Economy Surprises Experts With Sudden Slowdown

[Robert Oak]

U.S. economic growth slowed sharply in the first three months of the year, to the weakest pace in two years, as surging energy costs caused consumers and businesses to rein in their spending.

http://www.washingtonpost.com/wp-dyn/content/article/2005/04/28/AR2005042800365.html

Duh, I don't know what this title says "surprise" unless you have your
heard stuck in a toilet as seemingly these "corporate pundit economists" do.

[latebloomer]

1. Doesn't surprise any of us!

Then again, we seem to be a lot more conscious than most of the population.

[KlatooBNikto]

2. Everything is a surprise to these shills who lead sheltered lives

on their sinecures from Foundations.

[tridim]

3. Time to redefine the word "expert"

Anyone who buys groceries and fills their tank knows the economy is in serious trouble. We are the experts.

[DELUSIONAL]

6. Ain't that the TRUTH!!

[xray s]

4. Expert texpert choking smoker don't you think the joker laughs at you?

he he he ha ha ha

[autorank]

5. And why were they surprised. Hadn't they noticed the deficit, balance of

trade, and value of the dollar; not to mention sending all the good jobs overseas. Memo to economists: when people don't have good jobs they can't buy expensive stuff or even moderately priced stuff.

They call economics the dismal science not because of their predictions but because they're such dismal intellects.

[Warpy]

9. Exactly, they've choked off the 2/3 of the economy

that is consumer driven. Even people with "safe" jobs are noticing a slowdown as fewer people are in search of that face to face service they provide, from hairdressers to doctors.

Supply side economics is once again proving to be an exercise in dumbfuckery.

[autorank]

13. So right. Will the corporate "sheeple" wake up? As for supply side,

Bush makes that look good. His economics is best referred to as

Crackonomics...just take a big breath and feel the rush. But when the geek shows up, there is Hell to pay.

:hi:

[Coastie for Truth]

7. Like Andy Griffith used to say "Surprise, Surprise..."

1) Everybody is feeling high gas prices.

Within the "set of everybody" there is a "smaller subset of those who read the newspapers and/or watch the news" and there is a "still smaller subset" who know that there is something called "Peak Oil"


And, in that "still smaller subset" who know that there is something called "Peak Oil" - some of them realize "It ain't gonna get better" and "gasoline will never go down and stay down - ever again."

and they are not buying Big American cars - such as SUVs.

2) And, if they don't buy Big American cars - auto workers get laid off (okay - they get 95% lay off pay), and vendor employees get laid off (guess what - they don't get "lay off pay") - so they are not exactly beating down the doors to buy "consumer durables." Even if they still have a job -- if their brother in law got laid off, it's the old "I could be next" --- so they are not exactly beating down the doors to buy "consumer durables" even if they have a job.

3) And, we've cut government spending on infrastructure and started laying off cops and firefighters and teachers to pay for a war, and to give the top 2% a tax cut --- so the infrastructure builders and cops and firefighters and teachers are not exactly beating down the doors to buy "consumer durables."

4) And, as employers cut back on health insurance (higher premiums for workers, higher deductibles and co-pays, and many part timers and older workers don't even have insurance -- that cuts back on "discretionary income" - and if you are shepherding your "discretionary income" - you are not spending it.

5) And with pension plans folding (being taken over by the FPBGC, with reduced pension payments) - folks that can't get jobs as Greeters at Wal-Mart and Home Depot are cutting back.

No fooling we have a "slow down." It's going to turn into a full blown RECESSION - and given W's competence (or incompetence) - we could see a DEPRESSION.

"Slow Down" - I hope that's as bad as it gets.

Excuse me --:puke:

[raccoon]

14. Great posts, yours & autorank's too,

about the Memo to economists"

"...when people don't have good jobs they can't buy expensive stuff or even moderately priced stuff. "

Which is why I don't see how American economy has been going along as well as it has for as long as it has.

