February 1st, 2010

#1916: "We are so screwed"

This piece explains in detail why the 5.7% rise in GDP in the fourth quarter of 2009 doesn't mean our economy is recovering.
First, over 60% (3.7%) of the growth came from inventory rebuilding, as opposed to just 0.7% in the third quarter. If you examine the numbers, you find that inventories had dropped below sales, so a buildup was needed. Increasing inventories add to GDP, while, counterintuitively, sales from inventory decrease GDP. I expect further inventory build-up in the next two quarters, although not at this level, and then we level off the latter half of the year.


Second, as my friend David Rosenberg pointed out, imports fell over the 4th quarter. Usually in a heavy inventory-rebuilding cycle, imports rise because a portion of the materials businesses need to build their own products comes from foreign sources. Thus the drop in imports is most unusual. Falling imports, which is a sign of economic retrenching, also increases the statistical GDP number.

Third, I have seen no analysis (yet) on the impact of the stimulus spending, but it was 90% of the growth in the third quarter, or a little less than 2%.

Fourth (and quoting David): "... if you believe the GDP data - remember, there are more revisions to come - then you de facto must be of the view that productivity growth is soaring at over a 6% annual rate. No doubt productivity is rising - just look at the never-ending slate of layoff announcements. But we came off a cycle with no technological advance and no capital deepening, so it is hard to believe that productivity at this time is growing at a pace that is four times the historical norm. Sorry, but we're not buyers of that view. In the fourth quarter, aggregate private hours worked contracted at a 0.5% annual rate and what we can tell you is that such a decline in labor input has never before, scanning over 50 years of data, coincided with a GDP headline this good.

"Normally, GDP growth is 1.7% when hours worked is this weak, and that is exactly the trend that was depicted this week in the release of the Chicago Fed's National Activity Index, which was widely ignored. On the flip side, when we have in the past seen GDP growth come in at or near a 5.7% annual rate, what is typical is that hours worked grows at a 3.7% rate.
No matter how you slice it, the GDP number today represented not just a rare but an unprecedented event, and as such, we are willing to treat the report with an entire saltshaker - a few grains won't do."

Finally, remember that third-quarter GDP was revised downward by over 30%, from 3.5% to just 2.2% only 60 days later. (There is the first release, to be followed by revisions over the next two months.) The first release is based on a lot of estimates, otherwise known as guesswork. The fourth-quarter number is likely to be revised down as well.
Emphases mine.

So: the GDP number may look really good, but it doesn't actually indicate that our economy is in a recovery. It's all paper, because people still aren't spending money and hours worked is not increasing--in fact, it's contracting, which ain't good.

Major bank is in trouble.

Bank bailouts created more, rather than less, risk.

Bosch intends to stop doing business with banks which give "excessive" bonuses to executives.

I'm not liking what I'm seeing.

* * *

There's only one reason I'm awake right now: an ambulance came to our neighborhood to pick up one of our "across-the-street" neighbors, Mr. Fleming.

I really hope everything's okay--I mean, relatively speaking, since you don't summon an ambulance because you've got an upset stomach. Judging by the amount of time the ambulance remained in their driveway after Mr. Fleming was put aboard, though, it can't have been anything life-threatening. (Like a stroke or a heart attack.)

The noise roused me from almost-sleep, and since my gut is still cramping and making ominous rumbles, I'm unable to go back to sleep. Argh etc.

* * *

You know, that "Mac Snack Wrap" thing McDonald's has just sounds utterly revolting to me. If I want a Big Mac, I'll just buy the fricking burger.

* * *

Thanks to Wonderduck, I got to see the K-on! DVD-only special episode at the end of the usual playlist tonight. Hoody hoo. That'll have to tide me over until April now.

* * *

China Human Rights Fact Sheet which I'm merely posting here for future reference.

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I really like the disclaimer at the top of this blog. I should figure out a way to include something like that here.

* * *

Sunday I used the DVD recorder to record the car shows. I set it to record at SLP, where you can cram six hours of video onto a disk. NOT RECOMMENDED because the video comes out looking like a bad copy of a bad videotape on a one-head VCR from 1983.

All kinds of motion artifacts, for one thing, and it's grainy to begin with. I should have known better; with the prior unit I never used SLP for exactly that reason and a moment's thought would have brought that to mind.

But WTF, it was the car shows; there's no fine detail or fancy graphics to be enjoyed. Just guys screwing around with cars--and that vintage 1983 VCR would be enough for that, believe me, if I could still get videotape for it. (Beta. No, don't ask.)

(And yes, I know that I can order videotape for it from a variety of sources. I don't desire to. Reason 1: I've got better tools now. Reason 2: I've got better tools which use media I don't have to order and pay through the anus for.)

Musclecar demonstrated how one can construct his own glass-pack mufflers, should one desire. It's really pretty simple.

...and I thought, "Dang, if I had my VW 412 today, instead of 20 years ago, I could fix the damn thing!"

My flux-core welder ain't anything special but it's enough to weld sheet metal; given the 412 I could fabricate and install patch panels for the floor and rocker panel on the driver's side, and I could also build my own freaking muffler (and for much less than the $120 it was in 1990 for a muffler for that car!).

(A quick Google for "type iv muffler" turned up a muffler for a mere $200. Yeah, it's a bargain! *retch*)

My homebrew muffler might not be as pretty as the factory part but it would do the job, and the Type IV was such a weird ugly car anyway I don't think anyone would have cared.

Shoot, once I get the Escort running maybe I'll build one and try it out just for grins. Take the flex coupling out and stick the muffler on the end of that pipe; that way I don't have to pull the real muffler off.

