A sort of basic description of a recession was 2 or more quarters of real GDP decline. That was the basic definition for a while. Since then, the NBER has come up with a more complex methodology:

"a recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."

And no, the fact that people argue about just how to define it precisely does not make it subjective. So according to them this recession started on December 2007. If the GDP growth figures for the last quarter are confirmed next quarter, along with a rise in industrial production and sales, they will consider the current recession over:

Business Cycle Expansions and Contractions


Unemployment deliberately does not enter the "recession equation." And that is for a simple reason: unemployment figures always lag economic recovery. Even if every single business started hiring right now, it would still take 2 or 3 months for that to show on the official figures.


Just as an example, the 81-82 recession ended on november 82, but unemployment only dipped below 10% on july 83.

Speak for yourself. If I got a tax cut, I would invest it in growing my business. I have seen the pattern in my business. When i invest $1 in my business today I get a much better return on that dollar than if I just put it in my pocket. In my business my costs have gone up, sales have gone down. My access to new credit is zero. The cost of existing credit has gone up. What I need is access to new credit at lower costs, lower taxes, less regulation in order to grow my business. If I grow my business, I hire more people and I buy more stuff to operate my business.

Economists look at various things when tracking the business cycle. A recession is usually followed by a "trough" before going to a recovery.

Indicators, however, are generally divided by the delay between the indicator and the direction of the economy: leading (happens before the economy changes), coincident (happens at the same time), and lagging (happens after economic change).

Examples:

• Leading: housing spending index, commodity prices, S&P Composite Index
• Coincident: GDP change, personal income change, retail sales
• Lagging: unemployment rate and commercial inventory levels

So to answer your question, looking at GDP indicates what's happening to the economy now, and looking at unemployment figures suggests what happened to the economy a while back. So the recent growth in GDP suggests the economy is currently growing, but the unemployment rate is still increasing, suggesting that the economy was receding a while back.

In a "trough," demand usually continues to drop, and so workers either continue to face layoffs or stalling income growth. But as demand is suppressed, so are prices, which keeps inflation at bay or even may result in deflation. Interest rates tend to remain low in this case, which encourages borrowing and spending. This eventually helps rebuild economic growth.

Yes, exactly.

tax revenue as a share of GDP will be at the lowest point since 1950 this year, so supply siders need not worry.

You will find no agreement on the answer to this question. It is loaded with political implications. Any study you find will be loaded with assumptions because of the complexity of our economy. You can not control for that one variable. So at some level basic logic has to be used. For example at a 100%+ marginal tax rate how much effort would you put into earning another $1 knowing it will be taken? Compared to your willingness to earn another dollar if it was taxed at 10% Those who say "supply side" is B.s. don't answer this question.

---------- Post added at 04:36 PM ---------- Previous post was at 04:34 PM ----------

An important question is why?

Supply siders have a lot to worry about when government (tax spending rather than tax generating) is a bigger and bigger share of GDP

GWB was the poster boy for supply side economics, how was the economy when he left office?

I don't know, nor care. What I care is about what's now.

Between the double digit inflation and the triple digit bank failures... how are we to believe that the economy is getting better?

10% unemployment, 116 failed banks.

And how do we know if Obama and his Admin. weren't doing what they're doing things wouldn't be worse? Unmeployment seems to be slowing the Dow is rising. Is was in a full out free fall by the time GWB left.

Well you should. Looking at the economy takes more than looking at today.

That is merely one piece of the puzzle.

The U.S. GDP has grown for the first quarter since the shit hit the fan last year. One step at a time.

October was the retail sector's best month in over a year.
So far, S&P 500 companies are reporting 15% above expectations (as dismal as they were).
The home price index rose for the third straight month.

This in and of itself is a myopic view of the economy. You have to look at the bigger picture if you want to see the signs of recovery down the road.

It wasn't in full out free fall, the unemployment rate wasn't plunging like a rock nor were banks failing at record amounts. While they were starting to collapse in the last quarter the data below down't corroborate that it was in free fall. I don't thin that it is directly attributable to GWB. I don't pin this on Obama either. I've just stated that the economy isn't better, people keep lying to themselves for whatever reasons.

