Posts filed under “Financial Press”

Q4 Nominal GDP: Worst Since 1958

Yesterday, I was busy dealing with two big projects: John Mauldin’s newsletter, and interviewing new publishers for the next book (no, it ain’t gonna be McGraw Hill again).

This kept me away from my favorite wonk activity, dissecting the latest government data dump. Or as it is known on college campuses across the land, Intro to Creative Writing & Poetry.

Barron’s Randall Forsyth takes a swipe at the numbers:

“The litany of woes was capped by the government’s first stab at estimating the fourth quarter’s gross domestic product, which was shown to have contracted at a 3.8% annual rate, after the usual adjustment for inflation and seasonal factors. Though much worse than the 0.5% decline in the third quarter, it was less severe than the 5%-6% drop forecast by economists, if that offers any solace.

The skid was tempered by an unexpected rise in inventories, which added some 1.3 percentage points to the headline GDP number, according to Steven Wieting, economist at Citigroup. Excluding inventories, real final sales shrank at a sharp 5.1% annual pace, about as expected and much more severe than the 1.3% contraction in the preceding quarter. That points to destocking in this quarter and the quarters ahead as production is cut to bring it in line with demand.

But falling prices also made the real decline appear less severe than it was. Nominal GDP collapsed at a 4.1% annual rate in the latest quarter, the sharpest drop in a half a century. And it would have been worse were it not for Uncle Sam’s spending; private final sales plunged by 6.5% while government spending expanded at a 1.9% pace despite contracting state and local expenditures.

“Once again, real GDP growth appears to be a poor metric of the recession,” write John Ryding and Conrad DeQuadros, economists at RDQ Economics. Consumer spending plunged at a 3.5% annual rate in the current quarter, residential investment collapsed at a 23.6% rate and real business spending plummeted 19.1%. “There was no demand from the private sector in the fourth quarter,” they conclude. And the same was true globally. Exports fell at a 20% annual rate as the recession spread abroad.

While real GDP was the weakest since 1982, nominal GDP was the worst since 1958. The difference is falling prices, which makes the real measure seem less dire. But Ryding and De Quadros contend that the unemployment rate is a better indicator of the economy than GDP. As the tally of the layoffs rises, that paints a still-drearier picture. (emphasis added)

I’ve had a pretty reliable gut on the real economy versus official economic data  — its not fat, its actually filled with proprietary economic sensors — and this is only part of the story. My Spidey-sense tells me there is much more to this number than the usual soon-to-be-revised downwards preliminary data.

I’ll hunt about to see if there is anything beyond the usual funny stuff going on . . .

>

Source:
What’s So Super?
RANDALL W. FORSYTH
Barron’s JANUARY 31, 2009

http://online.barrons.com/article/SB123335939695435159.html

Gross Domestic Product (GDP)
8:30 A.M. EST, FRIDAY, JANUARY 30, 2009

http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

http://www.bea.gov/national/index.htm#gdp

Category: Data Analysis, Economy, Financial Press, Markets

BBC: THE ORACLE (part II)

Max Keiser ‘s BBC show THE ORACLE January 16th 2009 part 2 of 2

THE ORACLE January 16th 2009 part 2 of 2 with Max Keiser and Stacy Herbert ;

guests are : Ullrich Fichtner , Nigel Eccles, Alec Baldwin and Carrie Quinlan ;

sujects are : what free spending and credit addicted economies like the US and UK can learn from the more prudent Germans, and what difference an Obama presidency might make?

Category: Bailouts, Financial Press, Humor, Markets, Video

BBC: THE ORACLE (part I)

Lovable financial curmudgeon, goldbug, and activist Max Keiser has a new show on BBC Worldwide: The Oracle, in which he predicts the future outcomes of today’s financial chaos.

THE ORACLE January 16th 2009 part 1 of 2 with Max Keiser and Stacy Herbert ;

guests are : Ullrich Fichtner , Nigel Eccles, Alec Baldwin and Carrie Quinlan ;

sujects are : what free spending and credit addicted economies like the US and UK can learn from the more prudent Germans, and what difference an Obama presidency might make?

via boingboing

Part II tomorrow evening!