I've been thinking for the past few years:
"When everybody is working for WalMart or washing dogs,
who's going to buy the big-ticket items?"

Of course, I know that many Americans are in hock up to the eyeballs.
And with the new bankruptcy rules, instead of putting money back into buying goods (or trinkets), people will be paying their creditors back.

I used to think there would be a big CRASH one day. But right now I think it'll be just a slow slide, across the board, in most Americans' standard of living. (Which has been going on for, how long now? Several decades?)

[Coastie for Truth]

16. "Peak Oil" is another negative feature

I am not one of those Malthusians (see Kuntsler and Zerzan for real Malthusian analyses of "Peak Oil") - I am more of a Buckminster Fuller and Amory Lovins and Stan Ovshinky and Ken Deffeyes optimist. I think we will muddle through with slightly lowered "comfort" and "material" expectations as we shift from Hummers to electric versions of Mini-Coopers and move into pedestrian friendly "transit villages."

But - compound the current state of the Bush economy, and the health care crisis, and the proposed cuts in SS and the changes in bankruptcy law with "Peak Oil" -- and we are in for some hard times.

[raccoon]

19. Your idea of the not-too-distant future,

as described in the first paragraph, is much more comforting than a sudden, horrendous crash.

But that we are in for some hard times, no question about it.

[gizmo1979]

8. If you read the business section during

any given week you'll see economy is great,economy is bad,housing starts are up housing starts are down.Gas is coming down,gas is going up 25 cents a gallon.These guys all need to drink the same coolaid.

[wishlist]

10. No kidding- guess that's why all the crazy stock market zigzags

Seems like a giant crap shoot these days with anybody's guess as to what direction we're moving in and whether the economic data coming in bodes ill or well.

[fasttense]

11. OK I'll guess.

I have an unofficial bet going with my husband that the stock market will go below 900 before brush gets out of office. He says it wont go below 900, I say it will get into the 800s. But I have no training or experience in financing so this is simply a guess and makes watching the zigs and zags of the market more interesting.

What do you DUs think? How low will it go?

[wishlist]

12. Good bet that this year will see a decline based on April's drop

Do you mean the Dow will go below 9000 or the S & P below 900? Either one is certainly quite possible. According to this Bloomberg article about the April stock market performance:

" For the month, the Dow average slid 3 percent to 10,192.51. The last time the average had a bigger April drop was in 2002. The Dow finished that year down 17 percent. Since 1950, April has marked the best month of the year for the benchmark, climbing an average of 1.9 percent, according to the Stock Trader's Almanac."

" The Standard & Poor's 500 Index retreated 2 percent to 1156.85 in April. The Nasdaq Composite Index lost 3.9 percent to 1921.65 for its fourth straight monthly decline, the longest such streak since September 2002."

Sounds like this does not bode well for the rest of this year if past performance over 50 years is a good indicator, we may be in for at least a 10% drop by end of the year.


http://www.bloomberg.com/apps/news?pid=10000103&refer=us&sid=awU3r4WloibU

[fasttense]

17. Sorry about my blunder.

Yes, I meant 9,000 and 8,000 on the DOW. Thanks for the info. You're good at explaining in layman's terms what appears to me to be a tangle of information.

[jwcomer]

15. I would take the bet

Your husband will almost certainly win the bet. The economy would have to really tank in order for it to go below 9000 on a permanent basis, and even then it is doubtful. The reason is subtle. Currently the DOW is flat over the last two years with respect to the Euro. That is to say, if we priced the DOW in euros rather than dollars we would see it as almost perfectly flat. All the gains were just inflationary, paper dollar gains, not real. As the dollar weekens, the DOW will actually go up. In order for the DOW to drop in dollars, dollar circulation would have to decline and the fed will fight that with inflation. But given a depression type event it is possible.

[fasttense]

18. Oh, no, I just wont tell him that. Thanks for the info.

[jmcon007]

20. no worry.....another round of tax cuts will fix things right up...