April 30, 2008

It's not a recession.

It's just not:
Economy grows by only 0.6 percent in 1st quarter of 2008

The bruised economy limped through the first quarter of this year at only 0.6 percent as housing and credit problems forced people and businesses alike to hunker down.

The country's economic growth during January through March was the same as in the final three months of last year, the Commerce Department reported Wednesday. The statistic did not meet what economists consider the classic definition of a recession, which is a retraction of the economy. This means that although the economy is stuck in a rut, it is still managing to grow, even if modestly.
Damned economists with their "classic" "definitions"... Why can't we just report what we know we all feel?

115 comments:

Fen said...

Why can't we just report what we know we all feel?

Because what we "feel" is heavily influenced by a media thats invested in their narrative.

Watch what happens if Clinton/Obama is elected. The economy will "recover" overnight, just like it did in 92.

Original Mike said...

Well, that will depress the Dems.

George said...

Never try to catch a falling knife, much less a falling chainsaw.

We know what that would feel like.

Dust Bunny Queen said...

As Fen said. The media, comprised of boobs who can't balance their own checkbooks and most of whom were wet dreams during our last "real" recession in the 1970's, are breathlessly and gleefully reporting all that is bad with the aim of getting "their" party back in the White House.

In 2008 if there isa Democrat in the Presidency there will be a miracle recovery of the economy. Amazing isn't it.

Are times hard right now with high gas and food prices? Of course. The economy always goes through cycles (Economics 101). Cope with it. What makes recessions into depressions is the meddling by idiots in Government in the natural course of the market cycle. They also have zero clue about economics but who want to make us all "feel" good and.... oh by the way get votes.

Original Mike said...

In 2008 if there is a Democrat in the Presidency there will be a miracle recovery of the economy.

Given the promised tax increases, that will take some creative writing (I'm sure they'll give it their best shot).

Paul Snively said...

Actually, a recession is two consecutive quarters of negative growth. So part of the problem with recessions is that they can only be correctly recognized ex post facto, after half a year of actual economic shrinkage.

The question that everyone is actually asking, "are we in a recession," is unanswerable. But it is also true that if enough people ask the question often enough, the answer will be "yes."

Roger J. said...

Paul Snivelyh: nicely said.

that-xmas said...

One of the talking head finance shows was talking about the current actions of the Federal Reserve, and how that is affecting the economy.

The Fed has two jobs, one is to maintain the health of the banks, the other is to maintain the health of the economy. The past two quarters, they've been focused on the former job, letting inflation run for a bit. Now that they've got a handle on the flailing investment banks, they can go back to checking inflation.

I dont' think we are in a recession, we have a very tiny amount of unemployment.

Balfegor said...

Watch what happens if Clinton/Obama is elected. The economy will "recover" overnight, just like it did in 92.

That's because it really had recovered -- it recovered before Clinton ever took office, but no one knew it had, because we didn't have final numbers on the previous quarter's economic performance. As Paul Snively says above, you can only classify these things in retrospect. Clinton was the beneficiary of good luck and good timing.

In the current climate, I kind of expect that it's going to be hard to claim that the first year of the next president's term is not a recession. Right now, we're teetering on the brink, but from my lay viewpoint, I kind of expect the next quarter to enter contraction. We might not enter full-blown recession until sometime in 2009. In 2000, we also had a year with dramatically slowed growth and outright contraction in the third quarter, but the recession, under the standard definition (2 quarters consecutive contraction) didn't hit until 2001. Either way, I don't think we'll be verifiably out of this recession until well into the next president's term. It'll be hard for the press to spin a magic instant recovery, come January 2009, and I doubt they'll even try.

Re: unemployment, my understanding is that unemployment is a lagging indicator both ways -- going into recession and coming out. I wouldn't take all that much heart from the unemployment numbers.

Roger J. said...

As for the overall economic environment, I suspect the rapid growth of a consumer economy in India and China have had a major role in shifting the demand curve up--bringing a billion consumers on-line plays havoc until such time as supplies adjust.

SteveR said...

I thought that not being able to buy more than 20 lbs of rice at a time was the definition of a recession. I mean we can easily dismiss the story laid out by the MSM and the presidential candiates, given their obvious motives, but I'm stuck having to resort to my lifelong procurement habit of a two pound bag every year.

George said...

Housing prices are going down further, maybe for another 18 months, as ARM resets will continue to peak through 2010. Markets are glutted with foreclosures. Weakness in residential real estate is going to continue to drag down commercial real estate.

This blog http://thehousingbubbleblog.com/index.html gathers real estate stories from around the US. One jaw-dropper after another.

Government statistics on inflation and unemployment and joblessness have been rigged for some years now and are not trustworthy. The CPI seems to exclude everything that's been going up.

To me, the situation resembles the Great Depression but with suburban ghost towns springing up around the country. Where is our Steinbeck? People go on, and they are walking from mortgages while continuing to max out their credit cards. The Joads would have done it, too.

Go to cnbc or bloomberg--check out the videos of economists like Stieglitz, Schiller, or Roubini (who has called the economy dead on for some time now). Even the ones who are bullish--well, I don't like their body language, tones of voice, or facial expressions.

Is anyone out there putting money into the US stock market, except professional traders? If so, who are you investing in, besides Apple? GE's a buy—still off more than 25% from 2000!

The tax rebate checks and the possible Fed cut today will goose the economy enough to keep it waddling until fall. (Is the Fed going to keep cutting rates? It's already pushed the wet noodle.) Interest rates are still high because banks can't afford to lower them. In fact, banks won't even tell each other the truth about their situations—that's why it finally came out that LIBOR was off by 0.3%. Libor is the uber-rate, and it was way off because banks were lying to each other. Nice.

History shows that the first two years of a new president's term are typically less positive economically than his latter years. Whoever wins in November is going to have a lot of cooked goose to eat.

KLDAVIS said...

Paul Snively said...

Actually, a recession is two consecutive quarters of negative growth. So part of the problem with recessions is that they can only be correctly recognized ex post facto, after half a year of actual economic shrinkage.

The question that everyone is actually asking, "are we in a recession," is unanswerable. But it is also true that if enough people ask the question often enough, the answer will be "yes."


Well, we have the numbers for last quarter, and they do not show negative growth. It is therefore impossible that we are currently in a recession. If, next quarter, we learn that there was negative growth this quarter, then it could certainly be argued that we may be in or heading toward one at that time. But, it is just plain false to imply that we are currently in a recession now that we have the numbers for last quarter.

Original Mike said...

To me, the situation resembles the Great Depression ...

I think you meant to post in the acid thread.

Balfegor said...

Is anyone out there putting money into the US stock market, except professional traders? If so, who are you investing in, besides Apple? GE's a buy—still off more than 25% from 2000!

I am. Automatic investments in index funds for my 401K and some other funds I hold with USAA. Yes. I'm losing lots and lots of money! I almost feel a sense of giddy anticipation when I open up my accounts to see how far I am out of the money today. It's character building. And I expect I'll end up making some of it up in the end. At least I'm not putting it all in houses.

Re: LIBOR -- that's hilarious. But it's supposed to be the offered rate. Between banks. No? Are the banks offering at one rate and charging at another? Or is there a blend that they're just calculating wrong so they can offer at nonmarket rates? (I can't see the entire article because I don't have a WSJ subscription -- I only see WSJ through googlenews)

Re: Great Depression, I think you forget exactly how bad that was. I think what we have to worry about is something like what Japan went through following the popping of their bubble. I suspect we'll recover more quickly than they did, but I also suspect that it will hurt us a lot more than it hurt them, and not just because our economy will adjust faster. Unlike Americans, Japanese people save a lot. You had families limping along for a decade and more on their savings and a bit of part time work here and there. Belts were tightened a bit, but you still saw all those NEETs and Freeters going around on expensive holiday trips and buying overpriced designer goods. I don't think the average American has much of a cushion of savings to fall back on. So it'll hurt a lot more.

Well, we have the numbers for last quarter, and they do not show negative growth. It is therefore impossible that we are currently in a recession.

Numbers are sometimes revised, both up and down. It's quite possible that those numbers are going to be revised downward at some point, and given that they're so low, it wouldn't take all that much to tip the scales.

FobwGal said...

DBQ - getting "their" party back in the White House - I don't think so. Brian Williams' blog notes that he's nominated Peggy Noonan for a Pulitzer. How does that make him a Dem?

It's an urban myth. Wake up.

Cyrus Pinkerton said...

DBQ wrote:

The media, comprised of boobs who can't balance their own checkbooks and most of whom were wet dreams during our last "real" recession in the 1970's, are breathlessly and gleefully reporting all that is bad with the aim of getting "their" party back in the White House.

As I recall, the media was busily reporting the economic slowdown and predictions of a recession in the summer and autumn of 2000. Therefore the notion that the media is acting in the interest of "their" party seems not to be supported by any evidence.

Moreover, the news item that Althouse links to is entirely consistent with the results from a survey of economists that was undertaken by the Wall Street Journal last month.

Economists in the latest Wall Street Journal forecasting survey are increasingly certain the U.S. has slid into recession, a view reinforced by new data showing a sharp drop in retail sales last month.

"The evidence is now beyond a reasonable doubt," said Scott Anderson of Wells Fargo & Co.

Thirty-six of 51 respondents, or more than 70%, said in a survey conducted March 7-11 that the economy is in recession....

The economists, on average, forecast meager economic growth -- just 0.1% at an annual rate in the current quarter, and 0.4% in the second.

Although the classic definition of recession is two consecutive quarters of declines in the gross domestic product, Stephen Stanley of RBS Greenwich Capital pointed out that the National Bureau of Economic Research, the nonpartisan organization that is the official arbiter of recessions, doesn't always strictly follow that definition. "If you go back to the 2001 recession, there was only one negative GDP quarter, and there might not even be one negative quarter in this recession," he said.

Almost half the economists surveyed said a recession this year could be worse than the 2001 and 1990-91 downturns. Amid the rising concerns, respondents expect more action from policy makers. Some 63% said the use of public money to deal with the housing crisis is now likely or certain, while on average they expect the Federal Reserve to lower the target for its benchmark federal-funds rate to 2% by June from the current 3%.


DBQ, do you believe the WSJ printed this survey of economists "with the aim of getting 'their' party back in the White House?"

Cyrus Pinkerton said...

Balfegor wrote:

Numbers are sometimes revised, both up and down. It's quite possible that those numbers are going to be revised downward at some point, and given that they're so low, it wouldn't take all that much to tip the scales.

Exactly right. In fact, the numbers are frequently revised. More to the point, since two consecutive quarters of declines in GDP are NOT required for a recession, it's not impossible that we are currently in a recession.

George said...

USA Today, April 30

Egypt's political tensions? "Very scary"

US real estate problems? "Intensifying" "Home prices tumble" "Foreclosures double"

Consumer confidence? "Dramatic declines"

Gynweth Paltrow? Having "super fun"

Obama? Playing hoops with the Heels.

Madonna? "A lucky star"

Miley Cyrus? One of the world's 100 most influential people.

Quayle said...

The reasons we don't just report on what we all know we feel, is because what we feel is manipulatable by a flood of negative media.

I cite to the election of Bill Clinton, where the economy had turned back up a full 6 months before the election, but the press kept saying "bad economy!" to help Clinton.

Let's face it: we are all swimming in the water of media. Unless we are experts in a field, we have no other bearing point from which to judge things except what our eyes and ears see - BUT WE ARE LOOKING AT A PRODUCED AND MADE-UP PICTURE - NOT REALITY!

It is the age in which we live - we are all looking at Iraq, but none of us are looking at Iraq. We are all so informed, but none of us see all the real information. We are so easily herded and skewed

gophermomeh said...

If a tree falls on my head...no wait, that's not right... (but it did make a sound). Ouch.

I'm just tightening my belt and hoping for the best. The experts can call it whatever they want. We react to what we feel - what it's called is pretty irrelevant.

downtownlad said...

Ann - Stick to law. Because you know squat about economics.

We are now "in" Q2 of the fiscal year. How do you know we're not shrinking now? And as for Q2, there are two more revisions to come.

I have no idea if we're in a recession or not. But I do know for sure, that YOU can not definitvely declare, as you just did, that we're not in one.

But congratulations on your booming 0.6% economy that is slower than the population growth.

downtownlad said...

This reminds me of the post where Ann noted Bush's 48% approval and touted how it was a sign of his comback.

Not.

Hoosier Daddy said...

More to the point, since two consecutive quarters of declines in GDP are NOT required for a recession, it's not impossible that we are currently in a recession.

That statement does not seem to be supported by the evidence.

To wit

Such as

Or

But you get the picture

Jeremy said...

Here's why I shrug at articles like this:

Almost half the economists surveyed said a recession this year could be worse than the 2001 and 1990-91 downturns.

Doesn't it make more sense to rephrase this as "More than half the economists surveyed said a recession this year could not be worse than the 2001 and 1990-91 downturns." It's almost as if the article was written before any facts were established.

Joe said...
This comment has been removed by the author.
Joe said...

The biggest problem with the traditional newspaper and television news outlets isn't that they have a liberal bent, but that they are mainly composed of people who weren't smart enough in an analytical sense to do something else. The result is that they tend to move as a pack and rarely really question the "conventional" wisdom. This isn't a modern thing either--you can fend a plethora of examples where the press kept reporting something untrue or misleading (most interesting are where the apex of the press reporting is at this point. The recent economic news is actually a good example--there are no runaway foreclosures, skyrocketing inflation of unemployment and that would be obvious to anyone who bothered to do a smidgen of research. )

downtownlad said...

The recent economic news is actually a good example--there are no runaway foreclosures, skyrocketing inflation of unemployment and that would be obvious to anyone who bothered to do a smidgen of research. - Joe

This is what happens to people when they've been brainwashed by Fox News. They have no clue that foreclosures are at their highest in years, that we've had three straight months of declining employment rolls, and that gas is now almost $4 a gallon and inflation is at its highest level in almost a decade.

No party has retained the presidency when the economy has grown less than 2.5% in the prior year. Good thing the Republicans are running against a black man.

Ann Althouse said...

You need two quarters of decline, not growth to have a recession. Conceivably, we could now be in the first of 2 quarters of decline, so this could be the beginning of a recession. I realize that. But up through March, it hasn't been a recession. We could be starting one in April.

Hoosier Daddy said...

They have no clue that foreclosures are at their highest in years, that we've had three straight months of declining employment rolls, and that gas is now almost $4 a gallon and inflation is at its highest level in almost a decade.

Funny things were doing just dandy until the Democrats took Congress.

downtownlad said...

Ann - January = +2%
February = -0.5%
March = - -0.5%

That's a positive quarter of growth. But it would mean the economy took a downturn in Feb. I have no idea if that's the case, but with 0.6%, it is very possible.

I don't want us to be in a recession. My pay goes down big time if that happens, even though I live abroad, because my company is based out of the US.

I'd like to read more of the numbers, but it looks like inventories were up big time. If that explains the 0.6% that's not good. Because it means the economy was producing stuff that nobody wanted and is now sitting in a warehouse. And when that happens, companies cut back even more in order to pare those inventories down, which usually portends lower growth going forward.

Let's see how the unemployment numbers look on Friday. That will be a good sign if we're in a recession or not.

al said...

Funny things were doing just dandy until the Democrats took Congress.

And no sarcasm tag... That should stir things up.

downtownlad said...

So Hoosier Daddy - care to name the Democratic policy that caused the recession?

Because I can name plenty of things that Bush and the Republicans have done to cause one. Starting with a trillion dollar war, $400 billion dollar deficits. $4 gas prices (directly linked to the war), and 8 percent plus growth in government spending (which only came under control when Democrats took over Congress).

So I guess Hoosier Daddy is blaming the recession on less government spending under the Democrats.

Hoosier Daddy said...

So Hoosier Daddy - care to name the Democratic policy that caused the recession?

Just being cheeky DTL thats all. Kinda like how Clinton gets 5 stars and two snaps and a twist for laying his hands on the economy in '92 and we were all saved.

But yeah I blame Bush for a lot and don't forget to include the billions spent each year on illegal immigrants in this country doing all those jobs Americans collecting welfare won't do.

The flipside is, all I hear from the Dems is how my taxes will be going up and the trillion dollars in Iraq will just be spent on universal health care and pre-K.

Probably why the only vote I'm casting is for governer this year. At least, he's fiscally responsible.

Original Mike said...

So Hoosier Daddy - care to name the Democratic policy that caused the recession?

Here's one that certainly hasn't helped.

http://gatewaypundit.blogspot.com/2008/04/despite-energy-crisis-dems-vow-no-new.html

downtownlad said...

There's nothing wrong with taxes if they are actually used to balance the budget. Clinton kept spending way under control. A republican congress helped. Gridlock is always good.

SteveR said...

I thoughgt we were already in Q3 of the FY.

save_the_rustbelt said...

I suspect sales number in energy and food are keeping this above "0" and that doesn't exactly qualify as a growing economy.

I don't trust the GDP number much more than I trust the unemployment numbers.

chickenlittle said...

Is anyone out there putting money into the US stock market, except professional traders? If so, who are you investing in, besides Apple?

AAPL is on hold. I'm buying shares in dollar based exporters. American coal, Ag processors. Almost time to buy US automakers, but not yet.

Original Mike said...

Is anyone out there putting money into the US stock market, except professional traders?

Me. Every month for the last 23 years.

vbspurs said...

If you want feelings, turn on Dr. Phil.

Economics is more like Rachael Ray -- obnoxious and tedious.

Cheers,
Victoria

Dust Bunny Queen said...

DBQ, do you believe the WSJ printed this survey of economists "with the aim of getting 'their' party back in the White House?"

There is a big difference between economists presenting a negative view of sectors of the economy with reasoned research and advice based on academic credentials and a bunch of illiterate bozos running around screaming that the sky is falling and pointing fingers at political personages who have little control over world markets.

Half of the dopes exclaiming the world is coming to an end because of subprime mortgages failing probably don't have a clue about what a sub-prime is and how it is packaged to be included in derivative financial instruments. I have no issue with people who do know what they are talking about like the economists you referenced giving us bad news as it is based on fact and not herd mentality knee jerk emotionalism with a hidden agenda.

Dust Bunny Queen said...

Is anyone out there putting money into the US stock market, except professional traders?

Of course. The market isn't a monolithic thing. There are plenty of sectors that are producing positive returns. The smart investors are buying opportune equities while the market is low, instead of buying when it is at its highs.

Long term investors are happily dollar cost averaging while the "market" goes down for now. It is a good thing.

Original Mike said...

It is a good thing.

Yes, it is. As far as I'm concerned it can stay down for another 5 years. I doubt I'll be that lucky. On the other hand, with President Obama ...

MadisonMan said...

You mean Buy Low Sell High works? :)

Joe said...

DTL,

Foreclosures are just over 2%. Not even close to an all time high.

Unemployment is increasing at a slow rate, but is still below the unemployment rate of the mid-90s (and below what many economists traditionally thought was the normal minimum unemployment rate.)

There has been inflation, especially with Gas, but it's not runaway

The fundamentals of this economy are pretty damn good. The economy itself would be better if pessimists like you and the mass media would stop being so hysterical.

Incidentally, while the inflation rate jumped in January, it is declining. It is now about where it was in 2000, eight years ago. Regardless, it is still astonishingly low. Interest rates are incredibly low. The dollar is very weak, and strengthening it would probably be the best thing, followed by Congress dumping removing farm and ethanol subsidies, tariffs on sugar and dropping the anti-tar sands provisions of the recent energy bill.

Original Mike said...

You mean Buy Low Sell High works? :)

You can't make money doing it the other way around. ;-)

Balfegor said...

The fundamentals of this economy are pretty damn good. The economy itself would be better if pessimists like you and the mass media would stop being so hysterical.

The fundamentals are pretty good. So for in the long run, I expect the US will do fine.

But in the short term, uh, housing was massively overvalued. People were making foolish purchasing decisions, essentially on margin (with 0% down mortgages, etc.) Even some people who made comparatively sensible decisions about housing and paid down 10% or even 20% of purchase price are finding that they're in negative equity territory, because their house was just that overvalued. And millions of people had assets overconcentrated in real estate, meaning that the -- I don't know -- $600 billion? $1 trillion? $2 trillion? Meaning that the huge amount of nominal value that has just evaporated over the past months was their wealth. Those gigantic losses are going to affect their consumption patterns, their mobility (e.g. ability to relocate for different work), and so on, with effects down the line in the economy. And of course, because of the way mortgages got packaged into other instruments, there's been a huge effect on the financial sector, which in turn has affected the availability of all kinds of credit, which businesses need to operate.

In the short term, it's hard for me to look at the picture and think that we're going to be able to ride this out with a minimum of discomfort. To my lay eyes, this looks pretty bad.

Cedarford said...

Roger J. said...
As for the overall economic environment, I suspect the rapid growth of a consumer economy in India and China have had a major role in shifting the demand curve up--bringing a billion consumers on-line plays havoc until such time as supplies adjust


By "supplies adjusting" to too many people globally chasing too few resources, I presume you mean prices to scarce resources that be boosting in supply - doubling again until demand drops off.

**************
downtownlad said...
So Hoosier Daddy - care to name the Democratic policy that caused the recession?


Clinton's NAFTA, the deals he cut with China on the WTO and outsourcing America's high technology products and industrial trade in the name of "free trade and Globalization" as agreed to by wealthy liberal Jews, Democrats, and Euros at Davos and Geneva.
The housing bubble Clinton helped trigger, as the high tech bubble collapsed, Clinton people paved the way for the big money to leave the marlet and go into the "security" of energy-guzzling "McMansions".
Helping set up the "Owner Arrangement" where the costs of outsourcing and unchecked illegal immigration are socialized, but where most profits from those destructive activities privitized to the small percentage of Americans in the Ruling Elites and the international financiers of many citizenships and loyalties.

That the Republican Corporatists that Bush bootlicks to followed the path the Clintonistas blazed does not get the Democrats off the hook. Both Parties fucked the working and middle class. The only debate is about Democrats wishing to fuck the parasite class less and the rich more, while the Republican Corporatists believe vice versa.

Lets also add that Democrats have paralyzed getting new energy exploration, new nuke and coal plants, new refineries - while waving in tens of millions of new energy consumers across our borders for over 30 years.

***************

Balfegor said...

Foreclosures are just over 2%. Not even close to an all time high.

Is that a straight foreclosure rate, or a nonperforming mortgage rate? Because my sense is that banks have not been foreclosing in all cases where people have failed to pay their mortgages. See, e.g. this article from today, reporting that deliquent mortgages are up over 30% in Florida, California, and Arizona. Yes, these are moving in single-digit percentages (all, I think, under 5% deliquency), but these are nevertheless pretty significant shifts. If you priced for a 3% delinquency rate and you get 4%, that's a big difference, taken across thousands of homes.

In addition, from the individual perspective, home values (not in all markets, but in many of the richest markets) have been dropping through 2007 and 2008, with double-digit losses. I think we're seeing greater than 20% losses in many places, in fact. If you factor that in across the huge amount of wealth Americans had poured into housing, that's a gigantic cut in personal wealth figures. Hard to see that as trivial.

freelunch said...

Given the recent criticisms of the GNP deflator, there's reason to argue that the government is getting a two-fer by lying only once about how high inflation is.

knoxwhirled said...

Economics is more like Rachael Ray -- obnoxious and tedious.

That woman's mouth never shuts up.

Dust Bunny Queen said...

from the individual perspective, home values (not in all markets, but in many of the richest markets) have been dropping through 2007 and 2008, with double-digit losses.

There's that darned old buy low and sell high thingy again.

Seriously, who didn't suspect that house prices might be just a bit inflated when that little 3 bedroom house that was $120,000 a few years ago was suddenly selling for $750,000? Only the greedy house flippers (for whom I have ZERO sympathy) or the truly stupid or uneducated (for whom I have a great deal of sympathy) got caught up in the frenzy. The unscrupulous mortgage brokers should really be waterboarded for purposely putting people into loans that they new they wouldn't/couldn't/shouldn't be able to get any other way.

Unfortunately, the mortgage issue and everything else like high gas etc is all a part of the supply demand economic cycle. As painful as it is for some people we really need to refrain from trying to "fix" things. All it does is prolong the pain and make it much much worse.

Just remember these words. I'm from the government and I'm here to help........run screaming!!!

MadisonMan said...

Just remember these words. I'm from the government and I'm here to help........run screaming!!!

Unless you're JPMorgan swallowing Bear Stearns. In that case, hold out your palm for some more lucre.

SteveR said...

If you bought a house for $175K in 2001, refinaced in 2007 and lumped in some debt and associated goodies for the "apparised" value of $275K, and now you have to sell for the horribly depressed value of $225K, you didn't "lose" 50K, you screwed yourself.

And if you bought in 2006, hoping to flip in 2007 without payments kicking in, you might as well have gone to Vegas, except no one would tie you into a sorry story about the economy.

If we are going to talk about how bad things really are, let's talk about how things really are.

Fen said...

I find it interesting that the same people who shout "No Blood for Oil" can turn around and lament the loss of a cheap oil economy without skipping a beat.

Clinton kept spending way under control.

With the help of the Peace Dividend. Its like deferring investments in your kid's College savings account for eight years so you can party, kicking the tough financial decisions down the road, then later complaining that your kid's tuition expenses are busting your budget.

Balfegor said...

And if you bought in 2006, hoping to flip in 2007 without payments kicking in, you might as well have gone to Vegas, except no one would tie you into a sorry story about the economy.

Yes . . . are you trying to suggest that if a couple million Americans each burned through $50,000 gambling, we . . . wouldn't have a problem? I mean, even in that case, at least the money is still floating around. This is like people accidentally burning $50,000. Doesn't matter if it was because they were foolish or stupid. Yes, sure, they were. It's still a problem for the rest of us. If you run a shop and your customers all discover, to their surprise, they're $50,000 poorer, don't you think that might be problematic?

X said...

Balfegor, that 2 trillion dollars didn't evaporate. The previous owners of the homes got it. Very basic.

Cyrus Pinkerton said...

Hoosier Daddy wrote:

That statement does not seem to be supported by the evidence.

The evidence suggests you didn't read and understand the section of the WSJ article I posted. Here is the relevant bit, again:

Although the classic definition of recession is two consecutive quarters of declines in the gross domestic product, Stephen Stanley of RBS Greenwich Capital pointed out that the National Bureau of Economic Research, the nonpartisan organization that is the official arbiter of recessions, doesn't always strictly follow that definition. "If you go back to the 2001 recession, there was only one negative GDP quarter, and there might not even be one negative quarter in this recession," he said.

Althouse then wrote:

You need two quarters of decline, not growth to have a recession.

Incorrect. See above.

Original Mike said...

Incorrect. See above.

It's amazing you think that paragraph proves something.

Cyrus Pinkerton said...

"original" mike wrote:

It's amazing you think that paragraph proves something.

What is amazing is how few people here read with comprehension. I suspect you are one of them, otherwise you wouldn't have written such a mindless comment.

Please follow up with a substantive comment if have anything to offer.

Original Mike said...

You’re slipping Cyrus. Usually you hide your unpersuasive “proof” in a thick tome, requiring your sucker to waste hours to find and decipher it.

Cyrus Pinkerton said...

"original" mike,

In other words, you have nothing substantive to offer. Just as I suspected.

You know, if you care to prove that a recession requires two consecutive quarters of decline in GDP, you should do so. However, since you can't do that, you'll undoubtedly continue your filibuster.

Thanks for your usual empty contribution.

Cyrus Pinkerton said...

"original" mike,

Since you seem so utterly clueless, let me help you out.

This is from the NBER's website FAQ regarding the NBER's recession dating procedure:

Q: The financial press often states the definition of a recession as two consecutive quarters of decline in real GDP. How does that relate to the NBER's recession dating procedure?

A: Most of the recessions identified by our procedures do consist of two or more quarters of declining real GDP, but not all of them. According to current data for 2001, the present recession falls into the general pattern, with three consecutive quarters of decline. Our procedure differs from the two-quarter rule in a number of ways. First, we consider the depth as well as the duration of the decline in economic activity. Recall that our definition includes the phrase, "a significant decline in economic activity." Second, we use a broader array of indicators than just real GDP. One reason for this is that the GDP data are subject to considerable revision. Third, we use monthly indicators to arrive at a monthly chronology.


There you have it, "Original" Mike. Try to learn something from this experience.

(By the way, if you're "unpersuaded" by the NBER FAQ, contact them, not me.)

Fen said...

Cyrus: What is amazing is how few people here read with comprehension

Yah right. Just yesterday you insisted that referencing the Holocaust invoked Godwin's Law.

Original Mike said...

Who died and made the NBER God?

The definition of a recession is arbitrary. What's the difference between 0.01 and -0.01 growth? Which, I assume, is the NBER's point and I would agree with that. But arbitrary definitions are useful because they provide a common language to facilitate discussions. You abandon the definition and what'd ya got? A bunch of academics beatin' off.

Yawn.

Revenant said...

A recession is defined, in macroeconomics, as two consecutive quarters of negative economic growth. This is the definition which reporters cite when they say that a recession is two quarters of negative growth.

The NBER uses its own definition, which differs from the standard economic definition. So it is possible to be in what NBER calls a recession, without actually being in what economists would call a recession.

So Ann is not, as Cyrus snottily assumed, "incorrect" to say that you need two consecutive quarters of negative growth to have a recession. She is simply using the economic definition rather than NBER's proprietary one.

Hoosier Daddy said...

Cyrus saidThe evidence suggests you didn't read and understand the section of the WSJ article I posted. Here is the relevant bit, again:

Ah I see. So you take as Gospel the definition based upon what the NBE says rather than the financial industry as a whole.

"If you go back to the 2001 recession, there was only one negative GDP quarter, and there might not even be one negative quarter in this recession," he said.

Not even one? Gee so we can have a recession that occurs in 2 3/4 of the fiscal year? So we went from the 'classical definition' to new and improved version which means having bad couple months now defines a recession. That's looking long term.

Talk about your moving goalposts. No wonder you hitched your wagon to that tripe.

Roger J. said...

So what do we have here: competing definitions of a recession. The NBER is a private organization and they have developed what amounts to a proprietary definition of recession; then there is the more generic definition of two quarters of negative GDP--which is "correct?"

The answer, of course, is neither--it simply depends upon which definition you chose to accept.

I propose a mathematical definition as follows: whenever the first derivative of the GDP growth curve function turns negative we have a recession. That definition has the advantage of some degree of mathematical precison--but it is as arbitrary as the two quarters or NBER definition.

