US - Economy in Recovery or just smoke and mirrors?

While discussing the Recession/Depression in another thread I was pulling up reference material to contribute and I noticed a few recent articles. I'm not an economist. So I'll present it here for your input. Has the recession/Depression bottomed out and are we on the upswing finally?

All indicators show a slow but steady climb. The overriding consensus is not to be too overly optimistic of this slow economic recovery to generate many new jobs anytime soon. So how is that a recovery if people are not going back to work?

Your Thoughts?

U.S. Economy: Leading Index Climbs More Than Forecast

More than $2 trillion in government stimulus programs worldwide have revived growth from the U.S. to China, signaling the worst global recession in the post-World War II era has come to an end. Caterpillar Inc. and Google Inc. are among the American companies reporting better-than-anticipated earnings and saying sales will probably improve next year.

“The recovery is here and it’s going to get a little stronger too,” said Jonathan Basile, an economist at Credit Suisse in New York

Leading economic index hits two-year high

"These numbers strongly suggest that a recovery is developing," Conference Board economist Ken Goldstein said in a statement. "However, the intensity of that recovery will depend on how much, and how soon, demand picks up."

Existing home sales rebound to 2-year high

WASHINGTON (Reuters) - Sales of previously owned U.S. homes surged to their highest level in more than two years in September, a survey showed on Friday, providing further evidence the housing market and economy were on the mend.

The National Association of Realtors said sales surged 9.4 percent to an annual rate of 5.57 million units, the highest level since July 2007, from a downwardly revised 5.09 million units in August.

Analysts polled by Reuters had expected September sales to rise to a 5.35 million unit pace from the previously reported 5.10 million units in August.

Continued increase in leading economic indicators points to recovery

Eight out of 10 leading indicators increased in September. The interest rate spread between 10-year Treasury bonds and overnight federal funds was the largest positive contributor, demonstrating a healthy yield curve. The only two negative leading contributors were average weekly manufacturing hours and building permits.

“This is going to be a long, tough, slow recovery. The good news is, it’s begun," said Ken Goldstein, Conference Board economist. He said Americans may not feel the recovery any time soon, but noted that natural gas prices have plummeted and winter heating bills won’t be as high in the Midwest.

Volcker: Recovery won't be quick fix for job rates

At a roundtable meeting of corporate and government leaders in Kentucky on Thursday, Volcker said the hard-hit financial sector faces "a considerable slog" in recovering from the worst economic downturn since the Great Depression. Volcker said that the factors that caused the downturn took years to form and that the recovery will take years as well. He warned that economic recovery will be too slow to reduce the jobless rate at a fast clip. The national unemployment rate currently stands at 9.8 percent.

In Dollar’s Fall, Upside for U.S. Exports

But there is also an upside: a weak dollar could prove beneficial to the American economy by aiding long-suffering manufacturers, rebuilding a stronger industrial base and lifting exports even if it makes life harder for trading partners around the world, especially in Europe.

“As long as it doesn’t crash, a gradual, orderly decline is healthy,” said C. Fred Bergsten, director of the Peterson Institute for International Economics. “The dollar went up 40 percent between 1995 and 2002, so this is a necessary rebalancing.”

US high-tech trade deficit improves, still long way to go

20.10.2009 kl 05:34 | IDG News Service
A A A

Well it might not be time to break out the bubbly just yet but US high-tech exports totaled $223 billion in 2008, up one percent from $220 billion in 2007 continuing a trend that has seen tech exports rise 38% since 2002. The number represents the single largest export sector in the country, accounting for 17% of the total US exports.

Ford Said to Make SUV in Kentucky to Export to Europe

Oct. 22 (Bloomberg) -- Ford Motor Co. is moving production of a small sport-utility vehicle from Europe to the U.S. to take advantage of lower labor costs and the weaker dollar, according to three people familiar with the plan.

Ford in October 2011 will shift the Kuga model to Louisville, Kentucky, from a factory in Saarlouis, Germany, said the people, who asked not to be identified because the plan is private. As many as 80,000 a year will be exported to Europe, one of the people said. The dollar has fallen 18 percent against the euro this year, lowering the cost of U.S.-made goods.

ECRI: US recovery poised to trounce any obstacles

"Despite a dip, WLI growth remains close to the previous week's record high, suggesting that the U.S. economic recovery will continue to gain strength through the New Year," said ECRI Managing Director Lakshman Achuthan.

The index's yearly growth rate fell to 27.2 percent from the previous week's revised 27.8 percent, which was originally reported at 27.9 percent.

The index has shown annualized economic growth at record highs since September. That's a turnaround from earlier this year, when the growth rate was sharply negative.

