Thursday, June 26, 2014

Under Water (The New Economy)


Yup, the final results of 1st Quarter Economic Growth are in and...
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We're under water.
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Here's a headline for you:
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Reuters:  U.S. economy collapses in first quarter, but growing again
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WASHINGTON (Reuters) - The U.S. economy contracted at a much steeper pace in the first quarter than previously estimated, turning in one of its worst-ever non-recession performances, but growth already appears to have rebounded strongly.

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The Commerce Department said on Wednesday gross domestic product fell at a 2.9 percent annual rate, the sharpest decline in five years, instead of the 1.0 percent pace it had reported last month.

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...

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

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All these temporary factors have since faded, lifting growth early in the second quarter.

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The government's gauge of first-quarter growth has been lowered by 3.0 percentage points since the first estimate in April showed the economy expanded at a 0.1 percent rate, and revision between the May and June release was the largest on records going back to 1976.

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But hey, don't worry!  Why?  Because the same Econometric Wizards who told you at the end of 1st Quarter that the economy GREW at the rate of .9% (and then found out it actually SHRANK at almost 3% are relatively, fairly, pretty darn sure that everything is okay for the Second Quarter).
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Got that?  It's all gooooooooood.  The only problem was that in Q1 - 2014 was that for some reason they can't explain, God was angry with America and send us some really bad weather.  It was NOT the fault of the Obama Administration's policies, the fact that the 'Obama Recovery' has been dragging along the bottom of the economic growth chart like an anchor dragged across a lake bed by a boat torn lose from its moorings during a storm, but rather because, of the weather.  (See Obama's infamous 'Red Line' on chart which follows) 
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The Economists (and authors of the piece) also gleefully tossed in a few words about reducing Unemployment benefits and food stamps (heck, everyone ought to get THOSE!) to help explain the 'General Malaise' but mostly, yeah, it was the W-E-A-T-H-E-R.  And even President Obama can't do a gosh darn thing about the weather.
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Okay, so if the 1st Quarter's negative growth was a by-product of the Bad weather, the reduction in payout of 'perks' to the unemployed and poor, what will the 2nd Quarter numbers look like?
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You know, the weather around here has been pretty nice the past few months.  Perhaps Americans will take the time to relax, invest, and even, spend some time in, and around, the pool.

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Yes, if the Economy falters a second time, blame it on the weather, the pool, and in general, shrinkage...

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It won't be long until we know if we're underwater again for a second quarter.  This, of course, will mean that the Economy is once again...  In Recession. 

That'd mean a 'Double Dip' Recession...




Not that there's anything wrong with that...



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