http://www.nytimes.com/2013/03/01/business/economy/us-economy-barely-grew-in-fourth-quarter-revision-shows.html
http://www.nytimes.com/interactive/2013/02/22/business/Growth-Vanishes-in-Developed-Economies.html
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"A strategy that doesn't take into account resources is doomed to failure." (John C. Maxwell)
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Hold the presses! Wait for it! The Commerce Department has "revised" 4th quarter 2012 U.S. economic growth from its initial estimate of -0.1% (annual rate of GDP growth) to +0.1%. I, for one, cannot contain myself!
But, as Catherine Rampell pointed out: "...at least the economy did not shrink..."
If you place the U.S. data into the 34 country O.E.C.D. "Change In Real GDP" chart attached, "Growth Vanishes" is the perfect title for the situation. The combined economies of those 34 countries shrank in the fourth quarter of 2012. That's the first time since the worldwide financial crisis and only the 13th quarter with such a downturn since 1961.
Fortunately, I posted Jeremy Siegel's perspective yesterday from K@W where he observed, among other things, that the U.S. economy could be growing at 3% to 4% by the fourth quarter of this year even with the "sequester." With corporate earnings at all time record levels and a Dow that could go as high as 15,000 by year end, it's hard to argue with his perspective.
I choose to think positive.
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China could help:
ReplyDeletehttp://www.reuters.com/article/2013/03/05/us-china-parliament-idUSBRE92402R20130305
big picture = more demand
I like Siegel. His reputation proceeds him. Why the tried and true trump the bold and new is a great read too.
I would not think much of gold. Few people know how to play that game. It seems mainly a herd mentality driven by politics and news articles, hardly by risk analysis. That Dalio guy thinks all assets perform at about the same ROI when adjusted for risk, but I don't know. Meaning... stocks are the flavor of the season. Maybe bonds will be better in 2014.
Yep. There is always something positive going on. I think Obama has enough smart people on board to avoid destabilizing the economy. The idea is to slowly decrease debt driven growth without affecting non-debt driven growth. Do it too fast and you can't keep up with debt payments because markets panic. The gold craze probably resulted from press releases from the Federal Reserve and White House that seem to sometimes test markets with their comments. Say some stuff and watch the reactions. The reactions play a role in policy creation.
Emerging markets should help. All emerging markets still have "low hanging fruit" in terms of productivity gains. They will increase income and consumer demand. Devaluation of the dollar means cheap USA goods and countries buying more USA stuff. Thinking in broad strokes... We will get through this, but it will be slow.
I am more concerned about healthcare and social security. Those are long term challenges the public needed to resolve decades ago. I think Mankiw and Krugman can both agree on that.