[edit on 23-10-2009 by SLAYER69]

I have a thread going about this issue and have been studying the "Good News Propaganda" thats being spun. Where do I satrt? I will pick the first one to start with.

"These numbers strongly suggest that a recovery is developing,"

Until you look at the numbers and you realize they where obtained buy "cost cutting" and "new investments" which means they layed off more U.S. workers and are moving market share to other countries!

Would you like more?

The pain is starting to ease - GDP report

The pace of economic decline slowed substantially in the second quarter, as the U.S. economy shrank at an annual rate of 1% -- far less than it did in the first quarter, according to a government report released Friday.

That was 2nd Q GDP. 3rd was down again some.

Originally posted by SLAYER69
Existing home sales rebound to 2-year high

WASHINGTON (Reuters) - Sales of previously owned U.S. homes surged to their highest level in more than two years in September, a survey showed on Friday, providing further evidence the housing market and economy were on the mend.

The National Association of Realtors said sales surged 9.4 percent to an annual rate of 5.57 million units, the highest level since July 2007, from a downwardly revised 5.09 million units in August.

Analysts polled by Reuters had expected September sales to rise to a 5.35 million unit pace from the previously reported 5.10 million units in August.

The problem:

First-time homebuyers and investors are snapping up those homes and taking advantage of low mortgage rates. These buyers can also take advantage of a tax credit of 10 percent of the sales price, up to $8,000, if the sale is completed by the end of November.

The tax credit is so important to some buyers that they are adding a clause to their contracts, allowing them to back out if the sale doesn't close by Nov. 30. However, economists note that bargain-priced foreclosures and low mortgage rates are making a big contribution to the sales boom.

Like cash for clunkers, when the free money dries up, so do the buyers!

Well economics’ is certainly not my forte but I do work in the mortgage and real estate industry and I can tell you what is going on behind the scenes of some x- big money players, and it isn’t pretty at all.

When these schmucks are not doing well we are all affected. It may even cost me my job.


I meant are not doing well. LOL



[edit on 23-10-2009 by cindymars]

smoke and mirrors - the elites want to make us too poor to rebel according to Lindsey Williams new dvd he just released... he is on Alex Jones again to day, probably later on they will have the number crunching done and released... but it appears we are being bled slowly...
he mentioned 24 months before War... and we have to be too poor to rebel... interesting I cant wait to decipher this new intel from 86 yr old dying elitiest bastard thats feeding Lindsey -- accuaracy well even Alex cant match the accuracy of Lindsey... spot on... remember the 150 barrel oil ... we knew... and the 50$ barrel oil .... we knew... thanks Lindsey.

[edit on 23-10-2009 by Anti-Evil]

Originally posted by plumranch
The pain is starting to ease - GDP report

The pace of economic decline slowed substantially in the second quarter, as the U.S. economy shrank at an annual rate of 1% -- far less than it did in the first quarter, according to a government report released Friday.

That was 2nd Q GDP. 3rd was down again some.

Your source.
Last Updated: July 31, 2009:

My sources are from today or within the last two days.


"No doubt" economy grew in Q3:

Wed Oct 21, 2009 3:41pm EDT

WASHINGTON (Reuters) - The U.S. economy grew at a "nontrivial" rate in the third quarter and probably would again in the current period, White House economic adviser Lawrence Summers told Reuters in an interview on Wednesday.

"There's really no doubt that the third quarter registered growth, and growth at a nontrivial rate, and every expectation that the fourth quarter will do the same,"

[edit on 23-10-2009 by SLAYER69]

reply to post by SLAYER69


I dont know bro, I hope the US recovers, but with all the big spenind idiots in D.C I am not sure we can recover.

Hey I like Google's take on things.

Google CEO: Europe keeping pace with US recovery

Historically, Europe has lagged a U.S. economic recovery by up to six months, Schmidt told reporters. This time, the CEO said, the continent appears to be keeping pace with the U.S., where the economy has been improving since June, based on the usage of the Internet's largest search engine and most profitable advertising network.

Schmidt cautioned that the online advertising, search requests and shopping that Google detects may not be an accurate reflection of the economy. Still, his observations jibe with Federal Reserve Bank Chairman Ben Bernanke and many other experts who believe the economy is getting better even though jobs are still hard to find.

Advertising is traditionally a lagging indicator of the economy, meaning ad spending reflects economic changes that have already happened. Businesses buy more advertising when they've already noticed conditions improving, Schmidt said.

reply to post by liveandletlive


Oh I hear ya...

I look at it this way.

A pessimist sees the glass half empty.
An Optimists sees the glass half full.
An Economist states "These numbers strongly suggest"

But I like the Engineers point of view on it.

The Glass was twice the size needed to begin with.


