GDP Is..... Better Than Expected? - Or Filled With Outright Lies? The Marke... - The Diigo Meta page

• 30 Oct 09
  

  Karthic Dixit

  • Current-dollar personal income decreased $15.5 billion (0.5 percent) in the third quarter, in contrast to an increase of $19.1 billion (0.6 percent) in the second.

    
    

    Personal current taxes increased $4.8 billion in the third quarter, in contrast to a decrease of $119.1 billion in the second.

    
    

    Eeeeehhh... those are both going the wrong way.  Taxes up, income down.  And...

    
    

    
    

    Disposable personal income decreased $20.4 billion (0.7 percent) in the third quarter, in contrast to an increase of $138.2 billion (5.2 percent) in the second. Real disposable personal income decreased 3.4 percent, in contrast to an increase of 3.8 percent.

    
    

    That's worse.  A lot worse.  Disposable personal income decreased in nominal terms q/o/q by 5.9% while in real terms (inflation adjusted) it decreased q/o/q by 7.2%!  That is an enormous swing in purchasing power and not in the right direction!

  • Personal outlays increased $148.2 billion (5.8 percent) in the third quarter, compared with an increase of $8.2 billion (0.3 percent) in the second. Personal saving -- disposable personal income less personal outlays -- was $364.6 billion in the third quarter, compared with $533.1 billion in the second.

    
    

    The personal saving rate -- saving as a percentage of disposable personal income -- was 3.3 percent in the third quarter, compared with 4.9 percent in the second.

    
    

    So into decreasing personal income and disposable personal income people tried to spend anyway.  Best guess: most of this was "cash for clunkers", which is the worst sort of "spending" - it is the taking on of more debt by replacing a paid-off car with one that now comes with a shiny (and nasty) payment book.  The Trade: Go long auto repo outfits (aside: as far as I know there are no publicly-traded repo companies.)

  • 3 more annotations...

  • • Looking inside the data, the "big change" in private domestic investment is all residential fixed - up 23.4%.  I don't believe it.  I've been scouring the homebuilder earnings releases and data, and I don't see the numbers that support this.  An improvement over the ditch-diving of the last many quarters, yes - but a 23.4% increase, a swing of fifty percent from Q2-Q3?  Oh hell no.  Where is it?  It's not in Home Depot's or Lowe's quarterly results, it's not in the homebuilders, and I can't find it in the suppliers (lumber companies, etc) either.  This sort of move would result in monstrous top-line revenue increases reported by firms in this sector and that simply has not happened.

      
      

      Nor do the export and import numbers look right.  Port of Long Beach and LA anyone?  Those numbers also don't add up - swings of 20-25% in one quarter?  Not reflected in container volumes and freight loadings.  Yet it has to be - how do you get something in or out of here without it going through a port?

    • Forward the big problem is the deterioration in personal income.  You can't spend what you don't have without credit creation, and that's fallen off a cliff.  The Fed's credit reports continue to come in with huge contractions - this should not surprise, as demanding that banks lend to people who are seeing their income shrink is into the realm of pure idiocy.

    • You cannot have an economic recovery when on a q/o/q basis real disposable income is contracting at a 7.4% annual rate and worse, the spread between nominal and real income is widening, indicating that mandatory purchases such a food, energy and health care - are increasing.

      
      
• 29 Oct 09
  

  Gary Edwards

  Whoa!  Incredible fact filled analysis of the pre election GDP numbers released by Obama.
  
  excerpt:  Disposable personal income decreased in nominal terms q/o/q by 5.9% while in real terms (inflation adjusted) it decreased q/o/q by 7.4%!  That is an enormous swing in purchasing power and not in the right direction!
  
  Personal outlays increased $148.2 billion (5.8 percent) in the third quarter, compared with an increase of $8.2 billion (0.3 percent) in the second. Personal saving -- disposable personal income less personal outlays -- was $364.6 billion in the third quarter, compared with $533.1 billion in the second.
  
  The personal saving rate -- saving as a percentage of disposable personal income -- was 3.3 percent in the third quarter, compared with 4.9 percent in the second.
  
  So into decreasing personal income and disposable personal income people tried to spend anyway.  Best guess: most of this was "cash for clunkers", which is the worst sort of "spending" - it is the taking on of more debt by replacing a paid-off car with one that now comes with a shiny (and nasty) payment book.  The Trade: Go long auto repo outfits (aside: as far as I know there are no publicly-traded repo companies.)
  
  Nothing in here I like; to the contrary, this report sucks and on a drill-down appears to be full of outright lies.

  obam-socialism marxism financial-crisis

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