Sanderson State Bank
En Español Sanderson TX 11568 December 12, 2008 Haven Trust Bank Duluth GA 35379 December 12, 2008 First Georgia Community Bank Jackson GA 34301 December 5, 2008 PFF Bank & Trust Pomona CA 28344 November 21, 2008 Downey Savings & Loan Newport Beach CA 30968 November 21, 2008 Community Bank Loganville GA 16490 November 21, 2008 Security Pacific Bank Los Angeles CA 23595 November 7, 2008 Franklin Bank, SSB Houston TX 26870 November 7, 2008 Freedom Bank Bradenton FL 57930 October 31, 2008 Alpha Bank & Trust Alpharetta GA 58241 October 24, 2008 Meridian Bank Eldred IL 13789 October 10, 2008 Main Street Bank Northville MI 57654 October 10, 2008 Washington Mutual Bank Henderson NV 32633 September 25, 2008 Washington Mutual Bank FSB Park City UT 32633 September 25, 2008 Ameribank Northfork WV 6782 September 19, 2008 Silver State Bank
En Español Henderson NV 34194 September 5, 2008 Integrity Bank Alpharetta GA 35469 August 29, 2008 Columbian Bank & Trust Topeka KS 22728 August 22, 2008 First Priority Bank Bradenton FL 57523 August 1, 2008 First Heritage Bank, NA Newport Beach CA 57961 July 25, 2008 First National Bank of Nevada Reno NV 27011 July 25, 2008 IndyMac Bank Pasadena CA 29730 July 11, 2008 First Integrity Bank, NA Staples MN 12736 May 30, 2008 ANB Financial, NA Bentonville AR 33901 May 9, 2008 Hume Bank Hume MO 1971 March 7, 2008 Douglass National Bank Kansas City MO 24660 January 25, 2008

Yes, but there are number that can't lie.

When unemployment benefits are extended to 79 weeks, it's not myopic, it's reality. I have friends who were terminated for a job that lasted 6 months and have had unemployment benefits three times longer than the job.

As far as not caring, it's not caring about it being GWB or Obama's fault. The historians and writers will sort out the blame. Right now there's work to do, not the blame game.

Companies are stating their earnings in the best light possible. I don't believe that the stellar earnings are as stellar as they are. Enron had stellar earnings as did AIG, and the rest of Wall Street. It's easy to lie on paper.

Most of your post makes little to no sense to me.

For some reason I feel tempted to respond by posting the address and firm names of numerous lobbying groups. Though I have no idea what that would prove either.

I sit in board meetings and help to craft annual reports and 10Ks from time to time. It's easy to shuffle one line of accounting into another line to make the best possibility of shitty numbers so that they look better. Write up some good text around it, and voila, it's potentially good for a few points up on the stock. GAAP and BLC allow for lots of liberty.

Sorry doing too many things at once. The list I posted should have stayed as a table, here's a graphic instead.

You can see that the banks weren't in free fall as far as closures are concerned nor was unemployment. Graphs of those time periods would not show a sharp drop off as you are implying.

FDIC: Failed Bank List
http://img.photobucket.com/albums/v1...96-27-30PM.jpg

Where is the double digit inflation? Last I heard there was no inflation which is why there was no increase in social security payments this year.

Also please look back and read why unemployment is a lagging indicator. Look at every recession in history and you will see that unemployment lags behind the recession. Once the recession hits the job losses are coming and there isn't much you can do about it.

Here is what I know. The economy appears to be out of the recession. That means jobs should start to come in 6 months to a year. In fact we already see the layoffs slowing.

Tell that to my friends at Conde Nast and the ones coming up at Borders Books.

If it's a lagging indicator, then the whole 1 year when people were saying, we're in a recession and it was supposedly "everything is fine", doesn't sit well with me and the situation now. I believe that the "recession is over" is just as much a line of bullshit.

Stores that aren't able to meet their rents because they have no customers since the customers don't have jobs is what I'm seeing now in my neighborhood and area.

Myopia is real. You can't look at unemployment alone and make considerable judgements on how the economy is doing or will be doing. You can't look at bank failures (from how long ago now?) on their own and make judgements on how the economy is doing or will be doing.

I'm not trying to pump sunshine; I'm just trying to point out the indicators suggesting that the economy isn't all shit.

The law of averages comes up with numbers that gauge something measurable over time. The percentage of those fudging numbers probably doesn't change considerably over time. When the economy was "good," it wasn't that good. So when the economy is "bad," it isn't that bad. It all comes out as something measurable in the end.