* * *

I still feel pretty rancid. I wasn't able to sleep this morning; my gut hurt when I lay in bed (cramps) so I sat up for a while listening to music. It was about 9 when I went to bed and I didn't fall asleep until after 10; I slept for about 3.5 hours and had a snack--and watched the car shows--before giving up and going back to bed as the sun was setting.

Dinner was General Tao's Chicken.

I've found that--when the gut blows up--nothing matters; I can eat soup or steak, oatmeal or ox tails, tofu or talmales, and the exact same things happen. Eating light (or low-residue or clear liquids) doesn't help. I get cramps, I get bloating, I get miserable other ways.

Regardless, the gut is still AFU and I can't sleep. If this goes on too much longer I'm going to have to take it to the doctor, dang it, but most of the time I try to take this to the doc it ends up going away before I go. And it's done this all my life, too, since the first symptoms hit in 7th grade.

Jesus, that was only 30 years ago. How lovely: three decades of Gut Malf. Argh.

But it sucks and it keeps me from having any energy to do anything useful. I was even fading out on the anime. *sigh*

Oh well; could be worse, I suppose.

#1917: Obama's budget is a sack of crap

There is some mightily poor reporting in this AP article on Obamatroid's budget proposal, because nowhere does it say "the budget for 2010". It does say "the budget for this year", at least.

Anyway, Obama-lama-ding-dong (oo!) proposes to break the record again: while the deficit for 2009 was around $1,451 billion, the projected deficit for his 2010 budget is $1,600 billion.

...yes, that includes his "spending freeze".

So there's a phrase missing from the following paragraph, which I have inserted (in bold) so as to increase the overall accuracy of the statement:
In an effort to address the deficit, the president's budget would institute a token and totally ineffective three-year budget freeze on a variety of programs outside of the military and homeland security as well as increasing taxes on energy producers and families making more than $250,000.
There we go.

"...[A]dministration officials argued that Obama inherited a deficit from President George W. Bush's Republican administration that was already topping $1 trillion when he took office,..." That's a lie. We hadn't spent that kind of money before Jan 20 of last year; it didn't reach that high until Obama's "stimulus package" went through.

Next paragraph: "Much of the spending surge over the past two years reflects the cost of the $787 billion economic stimulus measure that Congress passed in February 2009...." (Whose emphasis do you think that is?)

The Obama-tons apparently can't do math. You see, $1,451 billion minus $787 billion is $664 billion. So, you see, if "George W. Bush" had spent $1,000 billion before Jan 20, 2009, the deficit for last year would have been more like $1,797 billion.

Instead of, y'know, $1,451 billion.

NASA gets reamed; it gets a paltry $1.18 billion extra in its budget, because there's just not enough money for space exploration. But there's enough money to dump an extra $17 billion into the Pell Grant program, thus doubling its funding. (Hint: $17 billion is pretty close to NASA's entire annual operating budget.)

The economy is in the shitter, and the Democrats are spending money we don't have like a drunken sailor. Like a drunken sailor who also smoked a couple bowls and did five hits of acid. Meanwhile our country's creditors are becoming wary of our spending spree, and there is a limit to how much of our debt they will buy. (Not just how much they are willing to buy but how much they can buy.)

* * *

Vox Day puts into perspective the risible GDP figure for fourth quarter 2009: "The Bureau of Economic Analysis' advance report for fourth-quarter Gross Domestic Product, usually known as GDP, increased at a rate equivalent to 5.7 percent growth on an annual basis, more than twice the average GDP growth since 1950. This would be astonishing if there were any chance whatsoever that it were real." (Now where do you think those bold tags came from? Eh?)

He finishes, "The fact of the matter is that despite reports of one of the best quarterly GDP growths since the 8.0 percent growth in the second quarter of 2000 (stock-market investors may wish to note what happened after that white-hot report), the U.S. economy is not growing, it is contracting. And the increasingly positive numerical reports indicate little more than the growing divergence between the statistical map and the actual economy."

Yeah, 2000 was just a banner fricking year for economic development, wasn't it? You had the Dot Com bust right about then, remember that? Remember that George W. Bush came into office in 2001 with a recession already underway?

I don't remember hearing any of these "experts" gloating about how great the economy was on February 2, 2002. Oh, that's right; I was unemployed! Because of a recession! One that started in 2000, and never got any better; and which, in fact, was exacerbated by 9/11. Yeah.

* * *

I keep going back to the link at Amazon.com to look at the GPS I ordered. I'm surprised at how much I'm looking forward to playing with the thing.

I should have applied to work for Garmin, damn it. (In 2001.) Granted I would have had to move to Kansas City, but I'd probably still have a job now....

* * *

Listening to "Fudapen", I heard a lyric which got me to thinking about the common Japanese good luck phrase "Ganbatte kudasai!"

In the chorus of the song, the singer says, "Ganbare, Fudapen!" and it got me to thinking about how the phrase is usually translated. Normally it's translated as "good luck!" but the literal translation actually means "work hard!"

...and the other night when I was thinking about it, I realized that the correct way to translate it actually should be "Do well!" rather than "good luck". It just makes sense, particularly in the context it's used in the song; but even other places (such as when someone is going to take an entrance exam) it fits.

* * *

Apparently some TSA guys are getting spanked for a pseudo-Jeopardy! thing on a white board somewhere. Among the categories were "pickle smokers", "Our Gang", and "Creatures".

...referring to homosexuals, blacks, and lesbians, in that order...

--I laughed almost until tears came. Guess what: government workers can be racist/sexist/bigoted/homophobic at the same rate as the general population, and sometimes at a higher one because they see all of the worst behavior.

For the record, "pickle smokers" was what did it. For one thing, it conjures a mental image of the Vlasic stork lighting up a pickle like some kind of big green cigar....

* * *

Well, I guess I'm not going to get to sleep before the sun comes up. Again. How annoying.