Lesson of the Day: Never Underestimate the Negative Power of the POR Economy’s Princess, Princes, and Progenitors (4Q GDP Comes in at Annualized -6.2%)
When Uncle Sam’s initial report on fourth quarter 2008’s GDP came in at an annualized -3.8% contraction vs. analysts’ estimates of -5.1% in late January, I had hoped that it might indicate a better December than anticipated.
I was wrong. I am sorry.
I underestimated the expectations-shattering, confidence-draining, trash-talking, energy-starving, high-taxing, exponential deficit-growing damage the architects of the POR Economy — Nancy Pelosi, Barack Obama, and Harry Reid — could do in such a short amount of time since I recognized its June onset in early July (with a later the decades-in-the-making assistance of fellow party members who created the housing and banking mess).
This morning, the US Bureau of Economic Analysis revised the 4Q08 GDP contraction to an annualized -6.2% (i.e., it shrank by 1.56% during the quarter, considering negative compounding).
So once again, it’s time to revisit the POR Economy’s benchmarks from June 1, 2008:
- Unemployment — was 5.5% as of the May 2008 BLS report); now at 7.6%.
- Dow Jones Industrial Average — was at 12638, closed yesterday at 7182, down 43.2%.
- S&P 500 — was at 1400, closed yesterday at 753, down 46.2%.
- NASDAQ — was at 2523, closed yesterday at 1391, down 44.9%.
- GDP Growth/contraction — was 2.06% in the 12 months preceding July 1, 2008; has been an annualized -3.39% since (-0.5% in the third quarter of 2008, -6.2% preliminary estimate for the fourth, including negative compounding).
- Inflation — was 4.2% in the 12 months ended May 31, 2008; prices have dropped about 2.5% in the eight reported months since then (through January), and are up about 1.1% in those seven months excluding food and energy.
- Prime rate — was 5.0%, is now 3.25%.
Way to go, guys.
I told you so…
Now wait a couple of weeks for the February unemployment figures. I posted before that as far as records were kept February ALWAYS had an increase in employment. Given the continuingly high unemployment claims, I believe it will show a blood bath. And Tom, all that so called stimulus crap hasn’t really even started to be doled out.
Did you see Neal Cavuto’s interview with the Treasury budget director. forget his name. egads, his assumptions for economic growth in the 2009, 2010 and 2011 budgets are off in left field.
Comment by dscott — February 27, 2009 @ 2:40 pm
Oh, Tom. Don’t tell me you believe this economic meltdown is the Obama admin’s fault? I think the 30 yrs of trickle down has finally trickled out.
Comment by nise — February 27, 2009 @ 5:10 pm
#2, no Denise. It’s not the Obama Admin’s fault. It’s the fault of Pelosi, Obama, and Reid since roughly June of last year. I called it when it happened.
Comment by TBlumer — February 27, 2009 @ 10:47 pm
Rosey assumptions on the economy: http://online.wsj.com/article/SB123569619922288781.html?mod=rss_topics_obama
Nice graphs on the other tabs within the article. Remember the Dems railing against David Stockman (director of OMB) during the Reagan Admin? Well it seems Obama’s OMB guy, Peter Orszag is priming to do exactly the same thing except on the flip side for Obamanomics. http://www.medicalnewstoday.com/articles/131040.php
If you think Enron’s accounting was deceptive and self serving, with Orszag the government will polish this act to an order of magnitude. But in this case he will be creatively cooking the books to prove national health care is cheaper than private health care.
Comment by dscott — February 28, 2009 @ 10:04 am
Is Team Obama Cooking the Books on Budget Forecasts?
Is Rosy Scenario back in town?
http://mikesamerica.blogspot.com/2009/02/is-team-obama-cooking-books-on-budget.html
From Obama’s budget blueprint laughingly titled “New Era of Responsibility” [PDF page 114]:
Yet, these assumptions are based on the Obama economic team forecast which even they admit is decidedly more rosy than the Congressional Budget Office and the Blue Chip Economic Indicators [PDF page 132]:
Comment by dscott — February 28, 2009 @ 10:15 am