Refer to what I said about an economic "trough" above. We're in it if we're out of the recession.

Unemployment vs GDP

http://i17.photobucket.com/albums/b84/bonddad/48-59.png
http://i17.photobucket.com/albums/b84/bonddad/60-80.png
http://i17.photobucket.com/albums/b8...dad/802000.png

Rekna, that's quite illustrative of what I've been getting at. Thanks.

And I'm not pumping doom and gloom but the reality of the surroundings.

If the economy is getting better then HOW is it getting better? By the same ponzi schemes before? Is it just moving credit monies back and forth? What's being produced to increase the GDP?

By what I'm reading in the papers and in the company quarterlies, it's still not sustainable. Commercial mortgages are going to come due this coming year, a lot of the see-throughs that were supposed to be finished rentable buildings will not produce the expected jobs and tax revenue.

Sorry, "fool me once shame on me, fool me twice shame on you." is what I'm going by here.

The thing to note is that in the fallout of the economic shitstorm of last year, banks are generally going to be more cautious when it comes to lending. And if new regulatory practices come into play (as they should), then that's something more stabilizing. Looking at the 3.5% increase in GDP, much of that is consumer spending, auto sales, and home building. How much of it was done on credit? I don't know, but I'm guessing the credit used wasn't the toxic kind we've come to know about all too well.

There will likely be a mortgage aftershock. But there are still some things that need to take their toll before the recession will finally end. No one in their right mind is confidently declaring the recession behind us, but there are signs here and there that a) the worst is probably behind us, and b) there are signs of growth in certain meaningful areas. The economic hemorrhaging will eventually slow and then stop before things get back on track to something sustainable.

So you think the date a bank fails is the meaningful date? All the banks that failed were in trouble long before they failed.

You can look at it anyway you want. I think last summer/fall is when the shit hit the fan. That shit had been piling up for years, IMO largely due to dereg. I know my 401K and other holdings lost about 43% between July and late Oct. In the spring I was sailboat shopping, by winter I was wondering if selling my truck might not be a bad idea.

That underlines exactly the point I'm stating and why I don't think that we're in a better position now.

The big banks that were too big to fail, some of them got bigger. Why is that? How is that possible? If we bailed them out so that they would not fail how did we provide any safety net to make sure that it can't fail? Stress tests are just as a reasonable a solution to making sure they cannot fail as Sarbanes-Oxley is to making sure that companies don't cheat in their processes.

---------- Post added at 08:47 AM ---------- Previous post was at 08:42 AM ----------

BG, people were using their housing equity like it was an ATM, even if they had not bought toxic mortgages. People actually have to work to earn money and have some disposable income to dispose in order to stimulate the economy. Yet they need to also save money for a rainy day. Saving money puts money into the banks. Banks are then building up resources and able to give out loans backed by real cash.

Did suddenly people get raises? I didn't get one last year. This year I got one, 1.25% which with the increase in property taxes, water, and other goods and services, I'll see none of that increase. But I was "lucky" I got something, which is 1.25% more money going someplace. I don't believe others are able to spend money.

So how could the economy be better if the problems haven't been solved?

What or where is the money coming from? It's not credit, it's not their houses... people didn't magically start making money... so what is it?

Consumer credit falls for 8th month in record streak - Nov. 6, 2009
Karen Dynan testified before the Joint Economic Committee at the end of October. The link is a transcript of what she testified.

Massive government spending is behind the GDP upswing, consumers aren’t exactly in a spending money since many don't have it, given that unemployment rate this week hit 10.2 percent and raises are close to flat.

So let me try to circle back to Obama, $159 billion in grants and loans made so far under the economic stimulus package has created or saved about 640,000 jobs. Created or saved? really? Is that the best they can say? ADDING saved to it? Because in my opinion adding the word SAVED allows you to pad the number as opposed to saying CREATED. So how many were saved and how many were actually created? You can't truly believe that saying "saved" means they really saved it does it? Because it's like anything in life, it either happened or it didn't. I can't say I saved $50,000 yesterday because I didn't buy a BMW 5 Series any more than I can say that the jobs at work were saved because they didn't lay more people off. Supposedly the stimulus package has some generous school incentives so schools are buying our products. Besides being unsustainable, did it really save some of our workforce? How or when can we know for sure?

If we're expecting transparency, they why pad it? Why not live with the number that it is?

Nice. I've received 0% over the last 5 years. But this is more about the industry I work in and my own complacency.

