2007. The symptoms of strep throat and scarlet fever may be similar to that of the flu or common cold. However, causes of the former are the streptococcus bacteria while influenza is viral. Hence, strep throat and scarlet fever require antibiotics which are useless against viruses. Likewise, believing that the depression that started in 2007 is just a severe recession is quite dangerous to both investors and policy makers. As long as many policy makers appear not to realize the distinctions between recessions and depressions, investors ignore those distinctions at their peril

The effects of the 2007 depression are much less severe than the 1929-41 depression because of safety-net benefits now provided. Consider the horrendous, though not uncommon situation of a household in 1932 comprised of elderly grandparents being supported by their working-age children with young children of their own, when the breadwinners became unemployed. The 1932 family would be destitute. Today the grandparents would have social security and Medicare benefits. Their working-age children could now collect unemployment benefits for up to 99 weeks. Additionally, the entire family could also be eligible for food stamps, Medicaid, rent subsidies, heating fuel subsidies, free school lunches and other benefits. The 1932 family might also have had a bank account in one of the many banks that failed and lost their savings. Today, Federal Deposit Insurance protects such bank accounts. You might say we are now in a depression with benefits.

The difference between a depression and a severe recession are not just semantic. Recessions occur when the Federal Reserve raises interest rates in an effort to slow down an overheated economy. Most importantly, recessions end when the Fed lowers interest rates. In a recession the pent-up demand for housing and durable goods means that monetary policy alone can cure the recession. Just as antibiotics can be effective against bacterial infections but not against viruses, monetary policy alone cannot end a depression. Furthermore, modest fiscal stimulus and the automatic stabilizers that can hasten the end of recessions cannot end a depression. There can be ups and downs in the unemployment rate during a depression. However, the unemployment rate remains elevated. It was 14.5% in 1940 and 9.7% in 1941.

If we are in a recession, economic activity will fully resume just from the monetary and fiscal stimulus that has already occurred. Ultimately interest rates will rise. However, if we are in a depression, even one with safety-net benefits that mitigate the hardships, interest rates will remain relatively low for decades as was the case in Japan and the USA of the 1930s, where only World War II ended the depression. The ideal investment for an extended period of low interest rates is agency mREITS.

Depressions occur after investment bubbles burst. In free-market capitalism, capital generates income for the owners of the capital which in turn is used to create additional capital. This is very good. Sometimes, it can be actually too good. As capital continues to accumulate, its owners find it more and more difficult to deploy it efficiently. The business sector generally must interact with the household sector by selling goods and services or lending to them. When capital accumulates too rapidly, the productive capacity of the business sector can outpace the ability of the household sector to absorb the increasing production.

The capitalists, or if you prefer, job creators use their increasing wealth and income to reinvest, thus increasing the productive capacity of the business they own. They also lend their accumulated wealth to other business as well as other entities after they have exhausted opportunities within business they own. As they seek to deploy ever more capital, excess factories, housing and shopping centers are built and more and more dubious loans are made. This is overinvestment. As one banker described the events leading up to 2008 – First the banks lent all they could to those who could pay them back and then they started to lend to those could not pay them back. As cash poured into banks in ever increasing amounts, caution was thrown to the wind. For a while consumers can use credit to buy more goods and services than their incomes can sustain. Ultimately, the overinvestment results in a financial crisis that causes unemployment, reductions in factory utilization and bankruptcies all of which reduce the value of investments.

If the economy was suffering from accumulated chronic underinvestment, shifting income from the non-rich to the rich would make sense. Underinvestment would mean there was a shortage of shopping centers, hotels, housing and factories were operating at 100% of capacity but still not able to produce as many cars and other goods as people needed. It might not seem fair, but the quickest way to build up capital is to take income away from the middle class who have a high propensity to consume and give to the rich who have a propensity to save (and invest). Except for periods in the 1950s and 1960s and possibly the 1990’s when tax rates on the rich just happened to be high enough to prevent overinvestment, the economy has generally suffered from periodic overinvestment cycles.

It is not just a coincidence that tax cuts for the rich have preceded both the 1929 and 2007 depressions. The Revenue acts of 1926 and 1928 worked exactly as the Republican Congresses that pushed them through promised. The dramatic reductions in taxes on the upper income brackets and estates of the wealthy did indeed result in increases in savings and investment. However, overinvestment (by 1929 there were over 600 automobile manufacturing companies in the USA) caused the depression that made the rich, and most everyone else, ultimately much poorer.