Category: Bailouts, Financial Press, Humor, Video

Bush’s Economic Mistakes

With all inauguration coverage, all the time today, I thought we might try to keep the focus on erconomic/market related matters. Time magazine has an article on Bush’s economics mistakes that I would direct you to except for the annoying 9 page clicks required (click whores!). Rather than send you there, I’ll give you the…Read More

Category: Economy, Financial Press, Markets, Politics, Regulation

Barron’s Mea Culpa

One of the criticisms I regularly make about the Financial Media is their lack of accountability for their own bad advice, as well as that of the many awful guests they have on. Its a wonder that some people get quoted or appear on television so regularly, given their lack of acumen, insight and terrible…Read More

Category: Financial Press, Markets, Trading

Why We Haven’t Been Attacked Since 9/11

Barron’s Alan Abelson comes forth with the reason why the terrorists have not attacked the USA since 9/11. They didn’t have to: Thanks to his vigilance, this nation was spared a terrorist attack after 9/11. And so it was, for which we are all profoundly grateful. And only the most vehement Bush-basher would sniff that…Read More

Category: Financial Press, Politics, War/Defense

Why we know less than ever about the world

Alisa Miller, head of Public Radio International, talks about why — though we want to know more about the world than ever — the US media is actually showing less. Eye-opening stats and graphs.

(This is why I frequently watch BBC news)

May 2008

As the CEO of Public Radio International, Alisa Miller works to bring the most significant news stories to millions — empowering Americans with the knowledge to make choices in an… Full bio and more links

Category: Financial Press, Video

What 60 Minutes Missed on Oil Speculation

Last night’s 60 Minutes had a story on Oil Speculation. Its not that they said anything that was factually wrong per se, its more that they told 10% of the story of the rise and fall of energy prices. The entire report was surprisingly thin, and avoided discussing all of the many other factors that…Read More

Category: Commodities, Energy, Financial Press, Markets, Really, really bad calls, Trading

Layman’s Finance Crisis Glossary

Killer glossary via the BBC: click for full crisis glossary > Source: The layman’s finance crisis glossary BBC, 10:14 GMT, Thursday, 8 January 2009 http://news.bbc.co.uk/2/hi/uk_news/magazine/7642138.stm

Category: Bailouts, Derivatives, Financial Press, Markets

Video-O-Rama: Figuring out the lie of the financial land

Video-o-rama: Figuring out the lie of the financial land

In addition to more “Outlook for 2009″ videos (dealt with in last week’s Video-o-rama), the past week saw material covering a hodgepodge of topics. Although the topics were varied, good viewing material was produced, with the likes of Marc Faber, Peter Schiff, Martin Feldstein, Barton Biggs, Jeff Saut and Bill Gross in attendance.

A few of the more interesting clips that attracted my attention are shared below, including a few items warning about a bubble in government bonds.

But before we get to the economy and the financial markets, please spend a few minutes viewing a worthwhile three-part production by the Wall Street Journal entitled the “End of Wall Street” – What happened? Why did it happen? And what happens next?

The Wall Street Journal: End of Wall Street
Chapter one: What happened?. In the first of this three-part series, Journal reporters explain how the housing bubble inflated and burst, and why easy money led to the collapse of Wall Street’s biggest financial institutions.
Click here or on the image below for Chapter one.

9-jan-1b.jpg
Chapter two: Why did it happened? What was going through the minds of CEOs, corporate boards, fund managers and mortgage lenders as they created hard-to-understand derivatives Warren Buffett once called ‘weapons of financial mass destruction’.

Click here for Chaper two.

Chapter three: What happens next? This final chapter of the crisis on Wall Street tells the story of the $700-billion bailout, as seen through a reporter’s eyes, and looks at what’s ahead for the global economy.

Click here for Chapter three.

Source: The Wall Street Journal, January 5, 2009.

Read More

Category: BP Cafe, Financial Press, Markets