The economy and what influences it is so far-reaching that no one has a single unified "best way" to look at it. Wages are one of many indicators. Suppressed wages, pay cuts, or layoffs are immediately indicative of a recession and it is an indicator that tends to hit closest to home: it's immediate, and you can see it around you. This is why we tend to focus on this and not so much on other things. I was just looking at the numbers, and the Dow is up nearly 30% since Obama took office less than a year ago. How many have been discussing this around the kitchen table...? Exactly.

There are people who make money during a recession. There are people who protect their money during one. So when things start to look better (i.e. from the point of view of those with money and knowledge of the economy), some early adopters start spending again. Look around my own neighbourhood and you will see a number of houses being renovated if not replaced. Condos are still springing up like daisies, and 2009/2010 model cars abound. Why? Well, for starters, things are pretty cheap right now. Good deals all round.

Low prices + low interest rates + people with money = borrowing and spending

It's a select portion of the population, but it starts somewhere after most have spent months either curbing their spending or completely "turtled."

It's one factor. The government is a huge customer to many companies. When they spend, they are hiring people and buying and consuming products. These products and services have to come from somewhere. Then you factor in other GDP spikes: auto purchases and home buying. When someone buys a home, they tend to buy other things along with that purchase. It has ripples through the economy. That is a big part of what's happening now.

As for the rest of your post, I don't tend to split hairs over speculative numbers issued by governments. I tend to look at other data and see what that tells me. People are out of work, may still be laid off, may still not find work, but that doesn't mean the economy isn't headed to recovery. Job creation resulting from that will only happen down the road. It's how these things work. Many companies don't hire in anticipation of business; they usually hire when they have no other choice. (There are exceptions: retail, for example, but even then not everything is completely predictable.)

I was listening to a few pundints trying to rationalize Obama's reported decision to reject the military plans presented to him and I am in total disbelief as to how anyone percieves Obama's handling of this as a good thing.

Obama said to want revised Afghanistan options | 89.3 KPCC

I can respect keeping a military strategy secrete, the Normandy invasion comes to mind, but what I don't get is the apparent lack of communication and discipline within Obama's line of command. What is with all of these leaks and with making public announcements of what they agree with and what they disagree with?

Why would people present plans not knowing what Obama wanted in a general sense before they even started working on the plans? Why aren't they working on "a plan" as a team?

What is different today than 30 days ago, 60 days ago, 90 days ago, One year ago? What is he waiting for, what is he expecting to change?

I think we need to be all in or get out! And if we get out - just handle situations as they arise, but this is not a war were you can compromise your way into a good conclusion. I actually doubt an "all in" strategy would work.

How can anyone be satisfied with Obama's performance in handling this war?

which is why you're not the President

(that's not why.)

Merely one of many reason I'm glad Ace is not POTUS.

I agree with ace on this one issue. Obama is sitting on his thumbs here, and he needs to act now. People are dieing while he's not making decisions, I would like us to get out of there all together, but if we're going to stay and fight we need a much stronger presence than just the few thousand we do have there. Either way those soldiers deserve a decision.

Vietnam II

---------- Post added at 07:44 PM ---------- Previous post was at 07:42 PM ----------

I am too much of an "A-hole" to get enough people to like me enough. I make a good number 2 (pardon the pun) man. Obama needs someone like me willing to get in his face and talk truth.

---------- Post added at 07:47 PM ---------- Previous post was at 07:44 PM ----------

You have a problem with me because I know what I would do? You have a problem with either making a commitment or getting out? Are you one of those 40 year-old single people that have never been married?:)

People will be dying no matter what Obama does. It's a war. That's what happens to people during war.

In any case, I trust Obama to make a better decision than any of you yahoos.

Agreed, but people are dieing right now because they either need more troops or they need to leave. What is going on now clearly is not working so something has to change. The longer it takes to make that decision the more people will die. I understand that Obama wants to make the best decision possible but come on already, it's no different now that it was 11 months ago

But if he makes the wrong decision in an effort to "show conviction", more people could die than if he waited and made a better choice.

I'm not saying he's going to make a good choice in the end. What I am saying is that none of us are in a position to do anything but expose our own confirmation biases.