Since 1969 there has been a tremendous shift in the tax burdens away from the rich on onto the middle class. Corporate income tax receipts, whose incidence falls entirely on the owners of corporations, were 4% of GDP then and are now less than 1%. During that same period, payroll tax rates as percent of GDP have increased dramatically. The overinvestment problem caused by the reduction in taxes on the wealthy is exacerbated by the increased tax burden on the middle class. While overinvestment creates more factories, housing and shopping centers; higher payroll taxes reduces the purchasing power of middle-class consumers. …”
http://seekingalpha.com/article/1543642

Jun 25, 2014 11:35am EDT  --  Report as abuse
lottopol wrote:

An old economics joke is “A recession is when you are out of work. A depression is when I am out of work.” However, the differences between a recession and a depression are not simply how many people are unemployed. It is important for investors recognize and understand the significance of the differences between recessions and depressions.
The key difference between a recession and a depression is that a recession can be ended by monetary policy alone.

If every few years you got the flu and now you had a strep throat it would be incorrect and possibly dangerous to think that you just had a bad case of the flu this year. Over the last hundred years there have been numerous recessions but only two depressions, the depression of 1929-1941 and the depression that began in 2007. The symptoms of strep throat and scarlet fever may be similar to that of the flu or common cold. However, causes of the former are the streptococcus bacteria while influenza is viral. Hence, strep throat and scarlet fever require antibiotics which are useless against viruses. Likewise, believing that the depression that started in 2007 is just a severe recession is quite dangerous to both investors and policy makers. As long as many policy makers appear not to realize the distinctions between recessions and depressions, investors ignore those distinctions at their peril

The effects of the 2007 depression are much less severe than the 1929-41 depression because of safety-net benefits now provided. Consider the horrendous, though not uncommon situation of a household in 1932 comprised of elderly grandparents being supported by their working-age children with young children of their own, when the breadwinners became unemployed. The 1932 family would be destitute. Today the grandparents would have social security and Medicare benefits. Their working-age children could now collect unemployment benefits for up to 99 weeks. Additionally, the entire family could also be eligible for food stamps, Medicaid, rent subsidies, heating fuel subsidies, free school lunches and other benefits. The 1932 family might also have had a bank account in one of the many banks that failed and lost their savings. Today, Federal Deposit Insurance protects such bank accounts. You might say we are now in a depression with benefits.

The difference between a depression and a severe recession are not just semantic. Recessions occur when the Federal Reserve raises interest rates in an effort to slow down an overheated economy. Most importantly, recessions end when the Fed lowers interest rates. In a recession the pent-up demand for housing and durable goods means that monetary policy alone can cure the recession. Just as antibiotics can be effective against bacterial infections but not against viruses, monetary policy alone cannot end a depression. Furthermore, modest fiscal stimulus and the automatic stabilizers that can hasten the end of recessions cannot end a depression. There can be ups and downs in the unemployment rate during a depression. However, the unemployment rate remains elevated. It was 14.5% in 1940 and 9.7% in 1941.

If we are in a recession, economic activity will fully resume just from the monetary and fiscal stimulus that has already occurred. Ultimately interest rates will rise. However, if we are in a depression, even one with safety-net benefits that mitigate the hardships, interest rates will remain relatively low for decades as was the case in Japan and the USA of the 1930s, where only World War II ended the depression. The ideal investment for an extended period of low interest rates is agency mREITS.

Depressions occur after investment bubbles burst. In free-market capitalism, capital generates income for the owners of the capital which in turn is used to create additional capital. This is very good. Sometimes, it can be actually too good. As capital continues to accumulate, its owners find it more and more difficult to deploy it efficiently. The business sector generally must interact with the household sector by selling goods and services or lending to them. When capital accumulates too rapidly, the productive capacity of the business sector can outpace the ability of the household sector to absorb the increasing production.

The capitalists, or if you prefer, job creators use their increasing wealth and income to reinvest, thus increasing the productive capacity of the business they own. They also lend their accumulated wealth to other business as well as other entities after they have exhausted opportunities within business they own. As they seek to deploy ever more capital, excess factories, housing and shopping centers are built and more and more dubious loans are made. This is overinvestment. As one banker described the events leading up to 2008 – First the banks lent all they could to those who could pay them back and then they started to lend to those could not pay them back. As cash poured into banks in ever increasing amounts, caution was thrown to the wind. For a while consumers can use credit to buy more goods and services than their incomes can sustain. Ultimately, the overinvestment results in a financial crisis that causes unemployment, reductions in factory utilization and bankruptcies all of which reduce the value of investments.