As can be seen from the foregoing comment thread, a recession depends upon whose definition you chose. Only that, and nothing more. In short, it's a rather foolish discussion absent agreement on terms.

Hoosier Daddy said...

In short, it's a rather foolish discussion absent agreement on terms.

Well the generally accepted definition as least as far back as when I took economics in college was the classical definition of at least 2 consecutive quarters of zero or negative growth. Anyone taking econ want to tell us what the textbook definition is?

Original Mike said...

In short, it's a rather foolish discussion absent agreement on terms.

What disagreement? A recession is two quarters of negative growth. Right Rev? Right Hoosier? Right Althouse?

No disagreement here.

Roger J. said...

Folks: please don't get exercised at me. I was arguing there are competing definitions of recession. Thats all. If you go the two quarters definition, then we are not; if you choose to use the NBER's definition a la Cyrus, then we may be.

And yes--amazingly enough--economists do not agree.

Original Mike said...

No problem, Roger. We're just not swayed by the compelling "evidence" offered by Cyrus.

Roger J. said...

Mike: probably a wise choice since Cyrus' PhD is in physics and not economics. That is right, isn't it Cyrus?

George said...

2 fun news stories:

"Hospitals are adopting a policy to improve their finances: making medical care contingent on upfront payments." As in paying $105,000 up front before getting treatment. Pay or die.

And a big rise in people selling heirlooms to get gas money. "Baughman, who runs eBizAuctions, said that over the past four months she's been working with mostly desperate sellers instead of mainly casual ones. Most are middle-class customers who can't pay their bills and now want to be paid up front for the items instead of waiting until they are sold, she said."

Hope we don't have that recession.

John Stodder said...

Forgive me for sounding like a philistine, but this NBER "definition" of a recession Cyrus posted sounds like something where whoever is in charge of it can come up with a "recession" verdict, or not, by cherry-picking from a wide array of numbers they can "consider." I didn't get the impression that it's a formula, just different indices to be "considered."

Its also seems like NBER's method doesn't solve the problem of late-arriving date, it compounds it.

Maybe the concept of recession is old-hat. But it is a word with a definition, and that definition has been used for decades. Thus, it allows meaningful comparisons with previous periods.

It is economically illiterate to throw higher gas prices into the mix as proof of a recession. It's proof only of higher gas prices. Perhaps they will cause a recession. Or perhaps it is the result of economic growth. Without context, you don't know.

Likewise the mortgage crisis. This is a corporate scandal. You had a lot of bad actors and incompetence in the financial world. It's not caused by a recession. It might cause one, but apparently it hasn't yet.

Cyrus Pinkerton said...

Fen wrote:

Just yesterday you insisted that referencing the Holocaust invoked Godwin's Law.

Actually that's not even close to what I wrote. Did you fail to understand my point or do you see some advantage in lying about it now?

Hoosier Daddy said...

Folks: please don't get exercised at me. I was arguing there are competing definitions of recession.

No one is getting exercised Roger. There has been a standard definition of what constitutes a recession for eons. Econ courses still subscribe to the two quarter negative growth standard as do nearly all economists.

Mr. Pinkerton likes pose a dissenting view of anything a conservative says so he hitched his wagon to organization which has seemingly defined a recession as pretty much anything we want it to be. I was simply pointing out that the classic and generally accepted definition does not meet his personal view.

Cyrus Pinkerton said...

It's really a shame that some people don't bother to read before commenting. Let me summarize the essential points for the nonreaders in the group:

- Althouse is blogging about the US economy. The conversation is NOT about the economy in the Republic of Bulgaria, nor is it about a hypothetical national economy described in one of Hoosier's old college economics textbooks.

- Althouse first links to an AP news item before quoting the first two paragraphs. For those who bothered to read the linked article, they would have seen this:

A growing number of economists believe the economy is in a recession and is indeed contracting now. Under one rough rule, if the economy contracts for six straight months it is considered to be in a recession. That didn't happen in the last recession - in 2001- though. A panel of experts at the National Bureau of Economic Research that determines when U.S. recessions begin and end uses a broader definition, taking into account income, employment and other barometers.

- Althouse then follows with a comment that says "You need two quarters of decline, not growth to have a recession."

- I identify Althouse's comment as "incorrect."

Conclusion:

According to the very article that Althouse cites, she is incorrect. According to the Wall Street Journal article I cited, Althouse is incorrect. According to the NBER, "the official arbiter of recessions," the group "that determines when U.S. recessions begin and end," Althouse is incorrect. If you accept that there was a recession in 2001, Althouse is incorrect.

All of which brings us to another one of those reality check moments that cause problems for a few Althouse readers. For those commenters who insist that "two quarters of decline" are REQUIRED for a recession, why not produce a short list of respected economists who believe that there was no recession in 2001 because the "classic definition" of recession was not satisfied?

Balfegor said...

Balfegor, that 2 trillion dollars didn't evaporate. The previous owners of the homes got it. Very basic.

If person A has commodity A' and person B has commodity B', and they think A' and B' are of roughly equivalent value, how much wealth do we have here? That's right, A' + B'. Now we discover B' is actually worth B'/2. How much wealth do we have? A' + B'/2. Yes. That is a reduction. Very basic.

Cyrus Pinkerton said...

Hoosier wrote:

Ah I see. So you take as Gospel the definition based upon what the NBE says rather than the financial industry as a whole.

The view of the NBER is widely considered authoritative in dating recessions. As far as I know, there is no organization that represents the viewpoint of the "financial industry as a whole" regarding the determination and dating of recessions. You imply that the "financial industry has a whole" has a different viewpoint. Please identify what this viewpoint is and your source. (Personally, I think you're bullshitting here, but I'll give you the benefit of doubt and encourage you to produce some evidence.)

Talk about your moving goalposts. No wonder you hitched your wagon to that tripe.

This is nonsense, of course. I'm sure that there are economists who quibble with the findings of the NBER. However, I suspect that there are very few who insist that recessions be determined by the definition you prefer. The fact that the NBER is referred to as "the official arbiter of recessions" and the group "that determines when U.S. recessions begin and end" pretty clearly indicates that the NBER standard isn't "tripe."

Cyrus Pinkerton said...

Hoosier Daddy wrote:

Well the generally accepted definition as least as far back as when I took economics in college was the classical definition of at least 2 consecutive quarters of zero or negative growth.

Well things have changed in the past 50 years or so. Econometrics continues to develop and ideas change. I'm not sure that you should consider a textbook written in the 1950s for an introductory macroeconomics course to be the definitive source for understanding how recessions are defined today.

Cyrus Pinkerton said...

Roger wrote:

Mike: probably a wise choice since Cyrus' PhD is in physics and not economics. That is right, isn't it Cyrus?

If you're really curious, Roger, you'll find that my CV is a matter of public record on the internets. However, if you're going to rely on credentialism, I'm afraid you'll discover that I'm far more qualified to discuss this subject than you or "Original" Mike.

Cyrus Pinkerton said...

Revenant wrote:

So Ann is not, as Cyrus snottily assumed, "incorrect" to say that you need two consecutive quarters of negative growth to have a recession. She is simply using the economic definition rather than NBER's proprietary one.

You are incorrect again, Revenant. There is no "economic definition" as you imply. The NBER's dating of recessions is widely accepted. If you want to make the case that there was no recession in 2001, please do. If you want to make the case that there is a group of respected economists who insist that recessions be determined by the "two quarter rule," supply a short list of names.

Althouse is indeed incorrect according to the article she cites, according to the WSJ article I cited, according to the NBER, and according to the wide acknowledgment that the US economy was in recession in 2001. I don't mind at all if you choose to disagree, but please bring facts to bear on the argument rather than misinformation and whining.

Roger J. said...

Cyrus: "If you're really curious, Roger, you'll find that my CV is a matter of public record on the internets. However, if you're going to rely on credentialism, I'm afraid you'll discover that I'm far more qualified to discuss this subject than you or "Original" Mike."

