Breaking News* Steep GDP Revision Puts Economic Loss at 6.2%

Breaking News* Steep GDP Revision Puts Economic Loss at 6.2%

www.cnbc.com

The U.S. economy contracted more sharply than initially estimated in the fourth quarter, government data showed on Friday, as exports plunged and consumers cut spending by the most in over 28 years amid a severe recession.



The Commerce Department said gross domestic product, which measures the total output of goods and services within U.S. borders, fell at an annual rate of 6.2 percent in the October-December quarter, the deepest slide since the first quarter of 1982. The government last month estimated the drop in fourth-quarter GDP at 3.8 percent.

(visit the link for the full news article)

The recession is deeper than was estimated. Dow futures already down 80 points before market has opened.

The decline was worse than analysts' expectations for a 5.4 percent contraction in fourth-quarter GDP. The economy expanded 1.1 percent in 2008, the slowest pace since 2001, the department said.

Consumer spending, which accounts for more than two-thirds of domestic economic activity, dropped at a 4.3 percent rate, the biggest fall since the second quarter of 1980, as household wealth plunged. That compared with a 3.5 percent fall estimated last month.

I would think today will not be a good day for stocks.

Exports, until recently one of the few pillars supporting the distressed economy, tumbled at a 23.6 percent annual rate, the steepest plunge since 1971. That was revised from the 19.7 percent drop estimated in last month's report.


Inventories, which minimized the fall in GDP last month after being estimated up a surprising $6.2 billion, were revised to show a $19.9 billion decline in the fourth quarter.

Business investment fell at a 21.1 percent rate, the largest drop since 1975, from a previously estimated 19.1 percent. Residential investment fell 22.2 percent in the fourth quarter.

The deteriorating economy is dampening inflation pressures, with the personal consumption expenditures price index diving a record 5 percent. Excluding food and energy, prices rose 0.8 percent in the fourth quarter, the smallest advance since a matching increase in 1997.

Besides the news of AIG which will be reporting Monday a 60 billion loss, most in U.S. history and Citigroup needing more money.

Any bets how far down the Dow will go today and how high gold will climb?




www.cnbc.com
(visit the link for the full news article)

[edit on 27-2-2009 by questioningall]

It's not a recession! It's a depression.

and it's going to get worse. All things are pointing to even more stocks falling in March. It will get bad and possibly violent by the end of this year if the stimulus doesnt help as much as people are hoping it will.

Edit: Gold is already up 12 dollars at the moment and ready to go up farther.

[edit on 27-2-2009 by Tentickles]

reply to post by Tentickles


I know it is a depression, but the news will never say that. That would completely freak most people out.... so the word will never be used by MSM. Recession sounds so much better.

I would think today will see some lows of the dow not seen in years. EVen though the Nikki was up over 100 points overnight.

reply to post by questioningall


Yes I agree the lows are going to be the news today.

If you watched the stocks yesterday it was up all day until the last hour of trading when the government let loose the information that 125 banks are in the dumps. then it fell 50 points in a matter of seconds! Ending at -88 points.

Dow futures down 123 now, before market has opened, on CNBC they are saying we will probably go below 7000 today and see new lows.

Glad I don't have any money in stocks anymore.

reply to post by questioningall


I was lucky enough to pull all my money out at 13,000.
I would have lost so much money if I had not.
Very interested to see how the news networks react to this. They still say "buy buy buy!" "dont take your money out yet!" This might set off a chain reaction where most investors remove their money.

reply to post by Tentickles


Yep, I removed all my exposure to stocks a year ago when the market was around the 13000 too, so I have not had losses like others.

It is sickening to me, how the people on MSM keep saying "buy" also, they always say "this is the bottom", when they know it is not.

I am going to go out on a limb and say the market will go down between 500 and 600 today. There is just so much bad news out there.

reply to post by questioningall


I wouldnt go to say that far but it is very, very possible.

Starts all around by the way. Good convo.

GDP catching up to the Unemployment Rate (a lagging indicator).

STOCK MARKET ALERT: WE hit a tipping point this am in futures and it suggests a TURN TO THE UPSIDE. (Assuming these lows hold). Elliott Wave wise this is a B wave and the C should retest the A high of 742+ in the SP Futures. This is an area to cover shorts and nibble at the long side. We are not at a Long Term low but we usually get ''bad news'' at the lows.

Down down 130 points in the first minutes

We will see how it goes.

From an anchor on CNBC: "Im surprised we're not trading lower."

[edit on 27-2-2009 by Tentickles]

Dow, has lifted more, it is only down 48 right now.

Gold is not up much.

Amazing,

Heh heh, welcome to my world. I quit trying to predict anything stock market based on a day-to-day basis in December. I swear some days Jesus Himself could come down from the heavens and tell Wall Street "Today you should sell, sell, sell!" and the market would instead go up. It's like the most insignifigant crap makes the bottom fall out while what should be devastating news barely makes a ripple anymore.

The only dependable trend I've got that hasn't failed me is that when Obama or Geithner open their mouths to publically address anything economy related, the market drops like a stone. It's a good thing Obama has been busy off mic the last couple of weeks, because if he'd been having press conferences daily we'd probably be eating the soles of our boots and watching the market teetering at about 1,000.

Okay, I am at a COMPLETE LOSS here

Dow down 10 points only

Gold DOWN to 936

What the hell is going on?

Who is behind these numbers?

Sometimes it takes the market longer to react, wait for Monday thats when you will see the 200 point drop.

It'll be at 10% before you know it. I'll give it till the end of the year. The markets cannot find a bottom, and we may wind up with Dow below 6000 by the end of the month. There's alot of theft going on right now and the bulk of it is our own government.

I think it's neuro linguistic programming that takes one thing and ties something completely different to it, like "the sun rises and i remember my first bicycle". You can take it farther and say, "the sun rises and i feel happy". and it works pretty well, if you tie it to real things that happen. obama did that a lot in his speeches and now he is doing it regarding this ongoing spending spree. "job losses are greater so we must spend money #1"; "". everything that is reported, especially negative aspects of our economy, become a crutch upon which a new expensive program is launched. and beause democrats are in power, everyone who thinks himself as a good guy democrat automatically supports it even if it makes no sense at all.

So the day ended 119 down on the Dow and Gold and Silver down.

None of this makes sense, the news is awful, and the "offical" announcement happens Monday on AIG losing the most ever in U.S. history for any company.

Originally posted by earlywatcher
I think it's neuro linguistic programming that takes one thing and ties something completely different to it, like "the sun rises and i remember my first bicycle". You can take it farther and say, "the sun rises and i feel happy". and it works pretty well, if you tie it to real things that happen. obama did that a lot in his speeches and now he is doing it regarding this ongoing spending spree. "job losses are greater so we must spend money #1"; "". everything that is reported, especially negative aspects of our economy, become a crutch upon which a new expensive program is launched. and beause democrats are in power, everyone who thinks himself as a good guy democrat automatically supports it even if it makes no sense at all.

So what we're seeing right now is "The sun rises and I... ARGH!!! What the hell just jabbed me in the ass? OUCH!" and an image of Uncle Sam clandestinely running away trying to zip back up when we turn around?

Seriously, some days I wonder if the market was to return to it's normal growth pattern it displayed prior to the 70's Bear exactly what the ramifications would be. You figure, accounting for the normal pattern of the Dow prior to the 80's explosion and 90's super explosion, and giving a little bit of room for overall growth, we'd bottom out somewhere between 3,000 and 3,500. As it stands right now, it's a complete joke to hear the term "America's lost decade" thrown around. Crap on that noise, we've already lost decades, with an 's' on the end. We've shed 12 years worth of growth and there is no way in hell we'll see the markets return to their highs within 8 years, let alone their highs with the 10+ years of growth we could have been enjoying between October of 2007 and whenever we reach that 14,100 milestone again (if we ever do... and at times I doubt we ever will.)

Think about it, take a guy in his late 50's/early 60's that was looking at retiring with a handsome portfolio as recently as one year ago (arguably as recently as 6 months ago). He's not a ditch digger, but neither is a stuffed suit. He's your average middle to upper middle class employee who spent a career working hard, being a company man, and planning for the day when he and his wife could relax and spend the rest of their years enjoying the grandkids and have enough saved to not worry about burdening the kids or having to live like paupers. Not a hateable person in any way, because he did it the way he was supposed to, saved his own hard earned dollars, and never jerked the system around. Now look at the same man today... he's also lost over a decade, but he may not have any way to get that decade back. So here he was, busting his ass for 35 years, saving what and where he could, and all for what? To watch the whole effing system go 'KABOOM'?

I've not bothered worrying about it yet. I'm a young man, haven't even been out of college for 8 years yet. I grew up not expecting to even have a Social Security system by the time I was 65 because in the 90's the idea was hammered into most of us that the system was about to die and would be insolvent long before we became eligible. I'd like to say I had the forethought to stop contributing to my 401 K just before this went to hell. Unfortunately for my pride, I can't call it forethought but simply dumb luck. We had our second child on the way, due in December of 2007 and I decided those couple hundred bucks a paycheck could be put to better use helping get all the stuff we needed for the baby and having to buy diapers and formula for two babes, each with totally different sizes/needs. Again, out of dumb luck, when I stopped contributing I also accidentally transfered what I had already contributed into very low yield/low risk markets because I misunderstood something on the webform I filled out. Anyway, that was an off topic tangent...

My point is the media can continue to focus on the banks and on the companies that are struggling all they wish, they can even focus on the layoffs. Bottom line, so far the truly sad victims of this are our elder generation who have lost the abillity to retire without worry. The younger people, even those with families to feed, we can survive. I'd work just about any job or, if I had to, rob just about any store to care for my family. Unfortunately we're leaving an entire generation who should be in the best years of their lives instead looking at having personally lost decades that they can't replace. That's sad, sadder than any bullcrap GDP 'adjustment' which will probably get continuously adjusted downward until it suits the government to lie to us in the other direction and tell us everything is better... even while our own eyes and ears tell us a different story.

reply to post by burdman30ott6


Great post!!

My sentiment exactly, who I FEEL for are ALL the older folks who worked hard all their lives and put money away in a 401K or IRA to be able to retire and go fishing, spend time with the grandkids, etc.....

they are the ones who are HURT badly, they followed the rules.........so instead of them retiring they are seeing all their money go to bankers and down the drain.