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.Emphases mine.
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.
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.
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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.
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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.
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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.
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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.
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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.