So you say Cyrus, but until you provide a link, I will assume you are a poseur and not the african american PhD in physics you claim to be. Now you may not be a phony--and if that is the case, I will offer a public apology. As for my credentials, my public profile is available and by all means feel free to google my name.
Since you do appear to be one who needs to get the last word in in any thread, I assume you will read this.

Cyrus Pinkerton said...

Hoosier Daddy wrote:

Econ courses still subscribe to the two quarter negative growth standard as do nearly all economists.

This is pure bullshit. You have no way of know what "nearly all economists" believe regarding the definition of recessions.

Mr. Pinkerton likes pose a dissenting view of anything a conservative says so he hitched his wagon to organization which has seemingly defined a recession as pretty much anything we want it to be. I was simply pointing out that the classic and generally accepted definition does not meet his personal view.

Hoosier, you really are full of shit this week. First, I don't consider many of the Althouse rightwingers to be "conservatives." As far as I'm concerned, they lost the right to call themselves conservatives when they consistently supported widely irresponsible fiscal policies for the past 25+ years. (Sorry, but support for fiscal policies that produce massive budget deficits is in no way "conservative." Please refer to "classic definitions" of fiscal conservatism if you are in doubt.)

Second, I consistently disagree with people who say things that don't square with the facts. When I comment here, at a blog that features mostly rightwing commenters, it's likely that the majority of my disagreements will be with rightwingers.

Thirdly, it isn't just me who has "hitched my wagon" to the NBER's definition of recessions. To imply so is dishonest. The NBER's dating of recessions is widely accepted as authorative. I'm sorry that you don't like this fact, but it is still a fact.

Fourthly, the way the NBER defines a recession isn't, as you suggest, "pretty much anything we want it to be." Your ignorance of their methods doesn't mean that their methodology is arbitrary.

Finally, with regard to the US economy, the NBER's dating of recessions is widely accepted. It is not my "personal view" that you are challenging, but the methodology of the NBER. If you don't like it, fine, produce some evidence of different viewpoints that have been expressed by reputable economists. Specifically, provide references to economists who believe that there was no recession in 2001, based on the "classic definition" that you insist is in general use. It will be interesting to see what you turn up.

Fen said...

Fen: Just yesterday you insisted that referencing the Holocaust invoked Godwin's Law.

Cyrus: Actually that's not even close to what I wrote. Did you fail to understand my point or do you see some advantage in lying about it now?

Here it is again, you silly sophist:

Cyrus: You managed to mention World War II and the Holocaust in a comment thread about Jimmy Carter. So, to be accurate, you made a comparison (in this case, to Chamberlain) that specifically relied on mention of Nazis. Godwin's Law strikes again!

Fen: "Here's the quote again: Thats great, but a leadership role requires more. Consider that Chamberlain was likewise "principled", but his actions neutered the 4th largest army on the continent and doomed 44 million, including 11 million Holocaust victims. Point out where I "made a comparison...that specifically relied on mention of Nazis"...

Cyrus: You took the opportunity in your response to draw a bizarre comparison involving WWII, the Holocaust and the Nazis. Godwin's Law applies.

Fen: Point out where I "made a comparison...that specifically relied on mention of Nazis"...

Cyrus: But for the record, you made a bizarre comparison involving Carter, Chamberlain and Nazi Germany. (Yes, Fen, you mentioned the Holocaust.) Not only was the comparison ridiculous, it satisfied the conditions of Godwin's Law.

[...]

So, yesterday you insisted that referencing the Holocaust invoked Godwin's Law. Today you claim "that's not even close to what I wrote".

Cyrus: and Nazi Germany. (Yes, Fen, you mentioned the Holocaust.)

Any fair reading of the thread will show that I never mentioned the Nazi or Nazi Germany, and that you think [see your words, directly above] mentioning the Holocaust is invoking Godwin's Law.

This is a trivial issue, but its important for others here debating you to see just how dishonest you are. Maybe I can save them the time I lost.

Cyrus Pinkerton said...

Roger wrote:

...but until you provide a link, I will assume you are a poseur...

Assume whatever you like. However, you if you simply apply to this problem the same superb investigative powers that led you to conclude that I'm Amanda Marcotte and Maxine Weiss, you'll be reading my CV in no time.

As for my credentials...

Frankly, my dear, I don't give a damn about your credentials. My opinion of you is based on what you write.

Since you do appear to be one who needs to get the last word in in any thread...

Yeah, this seems to be one of the new favorite digs at me. Honestly, Roger, if someone posts to me, I generally try to respond. Similar bad habits I have include staying after any class I teach or seminar I give until all questions are answered, and responding to all of my email. You can spin that any way you like. If you want to interpret it as a "need to have the last word," that's fine, I can live with your analysis. And since you are fair and reasonable, I'm sure that you have similarly harsh judgments for those who consistently run away from these threads when challenged to produce evidence to support their claims.

Cyrus Pinkerton said...

Fen,

Obviously your reading comprehension needs some work. I've never "insisted that referencing the Holocaust invoked Godwin's Law." For example, in discussions of WWII, Hitler, etc..., referencing the Holocaust may be entirely relevant. However, in a discussion of Jimmy Carter and his presidential policies, drawing a bizarre comparison that involves a reference to WWII and the Holocaust is highly unlikely to be pertinent and, in my opinion at least, puts you at risk of Godwin's Law being invoked. In other words, it was YOUR comparison that I judged to meet the conditions of Godwin's Law, not just any reference of the Holocaust as you now imply. You cannot legitimately accuse me of dishonesty when you can't even manage to represent my statements accurately.

If you want to quibble about the application of Godwin's Law, fine. You can claim that your comparison did not strictly involve Hitler or Nazi Germany, but instead involved the policies and actions of Nazi Germany (i.e., WWII and the Holocaust). If that's the loophole you want to use, go for it. I won't continue to argue the point with you if you choose to use that escape.

In any case, when we were discussing this in a previous thread, I challenged you to explain the Carter policies that lead you to categorize him as an "appeasement weasel." It was at that point that you disappeared from the exchange. Since you have renewed your interest in the topic by bringing it to this thread, perhaps you can share your views with me now.

Original Mike said...

Fen said: Here it is again, you silly sophist:

Thanks for the link, Fen.

Not that I had any doubts.

Roger J. said...
This comment has been removed by the author.
Roger J. said...

Cyrus: interesting that you don't think much of "credentialism." I would think that given your PhD in physics, the whole question of credentials is important. Surely you evaluated the credentials of those scholars that you used to establish your hypotheses in your dissertation. It's simply the first screen to be applied when looking at the literature in one's chosen field. As an example, I reject Mr. Goldberg's tome on liberal fascism simply because he is not a scholar in political philosophies and lacks the credentials necessary to evaluate the evidence.

Since I don't plan to go to the effort that the good Inspecktor does to research IP adresses, I assumed that if I googled your name I would find your CV. Alas, not so. In fact, the only record of a cyrus pinkerton on google are blog entries. Conclusion? You don't use your real name on blog entries, or, if you do, a CV, or any professional references, are not in evidence via google.

Since you are keen on backing up assertions with evidence, then I continue to await any evidence you can provide. Feel free to use my email address if you don't want to put a link on a blog. If my assessment of you as a poseur is wrong and disproved by the evidence, a public apology will be forthcoming.

X said...

OK Balfegor, I see. Your economic analysis is political. Only negatives count.

I bought my home in 2000 for $70k. I could have sold it last year for $250K (my neighbor sold hers for that). This year I can sell for $225K. I guess $25k "evaporated", but only after $180k "materialized".

Original Mike said...

Roger: This is his M.O. He sends you on wild goose chases. I blew a weekend once looking for nonexistent references, assuming he was arguing in good faith. My advice, don't play.