If the economy was suffering from accumulated chronic underinvestment, shifting income from the non-rich to the rich would make sense. Underinvestment would mean there was a shortage of shopping centers, hotels, housing and factories were operating at 100% of capacity but still not able to produce as many cars and other goods as people needed. It might not seem fair, but the quickest way to build up capital is to take income away from the middle class who have a high propensity to consume and give to the rich who have a propensity to save (and invest). Except for periods in the 1950s and 1960s and possibly the 1990’s when tax rates on the rich just happened to be high enough to prevent overinvestment, the economy has generally suffered from periodic overinvestment cycles.

It is not just a coincidence that tax cuts for the rich have preceded both the 1929 and 2007 depressions. The Revenue acts of 1926 and 1928 worked exactly as the Republican Congresses that pushed them through promised. The dramatic reductions in taxes on the upper income brackets and estates of the wealthy did indeed result in increases in savings and investment. However, overinvestment (by 1929 there were over 600 automobile manufacturing companies in the USA) caused the depression that made the rich, and most everyone else, ultimately much poorer.

Since 1969 there has been a tremendous shift in the tax burdens away from the rich on onto the middle class. Corporate income tax receipts, whose incidence falls entirely on the owners of corporations, were 4% of GDP then and are now less than 1%. During that same period, payroll tax rates as percent of GDP have increased dramatically. The overinvestment problem caused by the reduction in taxes on the wealthy is exacerbated by the increased tax burden on the middle class. While overinvestment creates more factories, housing and shopping centers; higher payroll taxes reduces the purchasing power of middle-class consumers. …”
http://seekingalpha.com/article/1543642

Jun 25, 2014 11:35am EDT  --  Report as abuse
JamesChirico wrote:

Obamacare has let insurers take billions in spending from the economy. They have raised rates 40% while paying out less and will refund much of the overcharge after a year passes. Rates and deductibles went up, payouts went down tells you they have wildly overestimated their liabilities. By next year their rates will reflect actual payouts to hit the 15% admin. profit. Too bad when passed their was not a show cause clause for insurance rate increases. We spend 17% of GDP on medical costs, half paid by the government in medicare/medicaid disbursements. A 6% hit on spending dollars will cause a contraction. Congress and the media is all about telling you about the increases in insurer rates, tell you nothing about why.

Jun 25, 2014 11:35am EDT  --  Report as abuse
TheNewWorld wrote:

I point this out to Keynesians constantly. Government spending creates a false bubble. Remove the government spending, and the bubble pops. What we have seen since 2008 is a government and FED induced recovery through artificial stimulus. The FED has propped up Wall Street, and the government has poured a couple of extra trillion into the GDP. In the meantime, the true problems with the US economy are deep and troubling, and that is why many of us that are dubbed “Obama haters” are very skeptical of the reports coming out that the US has a strong economy.

The United States has the lowest employment participation rate since 1979. We have set a record for the highest percentage of households on food stamps. We have some how become happy with close to 7% unemployment. Underemployment is an issue. How can we have a strong economy when so many people are on very limited incomes? The fundamental problems with the private sector have not been addressed by this administration. Almost all of the stimulus has been in the public sector which does not contribute to the GDP and requires the private sector to generate the money to pay for the stimulus. After the government programs come to an end we come back to reality.

More and more economists are predicting another market crash, and this one is going to hurt worse than 2008. That will wipe out the retired people and crush the top 1%. The rest of us will be dealing with skyrocketing CPI inflation due to the EPA rules, and the mandates that have been delayed in the ACA in the next few years. Obama will probably be out of office when this all hits. He isn’t the only President who has kicked the can down the road, we have been doing it for over 3 decades. We have to deal with reality sooner or later.

Jun 25, 2014 11:36am EDT  --  Report as abuse
pyradius wrote:

It is fairly easy to destroy an economy (see Bush policies of wars and lowering taxes). Rebuilding is not quite so easy and anyone who thinks 1 man can resolve issues that largely rely on the private sector is naive and a fool, especially when policies that would lead to real growth are stifled and obstructed.

Guess what? Globalization is a double-edged sword. Constant outsourcing and elimination of local jobs and the ‘investor’ economy has ruined the middle and lower class, and lo and behold! The bulk of the wealth resides at the top. If the workers don’t have money, they don’t buy things, wow go figure!

Jun 25, 2014 11:36am EDT  --  Report as abuse
BeRealistic wrote:

“so how long do you blame the winter?” – Until it gets hot enough to blame summer…DUH!

Jun 25, 2014 11:38am EDT  --  Report as abuse
comitas7 wrote:

If Americans continue to vote for two corrupt; criminal; and incompetent parties who only offer the prospect of continued fleecing of the US then they deserve to suffer.

Jun 25, 2014 11:40am EDT  --  Report as abuse
SixthRomeo wrote:

Yes, everyone spent a hundred percent more on their fuel costs this past winter; truly gouged by the fraudulently high natural gas prices. When that comes to a hundred dollars more a month across a very long winter, that amounts to a great deal of money that wasn’t going to be spent on anything else. The extra money taken by share holders, for no reason other than greed, does not count in economic growth.

Jun 25, 2014 12:03pm EDT  --  Report as abuse
ineeditbad wrote:

No Surprise to me…I’m going Down, thanks to Government Lies…

Jun 25, 2014 12:06pm EDT  --  Report as abuse

Since the vast majority of new jobs replacing those lost in recent years are low-paid work and the cost of food and other essential services cost considerably more than they did even last year — despite artificially low inflation numbers used by economists and the government — it is likely GDP will at best remain flat or, more likely, continue to decline except in the repair industries which really aren’t factored into GDP growth.
The now slowly descending second leg of the Great Recession is accelerating its fall, something the GOP had hoped for in order to win elections, regardless of the injury it does to America.

Jun 25, 2014 12:48pm EDT  --  Report as abuse
sabrefencer wrote:

I hope everyone forgets partisanship and see’s what is happening to this country…the statistics touted by Obama and mal administration are currently mostly lies, the obamacare all lies, the IRS scandal and afterwards all lies, vets admin,.ambassador killed, immigration run pampant, promises made, lies..Holder in justice, allowing Obama to run rampant as a dictator…fire them both….then fire all those in the senate, that rubber stamped this crap….take back this country, thru our votes….impeach Obama and holder….start allover again…no more Obama, no more holder, no more Kerry, no more Clinton…no more bushes…we need new and qualified people..

Jun 25, 2014 1:02pm EDT  --  Report as abuse
KJackb wrote:

Economy “Growing Again” – Says who? The same economists that missed Q1 GDP by 5.7X’s their projection? All of that money that obamacare enrollment was supposed to generate didn’t happen! So, I’m guessing that the obama admin is already figuring out a way to count subsidies as economic activity and hence GDP growth…you cannot make this chit up.

Jun 25, 2014 1:37pm EDT  --  Report as abuse
TheNewWorld wrote:

@RudyHaugeneder

“The now slowly descending second leg of the Great Recession is accelerating its fall, something the GOP had hoped for in order to win elections, regardless of the injury it does to America.”

There is no doubt that the GOP will use this to try and get more seats and teh Presidency. Those of us who are third party however have been stating these policies are bad for the economy and have predicted these results. It is not hoping for the American economy to crash, it is a restatement that policies such as the new EPA restrictions, the proposed immigration reforms, and the ACA are going to do unspeakable damage to the economy while the stimulus programs that are spent on the public sector instead of the private sector are temporary measures that have little to no effect on the long term economic scene. If hiring 20 million teachers and paying them all six digit salaries with cadillac health care plans and retirment at age 55 created great economies, it would be done world-wide. It doesn’t. It requires increased taxes or debt loads, which will both drag the economy at some point.

No one is going to enjoy the pain that the Democrat policies are going to be putting us through. However, we will continue to point out the failures and miscalculations of the community planner so hopefully this never gets repeated again.

Jun 25, 2014 1:40pm EDT  --  Report as abuse
ConradU812 wrote:

Um….yeah. Isn’t this the same prediction that was made for the LAST quarter? Looks suspiciously like a cut-n-paste.

Jun 25, 2014 1:58pm EDT  --  Report as abuse
BeRealistic wrote:

KJackb, I agree. week after week, month after month, we have these media outlets and “experts” telling us how great they expect, forecast, hope, predict, etc the NEXT round(week/month) to be, yet at the end of nearly every round we get the same old “ooops, not yet, but we really, really mean it this time, we expect next month to get better”

Jun 25, 2014 2:10pm EDT  --  Report as abuse
tiktin wrote:

The defeat of the Tea Party in the primaries and the shrinking of the economy are related. With a majority of the people now getting government benefits, they are terrified that the Tea Party would take away their benefits. As more and more people are living off the government, fewer and fewer are engaged in productive labor. So the economy shrinks.