One does not "show" conviction, you either have it or you don't. The Afghanistan strategy decision is going to result in large groups of people hating the decision one way or the other, the decision will have dire consequences one way or the other, there is no easy choice, our leader needs to clearly communicate to us what he wants to do and lead. Whatever the decision, like it or not, I will support it. Unlike some I won't be claiming Obama lied or that this is Obama's war. We know what is at stake, we know the uncertainty, we know the consequences of whatever choice is made.

Reading between the lines I think Obama is making it clear that he wants to get out of Afghanistan, and I agree with that. Afghanistan is not the "right war".

You didn't deal with what filtherton said, though.

I do not understand what I missed.

I am not sure there is a "right" decision and if there is a "right" decision we will never know because we can only take one course of action and will never know what the other course would have lead to. The decision regarding war is a difficult decision and a person can easily be "paralyzed" in the fog of "what if", while in that fog, things still happen, some of these things can be negative or you can get lucky. I think Obama is in that "fog". I think many failed to understand Bush because he seemed to act with certainty. He clearly bore the weight of his decisions, did not take them lightly nor did he lie, and he took full responsibility for his decisions. Right now the world is looking to Obama for leadership and all I am saying is that this is the most important issue, requires his full attention, and requires confident actions. He needs to lead. Even on the matter of all of the leaks within his chain of command, I think it shows the degree to which we need decisive leadership. Every leak points to a lack of leadership and a lack of decisiveness.

A new T-shirt is available:

http://www.boingboing.net/2009/11/23/hope.jpg

I will say I am happy for his decision to send more troops to Afghanistan ( since it appears we'll be there a while) and the fact he actually restated the main purpose for our being there. Hopefully, he meant it when he stated:

I am still disappointed it took this long to decide, with what was said above, the pledge of troops should have been made much earlier.

I'll wait and see before I give total praise for this decision and his commitment. I'm more of a "Let's see if you mean it" type than a "Woohooo.... now, your doing something I can get behind."

I'm pretty much with you 100% on all that, pan.

Just like he promised during his campaign, President Obama is sending 35,000 MORE troops to Afghanistan, into an unwinnable situation. I voted against McCain because I knew that he would push for additional surges in Iraq and Afghanistan, and in addition antagonize Iran into a war, but make no mistake Obama was only the lesser of two evils.

But don't worry, at least the trans-Afghanistan pipeline will be okay.

Similar to liberals calling Iraq "Bush's war", I have a problem with Obama saying this:

I understand the words and I understand the inferred meaning, however, the suggestion inherent in those words is offensive. Perhaps others don't see it the way that I do, and I get that, but I want a leader to inspire without being divisive.

Huh. So even his conviction to finish the job doesn't earn him any points from you? I thought a president got a pass from you on anything they did as long as they had convictions and stood by them? Now suddenly being a uniter is an important value in a president? Was it an important value during the Bush years?

No, I would have a problem with you being POTUS because I disagree with most of your ideas.

And not that it's really any of your concern I was married to the same person for a little over 25yrs.

I understand the difficulty in understanding my point, it is kind of subtle and my ability to put it in words is limited. As an example, I played football, football is a team sport, if my Q-back made the comment " I am going to win this game", rather than "we are going to win this game", I would conclude the guy was not a team player and was in it for personal glory. That is not a way to motivate your team mates. Or if the Q-back made the inference that the previous Q-back screwed up and that - "I am going to finish this", I would again assume he was not a team player. I would rather he say something like - "o.k. guys let's get this game finished so we can go home with a win"

"pass" is not the correct word. there are always consequences for actions, in the short-term even doing what is right may have negative consequences. I simply have respect for those who stand firm in the face of conflicting pressures when they make a choice based on their honest beliefs.

I was united with Bush and his goals I felt his goals were our goals given his clarity, two election victories, Congressional and international support. I was willing to sacrifice and support his vision. I will do the same for Obama if he wants my support, does he?

---------- Post added at 11:12 PM ---------- Previous post was at 11:05 PM ----------

I don't support troop increases in Afghanistan and I think we should leave the country because it is an unwinable situation. do you agree or disagree?

I support single payer health-care for every child in this country. Do you agree or disagree?

I support a person freedom to partake in the "drug" of their choice. Do you agree or disagree?

I support balancing our federal budget. Do you agree or disagree?

I bet if you seperated your distaste of my personality or my writing style, you may actually agree with me on more than you would be willing to admit.

Congratulations, I am at 15 years - seems like yesterday.:thumbsup: