Reality check
I'm curious: are you amongst those who believe that our economic outlook is really bad?
If so, you're apparently in company with lots of others.
But not with me. Call me naive, but while the economy looks a bit soft, it certainly doesn't look that bad to me. That Warren Buffet is on the same page (buying) is maybe comforting, but there are many reasons to my optimism.
Recession? what are they talking about? 1.5% GDP growth in the last quarter is not great, but it hardly qualifies as "recession". Heck, the US saw just under 3% of real GDP growth in 2007. Even better, it saw over 3% of real GDP growth in the second half of the year. You know, during the ominous credit crunch. That's because the first half was when real weakness showed. Remember when GDP growth was 0.5% for a quarter? Yup, Q1 2006. Housing is down, sure, but exports are up (much because of the weak dollar), softening the housing blow. That's what a complex and stable economy like ours does, after all. It self-corrects.
Our unemployment numbers are laughable. 5%? how can anyone genuinely compare this to the great depression, when they reached over 20%? seriously, the vast majority of the world would love to have this level of unemployment. Let's say the subprime crisis is as worse as the worst predicted. That's like what, several hundred billion dollars lost. Sounds a lot? you do also know that US assets exceed 100 trillion, right? kind of puts things in perspective, does it not? in simpler terms, it's as if you had one million in assets and lost - take a deep breath - four thousand dollars. That certainly qualifies - for an "oh, well".
The fed has released the money supply - and did so quickly. Well done, Bernanke, although anyone who has read anything from the guy would have expected it. The great depression was a direct result of the government tightening money supply, creating a panic. Practically every model shows an expected 3%+ GDP growth in 2008. Like, wow. You know, 3% isn't bad for such a rich country. Methinks we'd gotten spoiled. Heck, even personal incomes rose faster than GDP last year.
What can I say? it sometimes feels like I live in a world run by sensationalist journalists. They are so starved for stories they can't contain themselves. Alright then. Let's see what happens over the next six months. Remember, it takes six months - two full quarters - of decline in GDP to have a recession. Considering the 1.5% real growth in the last ("most horrible, terrible, melt-down") quarter, allow me to remain skeptical on the chances of one actually occurring.
If so, you're apparently in company with lots of others.
But not with me. Call me naive, but while the economy looks a bit soft, it certainly doesn't look that bad to me. That Warren Buffet is on the same page (buying) is maybe comforting, but there are many reasons to my optimism.
Recession? what are they talking about? 1.5% GDP growth in the last quarter is not great, but it hardly qualifies as "recession". Heck, the US saw just under 3% of real GDP growth in 2007. Even better, it saw over 3% of real GDP growth in the second half of the year. You know, during the ominous credit crunch. That's because the first half was when real weakness showed. Remember when GDP growth was 0.5% for a quarter? Yup, Q1 2006. Housing is down, sure, but exports are up (much because of the weak dollar), softening the housing blow. That's what a complex and stable economy like ours does, after all. It self-corrects.
Our unemployment numbers are laughable. 5%? how can anyone genuinely compare this to the great depression, when they reached over 20%? seriously, the vast majority of the world would love to have this level of unemployment. Let's say the subprime crisis is as worse as the worst predicted. That's like what, several hundred billion dollars lost. Sounds a lot? you do also know that US assets exceed 100 trillion, right? kind of puts things in perspective, does it not? in simpler terms, it's as if you had one million in assets and lost - take a deep breath - four thousand dollars. That certainly qualifies - for an "oh, well".
The fed has released the money supply - and did so quickly. Well done, Bernanke, although anyone who has read anything from the guy would have expected it. The great depression was a direct result of the government tightening money supply, creating a panic. Practically every model shows an expected 3%+ GDP growth in 2008. Like, wow. You know, 3% isn't bad for such a rich country. Methinks we'd gotten spoiled. Heck, even personal incomes rose faster than GDP last year.
What can I say? it sometimes feels like I live in a world run by sensationalist journalists. They are so starved for stories they can't contain themselves. Alright then. Let's see what happens over the next six months. Remember, it takes six months - two full quarters - of decline in GDP to have a recession. Considering the 1.5% real growth in the last ("most horrible, terrible, melt-down") quarter, allow me to remain skeptical on the chances of one actually occurring.
posted by Blinkered at 7:27 PM
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