Jun 25, 2014 2:11pm EDT  --  Report as abuse
Travlnmn41 wrote:

Reuters…spin a little more for your master, Owebama.

Jun 25, 2014 2:30pm EDT  --  Report as abuse
Naksuthin wrote:

Steady, gloom and doomers.

3% economic contraction Is peanuts!!!

In the 4th quarter of 2008…weeks
before the flickering torch was passed from Bush to Obama the US economy
contracted a whopping 8.9%…the worst in post war history.

Remember those days???

When Bush turned over a battered economy to Obama The DOW had fallen to 8000
and the NASDAQ had plunged to 1500. If you had a 401K or were heavily
invested in stocks….you watched in horror as you lost HALF your wealth.

The country was in economic free fall.
Banks that had survived the Great Depression were going out of business,
Housing prices were falling like a rock as the bubble burst,
The unemployment rate was 7.8%…and heading up. In the same month that
Bush handed over the economy to Obama, 818,000 workers lost their jobs.
The US auto industry was on it’s knees begging for a bailout.
The Bush administration had to borrow 700 billion dollars from the taxpayers to
bail out the banks.
Newscaster started using the ominous words “2nd Great Depression”.

And where are we NOW…6 years later?

The worst recession in US history is over.
People are going back to work. One year after Bush handed over the
economy to Obama the US began adding jobs instead of losing them. The
unemployment rate is now 6.3% and headed down.
Banks are healthy and profitable again.
The US auto industry is the pride of the nation.
Housing prices are on the rise again.
Home building is up again.
The average rate of inflation for the 6 Obama years has averaged 1.6 percent vs
2.8 percent for 8 years of Bush. Good news for shoppers and savers.
Interest rates are low.
Consumer confidence is soaring.
Osama is Dead.
Terrorist are being droned to death.
And the stock market?
Well, The DOW is higher than it has ever been in it’s history. It’s
breaking records.
The NASDAQ has tripled since the closing days of the Bush administration.

6 years ago, with the country in economic chaos, None of us could not
have ever dreamed that our country would be where it is today. It was
unthinkable. Unimaginable.
Yet here we all are today….in a country that rose from the ashes
of economic disaster called the GREAT AMERICAN RECESSION that began in
2007….to become a vibrant growing healthy economy.

Jun 25, 2014 2:31pm EDT  --  Report as abuse
BeRealistic wrote:

There are so many flaws in your post I doubt you even have a real clue what is going on. Of course this is a cut and paste piece that you have no real understanding of. But I will touch on one thing “The US auto industry is the pride of the nation” – really, have you looked at GM lately? Ok, and your lead off statement about 3% bein peanuts. Your credibility stopped att hat pont, but then you just continue on to show just how shallow your grasp of the economy is. Sadly, it is people with your mindset, the low information and low cognizant voter that has gotten us into this mess.

Jun 25, 2014 2:46pm EDT  --  Report as abuse
DanAtlanta wrote:

And the right wing moronic banter continues.

Not a word out of them when the economy was growing quarter by quarter, year after year. But when we hit a stumble, for reasons that are easily explained, the Right Wing Banshee Wailing begins.

Notice they have nothing to say when we add private sector jobs for 50 months straight, except excuses.

When we bounce back in the 2Q, as we are poised to do, and we will, you’ll see how fast the Right Wingers shut up. Actually, I will expect that, as the economy continues to grow, right wingers will only point to the 1Q and say, “LOOK! That happened! Who cares if we came back! HERP DERP!”

Oh the stories they will tell decades from now when they examine how the right wing, anti-intelligence, anti-reason, people ruined a once great nation….

Jun 25, 2014 2:48pm EDT  --  Report as abuse
TheNewWorld wrote:

@Naksuthin

You forgot about all of the warnings that the Bush administration had made about the Housing crisis and nothing was done. These warnings were ignored by both the GOP and DNC houses and senates during his 8 years. They started in 2001 and are public record for all to view. These are the ones that the DNC House and Senate ignored.

2007
•August: President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying “first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options.” (President George W. Bush, Press Conference, the White House, 8/9/07)

•August: Senate Committee on Banking, Housing and Urban Affairs Chairman Christopher Dodd ignores the President’s warnings and calls on him to “immediately reconsider his ill-advised” position. (Eric Dash, “Fannie Mae’s Offer To Help Ease Credit Squeeze Is Rejected, As Critics Complain Of Opportunism,” The New York Times, 8/11/07)

•December: President Bush again warns Congress of the need to pass legislation reforming GSEs, saying “These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I’ve called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted. And the United States Senate needs to pass this legislation soon.” (President George W. Bush, Discusses Housing, the White House, 12/6/07)

2008
•February: Assistant Treasury Secretary David Nason reiterates the urgency of reforms, saying “A new regulatory structure for the housing GSEs is essential if these entities are to continue to perform their public mission successfully.” (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking, Housing And Urban Affairs, 2/7/08)

•March: President Bush calls on Congress to take action and “move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages.” (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08)

•April: President Bush urges Congress to pass the much needed legislation and “modernize Fannie Mae and Freddie Mac. [There are] constructive things Congress can do that will encourage the housing market to correct quickly by … helping people stay in their homes.” (President George W. Bush, Meeting With Cabinet, the White House, 4/14/08)

•May: President Bush issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further.

◦”Americans are concerned about making their mortgage payments and keeping their homes. Yet Congress has failed to pass legislation I have repeatedly requested to modernize the Federal Housing Administration that will help more families stay in their homes, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow state housing agencies to issue tax-free bonds to refinance sub-prime loans.” (President George W. Bush, Radio Address, 5/3/08)

◦”[T]he government ought to be helping creditworthy people stay in their homes. And one way we can do that – and Congress is making progress on this – is the reform of Fannie Mae and Freddie Mac. That reform will come with a strong, independent regulator.” (President George W. Bush, Meeting With The Secretary Of The Treasury, the White House, 5/19/08)

◦”Congress needs to pass legislation to modernize the Federal Housing Administration, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance subprime loans.” (President George W. Bush, Radio Address, 5/31/08)

•June: As foreclosure rates continued to rise in the first quarter, the President once again asks Congress to take the necessary measures to address this challenge, saying “we need to pass legislation to reform Fannie Mae and Freddie Mac.” (President George W. Bush, Remarks At Swearing In Ceremony For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/08)

•July: Congress heeds the President’s call for action and passes reform legislation for Fannie Mae and Freddie Mac as it becomes clear that the institutions are failing.

•September: Democrats in Congress forget their previous objections to GSE reforms, as Senator Dodd questions “why weren’t we doing more, why did we wait almost a year before there were any significant steps taken to try to deal with this problem? … I have a lot of questions about where was the administration over the last eight years.”

Jun 25, 2014 2:56pm EDT  --  Report as abuse
BeRealistic wrote:

More economic bad news, this story has disappeared from the pages unless you knew about it and do a search http://www.reuters.com/article/2014/06/25/us-usa-durable-goods-idUSKBN0F01BV20140625

Jun 25, 2014 2:58pm EDT  --  Report as abuse

How about the huge tax increases 1/1/14 (ACA, SS and income). Increasing taxes never spurs private growth.

Jun 25, 2014 3:11pm EDT  --  Report as abuse
Crash0866 wrote:

You…voted…for this…twice…

Jun 25, 2014 3:14pm EDT  --  Report as abuse
Crash0866 wrote:

Naksuthin
You are so detached and well trained

Jun 25, 2014 3:17pm EDT  --  Report as abuse
Crash0866 wrote:

1. Where’s the touchdown dance today?
2. Stop comparing and saying we are better off than 6 years ago
3. One more time…told you so…
4. Hope and Change is now Hosed and Changed
5. Good thing the Health Care thing got done. Who needs jobs?

Jun 25, 2014 3:19pm EDT  --  Report as abuse
AlkalineState wrote:

Hahaha. Look at all the conservatives suddenly believing the math again. Never mind that the method for calculating these stats has not changed in 42 years. Suddenly they are believers in numbers again. I’ll be bookmarking this comment page :)

Jun 25, 2014 3:40pm EDT  --  Report as abuse
joinamerica wrote:

Oh, and when is Reuters (or Lucia Mutikani) going to revise (downward) this optimistic claim about 2nd quarter growth? And will “surprise” be mentioned, and will we be told that the bad news is “unexpected”? Ms. Mutikani and the editor who signed off on this embarrassing “framing” of what is a terrible piece of economic data should serve to remind all of us how our media has a political agenda (hard left) and no sense of duty to America or Americans. They are untrustworthy.

