Economy Shrinks At 6.1 Percent Pace

[Mari333]

Source: CBS news

(AP) The economy shrank at a worse-than-expected 6.1 percent pace at the start of this year as sharp cutbacks by businesses and the biggest drop in U.S. exports in 40 years overwhelmed a rebound in consumer spending.

The Commerce Department's report, released Wednesday, dashed hopes that the recession's grip on the country loosened in the first quarter. Economists surveyed by Thomson Reuters expected a 5 percent annualized decline.

Instead, the economy ended up performing nearly as bad as it had in the final three months of last year when it logged the worst slide in a quarter-century, contracting at a 6.3 percent pace. Nervous consumers played a prominent role in that dismal showing as they ratcheted back spending in the face of rising unemployment, falling home values and shrinking nest eggs.

Read more: http://www.cbsnews.com/stories/2009/04/29/business/main4976884.shtml?tag=topHome;topStories

---

drop in US exports. what the hell do we export? we dont make anything anymore. Outsourcing, indeed.

[marketcrazy1]

1. great news :sarcasm:

and only SIX of the nineteen largest banks may need to raise more capitol... MARKET RALLY!!!!???

[Dr.Phool]

9. And the dollar is tanking!

Time for a sucker rally!

The Dow is up!

BUY! BUY! BUY!

[Lone_Star_Dem]

2. I believe industrial supplies were one of our largest exports

Petroleum products being pretty high on the list and they've taken a major downturn in demand. We also exported a great deal of raw material such as steel making products, which there's also much less demand for at the moment.

[dipsydoodle]

3. Not mentioned there but in addition exports fell by 30%

random link to the subject : http://www.marketwatch.com/news/story/story.aspx?guid=1F7DA128-B84B-413A-905B-785498863029

I suppose on the brightside ? imports fell by even more.

[Mari333]

6. outsource the manufacturing base

and this is what you get. problem is, the companies that outsourced the jobs for cheap slave labour now have no one to buy their stinking goods. serves them right.

[xchrom]

4. 6.1%!? -- man this is horrifying. nt

[brentspeak]

5. In other words, TARP was indeed a grand heist

And we've been sold out by politicians who allowed our livelihoods to be shipped to other countries.

[Mari333]

7. just like reagan

he got his tax breaks for the corporations, and promised they would rebuild in the usa..instead they took their profits and moved overseas and to mexico...and the manufacturing base left..
same thing happening now...are any of these TARP recipients being regulated concerning where they set up jobs or new industry? hell no..not one politician is saying 'If you get this tax money you HAVE to keep the jobs in the USA..'
same old shit.

[InkAddict]

18. Now we also get to bid on "buying" the jobs back

when TARP is not enough...

http://www.dispatchpolitics.com/live/content/local_news/stories/2009/04/28/copy/chase_jobs_print.ART_ART_04-28-09_A1_E9DMHIO.html?adsec=politics&sid=101

Officials sweeten deal for Chase
Financial giant gets tax incentives to possibly bring 1,150 jobs here

Ohio officials took a significant step forward in their bid to bring 1,150 new JPMorgan Chase jobs to the Columbus area by approving a $14 million tax incentive yesterday.

City and state officials have been courting Chase in recent months as the company looks to consolidate operations following the purchases of Washington Mutual and Bear Stearns.

Chase has not committed to bringing the jobs here, and Ohio is competing against Michigan, Texas, Louisiana and New York.

[davekriss]

8. Conventional definition of a depression...

...includes a GDP decline of 10% or more. This puts us well below the 10% threshold since the downturn began in December 2007. If there was any doubt, now there shouldn't be. We are in a Depression.

On edit, I stand corrected. These back-to-back declines are annualized numbers. The economy didn't actually decline 6.3% last quarter, more like 1.5%. The last two quarters combined amount to a GDP reduction of 3.2%. Pretty awful -- and the second worst 2-quarter performance since 1958 -- but not the stuff from which Depressions are made. See here for more.

[AngryAmish]

10. yikes!

[OhioChick]

11. But, But, But the Dow is Up! n/t

[earthside]

14. 150 Points!

At 9:45 AM in Denver, the Dow is "surging" ... up 150 points.

Well, negative growth is more negative; the big banks need more "capital" (in other words the last two months of "profitability" stories were accounting lies); Pontiac is closing down; hundreds of GM dealerships are going to be closed; for all intents and purposes GM and Chrysler are bankrupt; unemployment claims are up -- and the federal debt is exploding.

So, the Dow is rallying. If there is a prime example that Wall Street is a big casino, this is it. Those trading up the Dow are just speculators and gamblers, period. Those folks could care less about product or quality service or jobs, it is all about bluffing and dealing and lying.

What is so disgusting is that it is our money and our children's money and our grandchildren's money that is being used to prop-up these gamblers, to socialize their private risk.

What the Dow is doing in the face of this news today is exactly why this economic crisis is going to get worse, much worse. The disconnect between average people and the insiders on Wall Street and in Washington is causing more cynicism and distrust and doubt -- I wouldn't invest in any securities now because there is just way too much lying and spinning going on.

I want truth, even if it means taking a hit in the short term ... but the way things are going means that the pain is going to be deeper and last longer than if we let Citi collapse and put Jamie Dimond in jail.

[Old Hob]

17. I guess a shrinking GDP is a good indicator of potential future economic growth now. nt

[ChromeFoundry]

12. "what the hell do we export? "

JOBS.

[Mari333]

15. ...

:thumbsup:

[Winterblues]

13. Quick give AIG and Citi Bank another hundred billion... That will certainly fix everything..

:shrug:

[TheWatcher]

16. And Yet, because we now have a Media that feeds us Soviet Level Propaganda everyday

We are being told this is GOOD NEWS.

Check THIS Out:

Wall Street rises as inventory drop spurs optimism

NEW YORK (Reuters) - Stocks extended gains on Wednesday on better-than-expected earnings and government data that suggested companies may start to rebuild inventories, even as the economy shrank more than expected in the first quarter.

On the earnings front, Time Warner Inc (NYSE:TWX - News) and Qwest Communications International Inc (NYSE:Q - News) provided a lift after reporting better-than-expected results.

Government data showed gross domestic product dropped more than expected, but a decline in inventories was good news as it suggested manufacturers and retailers had reduced the stock of unsold merchandise, which could be key in pulling the economy out of recession.

"What everybody is hanging their hat on is this inventory draw, and the expectation that inventories are that far down that the next thing that's going to happen is that you're going to have to build inventories and we're going to have start manufacturing," said Paul Nolte at Hinsdale Associates in Hinsdale Illinois.

http://finance.yahoo.com/news/Wall-Street-rises-as-rb-15069195.html;_ylt=Au8kYHJ9vxDmtEMLWJJW4oG7YWsA?sec=topStories&pos=main&asset=&ccode=

Manufacturing? MANUFACTURING WHAT? Maybe someone forgot to tell Mr. Nolte That this country is a SERVICE Economy Miracle now, and Manufactures very little anymore

Also from the article:

Qwest gained 6 percent to $3.78 after the telecommunications company posted better-than-expected results amid cost cutting. Translation: We're going to lay more serfs off

Shares of Time Warner rose 7 percent to $23.30 after the media group posted flat first-quarter profit, but its revenue decline was smaller than expected. Translation: Once again, the bar was set so low by the ANALysts that we could have only sold one Basic Cable package to a hapless couple in Dallas and beat the expectations

And this is the way it was been throughout this unprecedented Propaganda Campaign. The real economy is NOT showing signs of improvement, yet they are trying DESPERATELY to tell us it is.

WE NEED JOBS. NOT PROPAGANDA.

And since no one is paying attention, Bank Of America quietly announced it's going to need more Capital (After saying SEVERAL times now that it wouldn't need any more help), and The Dollar is in Freefall today.

Welcome to AMERIKA and The New EKONOMY.

So full of Shit that it could fertilize the Planet for a full harvest.

:banghead:

[Psephos]

19. "what the hell do we export? we dont make anything anymore" - this myth needs to die

The US remains the world's top industrial economy. In fact, just the industrial component of the US economy is larger than the entire Chinese economy.

See for yourself:

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_sector_composition

Relevant numbers (in billions of dollars):

US GDP: $13,220
US Industrial Sector: $2,696

Chinese GDP: $2,512
Chinese Industrial Sector: $1,208

Read more here:
https://www.cia.gov/library/publications/the-world-factbook/geos/us.html


Yes, we are slipping, and yes, we need to re-learn that a strong industrial base is the foundation of a strong economy able to pay for all the things we want our citizens to have. Most importantly, we have to stop spending more than we take in. The US government is now by far the world's largest debtor. I hope Obama sticks to what he promised during the campaign, and works to stop the insanity of trillion-dollar deficits.

Meanwhile, the idea that we have lost our industrial eminence is completely false, and I hope to see that false meme die soon.

[Mari333]

20. I think if we stop exporting mayhem and endless wars

we might see a huge uptick in the economy overall. :)

[Psephos]

22. hard to argue with that :) n/t

[treestar]

21. Thank you!

Facts are always good - there is too little understanding of the economy and how it works on DU.

[Psephos]

23. There's a saying...

"A few observations and much reasoning lead to error; many
observations and a little reasoning lead to truth."

I think we have all the economic tools we need to realize the American promise. We just haven't learned to use them to the best advantage of all yet. :) Godspeed to Obama...and best wishes to you.

[SOS]

25. From CIA Factbook

China GDP (purchasing power parity):
$7.8 trillion (2008 est.)

China GDP (official exchange rate):
$4.222 trillion (2008 est.)

https://www.cia.gov/library/publications/the-world-factbook/print/ch.html

Seems that wikipedia is off by a few trillion.

[Psephos]

26. Actually, the wikipedia article is sourced from the CIA factbook

Couple of things to bear in mind. The figures are, as you noted, different when estimating purchasing parity, rather than official exchange rate. The RMB is held artificially low by the Chinese government to keep their balance of payments voraciously in their favor.

Also, the wiki page shows a three-sector composite (Agriculture, Industrial, and Service) analysis whose figures are based on CIA estimates in the case of nontransparent economies. China's official economy and actual economy are two different beasts. The three part figures do not show the entire economy, only those major sectors (e.g., US official GDP is more like $14.5 trillion last year.)

My opinion is that Chinese economic power is underestimated by these figures, despite its considerably smaller industrial output, due to its extraordinary $2 trillion in foreign reserves. Cash is king when times are bad. The US, on the other hand, is doing exactly the opposite - borrowing like crazy. It will not end well.

[nadinbrzezinski]

24. I was going to point out that we do export stuff

but somebody did a far better job