Fen said...

Cyrus_Today: Obviously your reading comprehension needs some work. I've never "insisted that referencing the Holocaust invoked Godwin's Law."

Cyrus_Yesterday: you made a bizarre comparison involving Carter, Chamberlain and Nazi Germany. (Yes, Fen, you mentioned the Holocaust.) Not only was the comparison ridiculous, it satisfied the conditions of Godwin's Law.


And I'm still waiting for you to point out where I "made a comparison...that specifically relied on mention of Nazis".

OriginalMike: This is his M.O. He sends you on wild goose chases.

More often, he hijacks threads that discomfort him. For example, someone will imply Obama is a Marxist, Cyrus will respond with a short ad hom attack to engage them, and the two will spend the next 30 posts arguing over the defintion of "imply".

Fen said...

Cyrus: If you want to quibble about the application of Godwin's Law, fine. You can claim that your comparison did not strictly involve Hitler or Nazi Germany, but instead involved the policies and actions of Nazi Germany (i.e., WWII and the Holocaust).

By that logic, referencing the origins of Maneuver Warfare and Combined Arms is an invocation of Godwin's Law.

You can claim that your comparison did not strictly involve Hitler or Nazi Germany

So you're now admitting I never made a comparison that specifically relied on mention of Nazis. Gee thanks.

Cyrus Pinkerton said...

"Original" Mike wrote:

Who died and made the NBER God?

So you're ignorant of the history of the NBER too? That explains a lot.

Economists at the NBER in the 1920s, 1930s and 1940s (Wesley Mitchell, Simon Kuznets, Arthur Burns, etc...) were responsible for developing the concepts and tools for the measurement of business cycles and for the identification of economic expansions and recessions. See for example Mitchell's "Business Cycles: The Problem and its Setting" and "Measuring Business Cycles" (written with Burns), G.H. Moore's article "What is a recession?" in the American Statesman (October, 1967), S. Fabrican's "Toward a Firmer Basis of Economic Policy: The Founding of the National Bureau of Economic Research," and R.W. Fogel's "Simon S. Kuznets: April 30, 1901 - July 9, 1985." (The memoir by Milton and Rose Friedman "Two Lucky People" also touches on the history of the NBER.)

Given the critical role the NBER has played in the formulation and development of these concepts and metrics, it is not surprising that the NBER's business cycle dating committee is "generally considered authoritative in dating recessions."

By the way, on a slightly different topic, it's fairly meaningless to discuss the definition of "recession" without referencing the economy under consideration. For example, economists at the IMF have proposed that "a global recession would take a slowdown in global growth to three percent or less." Clearly they haven't cleared their proposal with Hoosier yet.

Cyrus Pinkerton said...

"Original" Mike wrote:

Not that I had any doubts.

At least this is honest. Unfortunately, a person without doubts is also likely a person who isn't a critical thinker.

Original Mike said...

I know Fen and I know you. Thus, no doubts.

However, you could of surprised me, so I checked just to make sure.

Balfegor said...

Re: X:

My point is that at our first point in time, two people have exchanged value. One person buys the house for X amount of money. One person sells the house for X amount of money. Assuming neither of them is committing fraud, both of them expect that they have got something you could value as X. You follow?

When the house buyer discovers that his house is worth less than X -- the kind of situation in which he's taken out a mortgage with a minimal downpayment and finds himself with negative equity -- the house seller does not find that his X dollars is now worth more. The house seller still only has X dollars. The house buyer, meanwhile, has got less.

It's not that only the negatives count, it's that no one is gaining in the immediate situation. Well, except short sellers, I guess. But on a basic level, neither people who have already bought or people who have already sold are gaining.

I bought my home in 2000 for $70k. I could have sold it last year for $250K (my neighbor sold hers for that). This year I can sell for $225K. I guess $25k "evaporated", but only after $180k "materialized".

Uh, yes. Exactly. Your home appreciated in value. Um. I don't see the point you're trying to make. You don't have a problem here.

But consider your new neighbour. He paid $250,000 last year for a house that has now lost 10% of its value. Your old neighbour has $250,000 in her pocket. She's no better or worse off than she was before that house dropped 10%. But your new neighbour? Not necessarily so good. Suppose he had a mortgage where he paid ~0% down with a 30 year mortgage of some sort, as some people apparently did. The first few years of payments are mostly interest and barely eat into the principal at all, so he would probably be stuck with negative equity. Wouldn't that be problematic?

The problem for us is that there's an awful lot of people who are not in your happy situation. Some people bought or refinanced houses with ARMs and are no longer able to pay their mortgages. Some people bought houses in 2006 or 2007, and have seen those houses plummet in value to the point that it no longer makes economic sense for them to pay off their mortgages. Some people -- like my hypothetical neighbour for you -- bought houses with 0% down, and find now that their mortgage debt exceeds the reduced market value of their house. I've even heard that there were cases where people had ARMs where their initial rates didn't even cover the interest, so they're not only out of the money on their houses, they owe the banks more than the purchase price!

These are all problems that are going to exert a drag on the economy at every level, to the extent they aren't already doing so, given that we apparently saw slight contraction in February and March. The only potential counterbalancing gain in the immediate situation is that housing should become more affordable for future home-buyers. Since I'm one of them (looking for a condo at the moment), I'm actually not in a bad position. But people like me are not, comparatively, all that numerous -- the real estate market has slowed considerably. Meanwhile, those negatives are pretty awful. As they say:

"Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

A lot of people may be finding themselves unexpectedly on the wrong side of Micawber's little saying thanks to the downturn. In the past, if you ran into a problem, you could just sell the house and turn some profit, as you could do today. But people who bought in 2006-2007 are in an awful lot of cases not so fortunate.

Cyrus Pinkerton said...

Roger wrote:

Surely you evaluated the credentials of those scholars that you used to establish your hypotheses in your dissertation.

No, not really. The best analogy I can offer is the peer review process in which the value and quality of research is judged on the basis of the work presented, without regard for the credentials of the researcher.

If you prefer, think of it in terms of officiating. Does the home plate umpire need to know if the pitcher has won a Cy Young award or if the batter has won a Silver Bat award in order to define his strike zone? Should an NBA ref need to know the identity of the players involved in contact on a drive to the basket in order to decide if a foul has been committed and by whom?

As an example, I reject Mr. Goldberg's tome on liberal fascism simply because he is not a scholar in political philosophies and lacks the credentials necessary to evaluate the evidence.

As an example, I don't bother to read new books by Goldberg because everything I've read by him in the past suggests that he is a boob.

Since I don't plan to go to the effort that the good Inspecktor does to research IP adresses...

Speaking of which, the good Inspektor is also a boob.

. Conclusion? You don't use your real name on blog entries...

Ah, but I do. Not here, however, and not on a few other blogs. As I wrote previously, my decision to share personal information depends on a judgment of the character of individuals in the community. Unfortunately, one bad apple spoils the barrel. (Please note that "bad apple" does not refer to you or any of the other commenters I'm annoying in this thread.)

Since you are keen on backing up assertions with evidence, then I continue to await any evidence you can provide.

I don't believe that any of the assertions I make in my blog comments rely in any way on claims of expertise. Since I don't offer credentials in support of my claims, I see no reason to provide evidence of credentials other than as a personal favor.

Since you are keen on backing up assertions with evidence, then I continue to await any evidence you can provide.

Thanks, I'll consider that option when or if the sniping and Cymandamania dies down. Or perhaps the wishes of some of the Althouse rightwingers will come true and it won't be an issue anymore.

Cyrus Pinkerton said...

"Original" Mike wrote:

I blew a weekend once looking for nonexistent references, assuming he was arguing in good faith.

Mike, I'm sorry that your research skills are so poor. However, the fact that YOU couldn't find references doesn't mean they are nonexistent. Do you understand the difference?