Jun 25, 2014 3:52pm EDT  --  Report as abuse
BeRealistic wrote:

It’s not a matter of “believing” or not, it is a matter of reasonable analysis of whether the numbrs match reality. It just so happens that today, it seems the media and “experts” have decided to side with reality. I for one have never argued the method of deriving the stats, just the current relevance, or rather lack thereof.

And btw, this is a big picture of the economy, not a single cherry picked stat that you and others like to brag on.

Jun 25, 2014 4:06pm EDT  --  Report as abuse
BeRealistic wrote:

Crash, sadly, though I understand where you are coming from, I don’t think any one voted for “this”. They voted for handouts, they voted for skin tone, they vote for taking “the man” down a notch, they voted for that warm fuzzy that sooothes their conscience, they voted for soothing their unfounded “white guilt”, they voted against whatever perceived evil they saw in the “other side”. They voted for a lot of things (comapetence, ability, and qualification not among them), but no one wanted this. Sadly, too many are too proud to admit they were so easily fooled, twice, and now will support and defend their mistake to the very end.

Jun 25, 2014 4:12pm EDT  --  Report as abuse
111Dave111 wrote:

The economy was held back by an unusually cold winter (1),
the expiration of long-term unemployment benefits(2a) and cuts to food stamps (2b), which curbed consumer spending.
It was also weighed down by a slowdown in the pace of restocking by businesses (3).

Looks like the man made causes were the US Congress (A) and Businesses (B).

Jun 25, 2014 4:14pm EDT  --  Report as abuse
TomMariner wrote:

Write this on a rock — If you attack business to win elections, your economy will collapse.

Governments Govern, Employers Employ.

Jun 25, 2014 4:24pm EDT  --  Report as abuse
111Dave111 wrote:

BeRealistic:
“so how long do you blame the President Barack Obama?” –
Until 2016, when you blame President Hillary Clinton…DUH!

Jun 25, 2014 4:24pm EDT  --  Report as abuse
TheNewWorld wrote:

@AlkalineState

“Hahaha. Look at all the conservatives suddenly believing the math again. Never mind that the method for calculating these stats has not changed in 42 years. Suddenly they are believers in numbers again. I’ll be bookmarking this comment page :)”

Actually this reinforces what we say everytime the initial numbers come out. It has been revised from anemic growth, to a 1% loss in the GDP, and now close to a 3% loss in GDP. It is the same dance every single quarter now. So I will continue not believe the initial reports and wait 3 months later until they finally correct their numbers.

Jun 25, 2014 4:26pm EDT  --  Report as abuse
BeRealistic wrote:

Stop spinnng Dave, you’re making all of us dizzy. Oh, btw, the economy is all man-made.

Jun 25, 2014 4:29pm EDT  --  Report as abuse
BeRealistic wrote:

Dave, is your post supposed to make sense? First, if you you quotes, it is supposed to indicate a quote, which I never made in this case. Second, it is right to blame the person at teh top, so yes, I will blame obama and the rest of the failed leftist policies that has put us here, until 2016. If it is Hillary, then there will be more failed policies and yes, she will get the blame. However, if it is someone competent and qualified like say, Ben Carson or Allen West, then I would expect a gradual and accelerating turn around. But yes, they will still get the blame if blame is warranted

Jun 25, 2014 4:43pm EDT  --  Report as abuse
carlmartel wrote:

The US will go into recession. We had -2.9% GDP growth in 1Q 2014. The EU, our biggest trade partner, had GDP “growth” of -0.3% in 1Q 2014. US housing starts fell 9.2% in April and fell 6.5% in May. Housing permits fell 6.4% in May, so June housing starts will fall. GM has recalled 20 million cars. Oil is over $100 per barrel over Iraq and Syria, and the US and EU have a crisis over Ukraine with the world’s biggest oil and gas station in Russia that sits next door to the world’s biggest car market and production facilities in China that is a military, political, and economic ally of Russia in the SCO.

The US imports greater volumes of oil, refines it, and exports greater dollar amounts of refined oil products making $100 billion in profits to lower US trade deficits to $500 billion per year. The Ukraine crisis causes Russia to refine more Russian oil and pay its ally, China, to refine Russian oil, saving over $100 per barrel in their state owned systems, and using shorter shipping distances from Siberia and China to the Far East, Asia, Australia, India, and Africa to undercut greatly US prices and take the $100 billion permanently from the US and earn the $100 billion for Russia permanently with some refining payments for China. US trade deficits will rise to $600 billion per year. Some US refineries will close, and thousands of $60,000 per year, or higher, jobs will end in the US. Thank you Obama and Ukraine.

