Neubarth
At the Ballpark July 30th
The economy really did not grow in the 3rd quarter.
You guys know that I have posted all the economic numbers. If you look at them, you realize that there is no real economic growth. The real data on construction, industrial production, sales and so on do not support any real improvement in the economy, only minor fluctuations. Even that suspect government data proves that without the stimulus spending the economy was still contracting at a horrific rate. The actual unemployment numbers soared to well over 22 percent regardless of what numbers the government made up from their pretend surveys. I have never met a person who was ever contacted for a Department of Labor employment survey. If they are contacting so many thousands of people for each report, they must be a select group that is not representative of the real population out there. Unemployment in the Central Valley farm towns is well over fifty percent. It is a mess up there.
When subtracting government stimulus spending, the economy did not start to recover at all in the third quarter. But, but, but, people tell me that the newspapers are all saying that we are in recovery. They pick up the stories as they are released by the Federal Government and do no research. I did not see one newspaper that did any research on the New Housing numbers. Not one reported that the numbers were below the numbers from two, three or four months earlier. Increase? It was just more of the steady decrease that we have seen across the board.
The first OUTRAGEOUS estimate for third-quarter growth had the economy expanding at a 3.5% annual pace. Last month as is the norm for this year, that number was revised to 2.8%. On Tuesday, the Commerce Department cut its estimate further to 2.2%. How low can they go? Does anybody really believe the numbers. I'd say that they are more believable now then they were two months ago.
Quarterly GDP figures are always revised three times, but the revisions are seldom this negative. Commerce attributes the tumbling estimate to "worse than originally estimated investment, inventory restocking and consumption." The really discouraging news is which sectors of the economy contributed the most to growth: Motor vehicles added 1.45 percentage points, residential investment added 0.43 percentage points and government spending added 0.55, for a total of 2.43 percentage points. (You have got to get into the fine print to read that.)
The strength in motor vehicles is mostly attributable to the cash-for-clunkers program, while housing is only standing because of record-low interest rates, the government nationalization of Fannie Mae and Freddie Mac, and the Federal Reserve's $1.25 trillion program to purchase mortgage securities. They bought my mortgage early this year at 4.325 percent. As we know, government spending is, of course, government spending. It is liberally applied and mostly wasted.
Now, look at the numbers. If it were not for these factors, the economy would have shrunk in the third quarter. Or, in other words, real economy did not really recover or grow in the third quarter.
So far, our stimulus plan is not working and most certainly is not putting people to work. The real economy is still contracting as I type this, and there are no data to contradict what I have been saying for six months. In spite of all the present administration penchant for lies and deception, there is not any real recovery in progress.
Did you see the news releases yesterday about the fantastic increase in existing home sales? The market took off on that news and I profited a little because of my investment (bet that the market would go up against all logic)
And this turnover of home ownership with a substantial portion of the sales coming from foreclosure auctions boosts the economy in what way???? The answer is, "It does not boost the economy at all. The foreclosure auctions have lowered the average home sale in the US by a considerable price. That is not good as it will further increase defaults and then there will be more foreclosures and more auctions. Be prepared for the civic unrest this Summer. I saw a hint of it in Oakland in January of last year when their downtown riot damaged a lot of stores and businesses.
Unless we find a way to put people to work instead of telling them that things are getting better when they are not, we are going to have a long hot summer ahead
You guys know that I have posted all the economic numbers. If you look at them, you realize that there is no real economic growth. The real data on construction, industrial production, sales and so on do not support any real improvement in the economy, only minor fluctuations. Even that suspect government data proves that without the stimulus spending the economy was still contracting at a horrific rate. The actual unemployment numbers soared to well over 22 percent regardless of what numbers the government made up from their pretend surveys. I have never met a person who was ever contacted for a Department of Labor employment survey. If they are contacting so many thousands of people for each report, they must be a select group that is not representative of the real population out there. Unemployment in the Central Valley farm towns is well over fifty percent. It is a mess up there.
When subtracting government stimulus spending, the economy did not start to recover at all in the third quarter. But, but, but, people tell me that the newspapers are all saying that we are in recovery. They pick up the stories as they are released by the Federal Government and do no research. I did not see one newspaper that did any research on the New Housing numbers. Not one reported that the numbers were below the numbers from two, three or four months earlier. Increase? It was just more of the steady decrease that we have seen across the board.
The first OUTRAGEOUS estimate for third-quarter growth had the economy expanding at a 3.5% annual pace. Last month as is the norm for this year, that number was revised to 2.8%. On Tuesday, the Commerce Department cut its estimate further to 2.2%. How low can they go? Does anybody really believe the numbers. I'd say that they are more believable now then they were two months ago.
Quarterly GDP figures are always revised three times, but the revisions are seldom this negative. Commerce attributes the tumbling estimate to "worse than originally estimated investment, inventory restocking and consumption." The really discouraging news is which sectors of the economy contributed the most to growth: Motor vehicles added 1.45 percentage points, residential investment added 0.43 percentage points and government spending added 0.55, for a total of 2.43 percentage points. (You have got to get into the fine print to read that.)
The strength in motor vehicles is mostly attributable to the cash-for-clunkers program, while housing is only standing because of record-low interest rates, the government nationalization of Fannie Mae and Freddie Mac, and the Federal Reserve's $1.25 trillion program to purchase mortgage securities. They bought my mortgage early this year at 4.325 percent. As we know, government spending is, of course, government spending. It is liberally applied and mostly wasted.
Now, look at the numbers. If it were not for these factors, the economy would have shrunk in the third quarter. Or, in other words, real economy did not really recover or grow in the third quarter.
So far, our stimulus plan is not working and most certainly is not putting people to work. The real economy is still contracting as I type this, and there are no data to contradict what I have been saying for six months. In spite of all the present administration penchant for lies and deception, there is not any real recovery in progress.
Did you see the news releases yesterday about the fantastic increase in existing home sales? The market took off on that news and I profited a little because of my investment (bet that the market would go up against all logic)
And this turnover of home ownership with a substantial portion of the sales coming from foreclosure auctions boosts the economy in what way???? The answer is, "It does not boost the economy at all. The foreclosure auctions have lowered the average home sale in the US by a considerable price. That is not good as it will further increase defaults and then there will be more foreclosures and more auctions. Be prepared for the civic unrest this Summer. I saw a hint of it in Oakland in January of last year when their downtown riot damaged a lot of stores and businesses.
Unless we find a way to put people to work instead of telling them that things are getting better when they are not, we are going to have a long hot summer ahead
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