For example, if you can't find your car keys, do you conclude that they no longer exist? Or is that a distinction without a difference as far as you're concerned?

Cyrus Pinkerton said...

Fen wrote:

And I'm still waiting for you to point out where I "made a comparison...that specifically relied on mention of Nazis".

How about this, Fen? For the sake of accuracy, I'll revise my statement thusly:

You made a bizarre comparison involving Carter, Chamberlain and the policies and actions of Nazi Germany. (Yes, Fen, you mentioned the Holocaust.) Not only was the comparison ridiculous, it satisfied the conditions of Godwin's Law.

If that restatement satisfies you, we can all be happy.

Original Mike said...

It took forever to get you to specify the document you were talking about. When you finally did, guess what? It didn't say what you claimed it said.

Cyrus Pinkerton said...

Fen wrote:

For example, someone will imply Obama is a Marxist, Cyrus will respond with a short ad hom attack to engage them, and the two will spend the next 30 posts arguing over the defintion of "imply".

Wow, Fen, so much for your claim of being honest. That is a remarkably dishonest summary of the exchange.

To begin with, Skyler didn't "imply" that Obama is a Marxist. He stated it quite plainly:

And [Obama] can't erase the fact that he's a marxist...

That's your first lie, Fen. Strike 1.

Secondly, after I acknowledged the ignorance of Skyler's comment, there were two (not 30) follow up comments. That's your second lie, Fen. Strike 2.

One of the follow up comments was by Simon and one was by me. There was really no argument in these follow up comments, as Simon wrote:

Obama isn't a Marxist...

and I responded with

Indeed. Thank you for injecting an ounce of common sense into this discussion.

That was the end of it. In any case, Skyler didn't reply, and there was no debate about the definition of "imply." That's your third lie, Fen. Strike 3. Yer out!

Your claim to be an honest reporter consistently takes a beating Fen. It's too bad you continue to inflict these wounds on yourself.

Cyrus Pinkerton said...

"Original" Mike wrote:

It took forever to get you to specify the document you were talking about. When you finally did, guess what? It didn't say what you claimed it said.

I see. According to your version of events, the nonexistent document didn't say what I claimed it said. Yeah, that makes a lot of sense, Mike.

Do you often have so much trouble keeping your story straight?

Cyrus Pinkerton said...

Fen wrote:

By that logic, referencing the origins of Maneuver Warfare and Combined Arms is an invocation of Godwin's Law.

Come on, Fen, apply some common sense and use your reading skills. As I noted previously, there are subjects for which a reference to Nazi German is perfectly reasonable. (This is the same thing I said in my 9:35AM post.)

However, in a discussion of Carter and his presidential policies, a comparison involving reference to WWII, and the actions and policies of Nazi Germany (e.g., the Holocaust) is bizarre and certainly puts you at risk of having Godwin's Law invoked. Had your comparison been even remotely sensible, I wouldn't have commented. As it wasn't remotely sensible, I called you on it. If you think this is unfair, I'm sorry. In my opinion, the conditions were met for invoking Godwin's Law. You clearly disagree. If you want to explain your position, please do so. Otherwise please find something else to whine about.

By the way, since you consistently refuse to defend your comparison, and refuse to explain the basis on which you deem Carter to be an "appeasement weasel," I'm left to assume you can't defend your position.

So you're now admitting I never made a comparison that specifically relied on mention of Nazis.

I'm stating quite clearly that you made a comparison that relied on mention of actions and policies of Nazi Germany. If you think that lets you off the hook, good for you. I don't think it does. That means we'll continue to disagree on that smallest of points that you are using as the basis for your filibuster.

Cyrus Pinkerton said...

"Original" Mike wrote:

I blew a weekend once looking for nonexistent references, assuming he was arguing in good faith.

You know, Mike, I checked back to see which references I provided that you decided were "nonexistent" after spending an entire weekend on research. The references you determined are "nonexistent" are several IPCC reports. Considering that people all around the world have read these reports, I'm astounded that every single copy was destroyed prior to your weekend of research.

Oh, by the way, did you know that IPCC reports are available on the IPCC website? Who would have thought of looking there for IPCC reports anyway?

Fen said...

Cyrus: That is a remarkably dishonest summary of the exchange.

Its not a summary of ANY exchange. Its an amalgamation of ALL your exchanges.

If I were to use Skyler's debate with you as an example, I would have said "when Skyler & Cyrus argued", and quoted specific examples.

And God, I really hope you're not Amanda Marcotte. I expect much more from someone of her intelligence. Tip: if you're Amanda, best keep it under your hat.

Fen said...

Cyrus: By the way, since you consistently refuse to defend your comparison, and refuse to explain the basis on which you deem Carter to be an "appeasement weasel," I'm left to assume you can't defend your position.

Believe what you want. I'm not going to wear myself out smacking lines drives at you when you can't even field a ground ball.

Cyrus Pinkerton said...

Fen babbled:

Its not a summary of ANY exchange. Its an amalgamation of ALL your exchanges.

You're lying, unfortunately. If you wanted to accurately characterize the exchanges I have here, you would at least have to include your contribution, which is to repeatedly misrepresent my position, hijack the thread with irrelevant posts, and filibuster any attempt to get you to defend your wrongheaded claims (which frequently involve science or reality denial). Moreover, without putting these exchanges into the context of the incredibly stupid observations and responses of a handful of Althouse commenters, you completely mischaracterize my role in them.

If I were to use Skyler's debate with you as an example, I would have said "when Skyler & Cyrus argued", and quoted specific examples.

Sadly this is another example of dishonesty. The truth is that your "amalgamation" relied on my exchange with Skyker from this week and used as an example the exact topic of our conversation. This creates a problem for you--when your example is compared to reality, it turns out to look nothing like reality.

More to the point, when someone posts something moronic like Skyler did (e.g., Obama is a Marxist) and I correct it, I shouldn't have to correct it multiple times because half a dozen rightwing dittoheads need to repeat it with variations. It's idiocy, pure and simple.

And God, I really hope you're not Amanda Marcotte. I expect much more from someone of her intelligence.

Fen, if you have to "hope" I'm not Amanda Marcotte, you're a helluva lot dumber than I guessed. And frankly, Fen, my estimate of your intelligence, your courage and your honesty isn't improving with this exchange. What a shame.

Cyrus Pinkerton said...

Fen wrote:

Believe what you want. I'm not going to wear myself out smacking lines drives at you when you can't even field a ground ball.

Fen, you can't hit a line drive or a ground ball. You whiff every time.

You consistently avoid substantive exchanges. I don't know whether to attribute this to lack of intelligence or lack of courage. I wish I could attribute it to lack of time, but considering that you are willing to filibuster endlessly, you clearly have the necessary time for a substantive response.

Don't feel obliged to respond to this with another of your lame excuses, Fen. In your fantasy world, you probably engage in debate and kick ass. In reality, however, you rarely engage, and you never kick ass. Mostly you filibuster. It's a shame that that's all you can manage.

Revenant said...

There is no "economic definition" as you imply.

There is a definition commonly accepted by economists, which is -- as I noted -- "two quarters of negative growth".

Fen said...

Cyrus: The truth is that your "amalgamation" relied on my exchange with Skyker from this week and used as an example the exact topic of our conversation.

Thats why its an amalgamtation. Idiot.

And when I reference specific instances, I use direct quotes and links, as I did in my 8:55AM post.

You're just being tedious. And I have no idea where your fillubuster meme comes from.

sbvor said...

The media will probably eat lots of crow on this one:

The Recession of 2008 That Wasn’t?

Actually, the media never admit their mistakes and never eat their well deserved crow. They just move on to the next "manipulation" (to put it as diplomatically as possible).

Somebody mentioned the IPCC.

Check out these two posts:

Is CO2 a Primary Driver of Climate Change?

Climate Change Videos