The US will remain in recession until, hopefully, 4Q 2014 with Back to School, Halloween, Thanksgiving, and Christmas pulling us out of recession. However, if ISIL takes Iraq, Kuwait, Saudi Arabia, Bahrain, Qatar, the United Arab Emirates, Oman, and Yemen, then the US would likely fall into an economic depression with an uncertain timetable for its projected end.

Jun 25, 2014 4:56pm EDT  --  Report as abuse
Crash0866 wrote:

BeRealistic wrote:

Crash, sadly, though I understand where you are coming from, I don’t think any one voted for “this”. They voted for handouts, they voted for skin tone, they vote for taking “the man” down a notch, they voted for that warm fuzzy that sooothes their conscience, they voted for soothing their unfounded “white guilt”, they voted against whatever perceived evil they saw in the “other side”. They voted for a lot of things (comapetence, ability, and qualification not among them), but no one wanted this. Sadly, too many are too proud to admit they were so easily fooled, twice, and now will support and defend their mistake to the very end.

And in voting for what you mentioned above…they voted for this

Jun 25, 2014 5:02pm EDT  --  Report as abuse
Agence21 wrote:

Did our economy ‘collapse’? I must have missed that one.

Jun 25, 2014 5:30pm EDT  --  Report as abuse
rocque wrote:

For a change I see many comments are at least somewhat thoughtful. There are some exceptions of course.

I agree with what I see as a pattern expressed here: Both the RNC and DNC are the same thing. Kind of like the end of “Animal Farm”.

One last thing: “You might say we are now in a depression with benefits.” (by lottopol) Hilarious!

Jun 25, 2014 6:18pm EDT  --  Report as abuse
carlmartel wrote:

@Agence21

The US economy didn’t collapse. We’ve gone into recession and should emerge in the 4th quarter. See my post at 4:56 pm.

Jun 25, 2014 6:36pm EDT  --  Report as abuse
Simplerman wrote:

The economy hasn’t collapsed yet. Just give it some time.

Took Wall Street at least two years to figure out nobody could pay for the millions of new houses “sold” before the 2008 crash.

Jun 25, 2014 7:18pm EDT  --  Report as abuse

Activity picking up? The author needs to consult real macroeconomists not the touts working for financial company PR departments. Our economy is in total stagnation with absolutely nothing on the horizon to change that.

Jun 25, 2014 7:38pm EDT  --  Report as abuse
pyradius wrote:

TheNewWorld continues to believe conservative thoroughly debunked garbage about Fanny & Freddy:

http://www.huffingtonpost.com/marvin-meadors/fannie-mae-freddie_b_1549411.html

You also forgot that Bush was the one pushing home ownership like there was no tomorrow.

Jun 25, 2014 9:26pm EDT  --  Report as abuse
Bakhtin wrote:

What TheNewWorld says:
“We are shaping up for the Obama Recession.”
“More and more economists are predicting another market crash”

What JustProduce says:
“the message is clear: there is no recovery”

What carlmartel says:
“The US will go into recession”

What BeRealistic says:
“U.S. economy collapses in first quarter. I see higher level thinking is not your forte.”

and then…

What the smart money, that has a clue about economics, says:
“Investors shrugged off the weak data and bought U.S. stocks.”

Enough said…

Jun 26, 2014 2:56am EDT  --  Report as abuse
TheNewWorld wrote:

@pyradius

What I quoted is on the public record. It can’t be debunked these were public speeches. Yes Bush was pushing home ownership as was Bill Clinton and the Democrats. Are you against home ownership now?

Jun 26, 2014 10:48am EDT  --  Report as abuse
TheNewWorld wrote:

@Bakhtin

“What the smart money, that has a clue about economics, says:”

The same guys that led us into the worst recession since the Great Depression? They never stopped telling people to buy the junk stocks, and never will. They are profiteers. You might as well say you are glad Goldman Sachs, Lehman Brothers, AIG, and all the others were allowed to survive for a last harrah.

Enough said….

Jun 26, 2014 10:50am EDT  --  Report as abuse
Bakhtin wrote:

@TheNewWorld

First you blamed Democrats, now you blame investors, presumably because you imagine that recessions are caused by making money.

Denying responsibility for their own actions is really the Republican fashion.

Jun 26, 2014 12:27pm EDT  --  Report as abuse
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