Comments on: Falling Imports versus Falling Exports (GDP = -2.38%)

By: Weekend Reading | Froogalizer.com

Weekend Reading | Froogalizer.com — Sun, 02 Aug 2009 22:01:39 +0000

[...] Falling Imports versus falling Exports (Ritholtz) [...]

By: sailorman

sailorman — Sun, 02 Aug 2009 14:18:04 +0000

Here are some of the 2ndQ/1st Q comparison numbers direct from the government (BEA):.
Real federal government consumption expenditures and gross investment increased 10.9 percent
in the second quarter, in contrast to a decrease of 4.3 percent in the first. National defense increased
13.3 percent, in contrast to a decrease of 5.1 percent. Nondefense increased 6.0 percent, in contrast to a decrease of 2.5 percent. Real state and local government consumption expenditures and gross
investment increased 2.4 percent, in contrast to a decrease of 1.5 percent.

Real personal consumption expenditures decreased 1.2 percent in the second quarter, in contrast
to an increase of 0.6 percent in the first. Durable goods decreased 7.1 percent, in contrast to an increase
of 3.9 percent. Nondurable goods decreased 2.5 percent, in contrast to an increase of 1.9 percent.
Services increased 0.1 percent, in contrast to a decrease of 0.3 percent.

Real nonresidential fixed investment decreased 8.9 percent in the second quarter, compared with
a decrease of 39.2 percent in the first. Nonresidential structures decreased 8.9 percent, compared with a decrease of 43.6 percent. Equipment and software decreased 9.0 percent, compared with a decrease of 36.4 percent. Real residential fixed investment decreased 29.3 percent, compared with a decrease of
38.2 percent.

Clearly government spending prevented the GDP numbers from scaring the shit out of everyone. Does anyone in their right mind think this is good news! Only TV financial analysts and most news outlets can spin this as positive. If the comparison was 1st half of 2009 compared to 1st half of 2008 without government stimulus, the decrease would be staggering.

By: Readings for Week’s End | EconUp

Readings for Week’s End | EconUp — Sun, 02 Aug 2009 14:13:44 +0000

[...] A look at imports and exports suggests GDP not as good as it [...]

By: sailorman

sailorman — Sun, 02 Aug 2009 07:31:34 +0000

It’s not an oddity. This is the formula: GDP = private consumption + gross investment + government spending + (exports − imports)

The formula is measuring production within the US. If you start with consumption, you have to subtract the component of consumption produced somewhere else. By the same token, you have to add exports, since that captures production that is not part of domestic consumption, but produced domestically. How else could you arrive at the production number?

Since home purchases are part of the investment number, the real oddity is that a huge part of GDP was removed (home purchases) and replaced with government spending. What does that mean for the long run?

By: olephart

olephart — Sat, 01 Aug 2009 14:10:19 +0000

The Curmudgeon Says:
July 31st, 2009 at 12:12 pm

“is the owner’s equivalent rent, the imputation of rent that an owner would pay were he renting his house but that he’s not paying since he owns the house.”

To test this rationale, try paying your income tax with this imputed income and see if the IRS agrees with this concept.

By: Bob_in_MA

Bob_in_MA — Sat, 01 Aug 2009 12:40:34 +0000

It’s amazing that someone who has trouble understanding simple equations gets so much attention.

Barry i’s an example of someone who becomes a pundit by shear force of ego, and a love of attention.

By: Mike in Nola

Mike in Nola — Sat, 01 Aug 2009 11:59:56 +0000

froglips:

I dunno. Thinks look pretty bleak in Germany.
http://news.bbc.co.uk/2/hi/business/8177147.stm

By: Simon

Simon — Sat, 01 Aug 2009 08:35:04 +0000

The maths make sense to me. If GDP is a measure of domestic production and although both imports and exports are falling only exports less so that means the gap was made up from Domestic Production hence it is a positive contributor. But only if the gap was consumed and not saved and there in lies the rub. There is probably some way to check if the gap was saved or consumed but it would probably be wrong.

By: beaufou

beaufou — Sat, 01 Aug 2009 08:16:56 +0000

@ franklin411

You got a free beer to say this?
Seriously, you haven’t noticed that we are bankrupt living on borrowed Chinese time.
Our President?
You mean, the guy who can’t even get his own corrupt majority to vote for a bogus, do nothing Healthcare bill?

Buying low, yeah right, all those derivatives our national debt bought are real good, selling real high…

By: call me ahab

call me ahab — Sat, 01 Aug 2009 01:19:44 +0000

froglips-

watch your syntax my friend-

“In any case, Europe has avenues out of this mess the US does not have, in particular Russia who is let’s not forget geographically part of Europe and to a lesser extend Africa.”

sounds like you are saying Russia is part of Africa-

after I read it a time or two- i understood your point-

as you say- the world is being shook up a bit- will be interesting to see how it plays out- the US model has clearly seen better days