10.23.09
Four reasons US manufacturing could shine

US manufacturing doesn’t get the respect it deserves. Some dismiss it as a Rust Belt remnant of yesterday’s economy; others claim it’s dying outright.

In fact, it is becoming more competitive than it’s been in a long, long time. This may have a lot to do with the falling value of the dollar and the elimination of the least productive factories in the face of the severe recession. Nevertheless, US manufacturing productivity topped that of 15 other nations and tied South Korea’s for the No. 1 spot last year, according to an international survey released Thursday by the US Department of Labor.

Productivity is key to manufacturing’s future because it plays a big role in determining how quickly the sector can grow. If productivity rises quickly, say, 4 percent in a year, then an employer can raise workers’ pay 3 percent more and still sell widgets more cheaply. If productivity only rises 1 percent a year, it’s very hard to boost workers’ pay and still remain competitive.

US exports rise more than expected

NEW YORK - The US trade deficit unexpectedly narrowed in August as exports climbed to the highest level of the year and oil imports plunged.

The gap fell 3.6 percent to $30.7 billion from a revised $31.9 billion in July, the Commerce Department said yesterday in Washington. The 0.2 percent increase in demand for American-made goods abroad would have been larger excluding a drop in aircraft shipments, which tend to be volatile.

More than $2 trillion in government stimulus programs are reviving demand from Asia to Europe, ensuring that US factories benefit from growing sales overseas as the dollar weakens. Production gains and the need to replenish depleted inventories mean imports will probably also grow, preventing the deficit from narrowing further.

Dollar's Drop Has Aided U.S. Trade Deficit

The dollar has been declining relative to other major currencies for months, and this week there has been a wave of worry that foreign investors might curtail their investments in dollar assets. But so long as the slide remains gradual and orderly, as it has so far, economists generally view it as a plus for the U.S. economy. While it makes imported goods such as oil more expensive, it makes U.S. exporters more competitive, helping rebalance an economy that has been skewed away from exports for years.

In August, the gap between what the United States exports versus its imports narrowed to $30.7 billion, from $31.9 billion, as exports rose and imports fell, the Commerce Department said Friday. The dollar rose 0.5 percent versus other major currencies Friday, as investors interpreted a Thursday night speech by Federal Reserve Chairman Ben Bernanke to suggest that the central bank could raise interest rates in the not-too-distant future.

reply to post by SLAYER69


We are in a recovery in the economy BUT that could turn into
a W double dip recession if those retards in Washington ruin it!
Great thread Slayer! S&F for you.

reply to post by liveandletlive


Good points there liveandletlive.
I liked the cash for clunkers program only because it helped Ford.
I bought stock in Ford at $2 a share and sold at $8!
Is this country great or what?

reply to post by SLAYER69


Ya know I love ya bud but....

Over the past year the global economy has experienced a massive contraction, the deepest since the Great Depression of the 1930s. But this spring, economists started talking of “green shoots” of recovery and that optimistic assessment quickly spread to Wall Street. More recently, on the anniversary of the Lehman Brothers crash, Ben Bernanke, Federal Reserve chairman, officially blessed this consensus by declaring the recession is “very likely over”.

The future is fundamentally uncertain, which always makes prediction a rash enterprise. That said there is a good chance the new consensus is wrong. Instead, there are solid grounds for believing the US economy will experience a second dip followed by extended stagnation that will qualify as the second Great Depression. Some indications to this effect are already rolling in with unexpectedly large US job losses in September and the crash in US automobile sales following the end of the “cash-for-clunkers” programme.

That rosy scenario thinking has returned to Wall Street should be no surprise. Wall Street profits from rising asset prices on which it charges a management fee, from deal-making on which it earns advisory fees, and from encouraging retail investors to buy stock, which boosts transaction fees. Such earnings are far larger when stock markets are rising, which explains Wall Street’s genetic propensity to pump the economy.

As for mainstream economists, their theoretical models were blind-sided by the crisis and only predict recovery because of the assumptions in the models. According to mainstream theory, it is assumed that full employment is a gravity point to which the economy is pulled back.

Empirical econometric models are equally questionable. They too predict gradual recovery but that is driven by patterns of reversion to trends found in past data. The problem, as investment professionals say, is that “past performance is no guide to future performance”. The economic crisis represents the implosion of the economic paradigm that has ruled US and global growth for the past thirty years. That paradigm was based on consumption fuelled by indebtedness and asset price inflation, and it is done.

There is a simple logic to why the economy will experience a second dip. That logic rests on the economics of deleveraging which inevitably produces a two-step correction. The first step has been worked through, and it triggered a financial crisis that caused the worst recession since the Great Depression. The second step has only just begun.

Deleveraging can be understood through a metaphor in which a car symbolises the economy. Borrowing is like stepping on the gas and accelerates economic activity. When borrowing stops, the foot comes off the pedal and the car slows down. However, the car’s trunk is now weighed down by accumulated debt so economic activity slows below its initial level.

With deleveraging, households increase saving and re-pay debt. This is the second step and it is like stepping on the brake, which causes the economy to slow further, in a motion akin to a double dip. Rapid deleveraging, as is happening now, is the equivalent of hitting the brakes hard. The only positive is it reduces debt, which is like removing weight from the trunk. That helps stabilise activity at a new lower level, but it does not speed up the car, as economists claim.

Unfortunately, the car metaphor only partially captures current conditions as it assumes the braking process is smooth. Yet, there has already been a financial crisis and the real economy is now infected by a multiplier process causing lower spending, massive job loss, and business failures. That plus deleveraging creates the possibility of a downward spiral, which would constitute a depression.

Such a spiral is captured by the metaphor of the Titanic, which was thought to be unsinkable owing to its sequentially structured bulkheads. However, those bulkheads had no ceilings, and when the Titanic hit an iceberg that gashed its side, the front bulkheads filled with water and pulled down the bow. Water then rippled into the aft bulkheads, causing the ship to sink.

The US economy has hit a debt iceberg. The resulting gash threatens to flood the economy’s stabilising mechanisms, which the economist Hyman Minsky termed “thwarting institutions”.

Unemployment insurance is not up to the scale of the problem and is expiring for many workers. That promises to further reduce spending and aggravate the foreclosure problem.

States are bound by balanced budget requirements and they are cutting spending and jobs. Consequently, the public sector is joining the private sector in contraction.

The destruction of household wealth means many households have near-zero or even negative net worth. That increases pressure to save and blocks access to borrowing that might jump-start a recovery. Moreover, both the household and business sector face extensive bankruptcies that amplify the downward multiplier shock and also limit future economic activity by destroying credit histories and access to credit.

Lastly, the US continues to bleed through the triple haemorrhage of the trade deficit that drains spending via imports, off-shoring of jobs, and off-shoring of new investment. This haemorrhage was evident in the cash-for-clunkers program in which eight of the top ten vehicles sold had foreign brands. Consequently, even enormous fiscal stimulus will be of diminished effect.

The financial crisis created an adverse feedback loop in financial markets. Unparalleled deleveraging and the multiplier process have created an adverse feedback loop in the real economy. That is a loop which is far harder to reverse, which is why a second Great Depression remains a real possibility.

reply to post by DaddyBare


Ya know I tend to agree with you on this one, Love ya slayer but this is more feesible.

reply to post by DaddyBare


I'm not going to ignore the obvious.

I'm not one to hide his head in the sand nor pack up and run for them there hills. I'm aware of what has happened. Call it just the way I've been raised. I'm looking at it from a battle damage stance or our present status. What do we have that's still good and where can we go from here?


[edit on 23-10-2009 by SLAYER69]

reply to post by SLAYER69


The weakened dollar makes imports such as oil more expensive. That means gas prices go up. Most people I know are barely hanging on if they havent already gone down. I wonder what higher gas prices will do to them. There is also the effect fuel prices have on trucking. Things like food.....well anything that is trucked for that matter........pretty much everything, goes up. Doesnt that also mean everything else we import will go up? Think about that. Good for manufacturing yes. Hopefully we can manufacture everything we need!

Originally posted by Eurisko2012
reply to post by liveandletlive

 

Good points there liveandletlive.
I liked the cash for clunkers program only because it helped Ford.
I bought stock in Ford at $2 a share and sold at $8!
Is this country great or what?

Good call. A friend of mine sold too soon. Kicking himself.

U.S. product makers are slumping — but still No. 1

10/23/2009

Despite a brutal recession and stiff Asian competition, it's way too soon to write an obituary for U.S. manufacturing

That feeds into the death-of-manufacturing story line that we hear all too often. The usual refrain is that Asia, and especially China, is becoming the world's workshop, leaving the U.S. with a bunch of hollowed-out factories.

NAM President John Engler, who is visiting factories in St. Louis this week, describes the recession's effect this way: "It's kind of like the Yankees having a losing season. We're still the world's leading manufacturing economy. All the other nations would love to trade places with us."

Engler says he wants Americans to stop agonizing over what's been lost, including thousands of automotive jobs in his home state of Michigan, and focus instead on what manufacturers need to be competitive in the future.

reply to post by liveandletlive


Oh again I hear ya.
I'm not trying to make a sunshine and rainbow thread nor a Gloom and Doom thread. I'm trying to look at it very realistically. What do we have that's good? We know whats wrong.

By the way slayer, smoking is bad for you!