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U.S. Recession Worse Than Previously Estimated, Revisions Show

Submitted by Devon_Saunders on Fri, 07/31/2009 - 13:00
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What.. they were wrong? ~Shocked Look~

July 31 (Bloomberg) -- The first 12 months of the U.S. recession saw the economy shrink more than twice as much as previously estimated, reflecting even bigger declines in consumer spending and housing, revised figures showed.

The world's largest economy contracted 1.9 percent from the fourth quarter of 2007 to the last three months of 2008, compared with the 0.8 percent drop previously on the books, the Commerce Department said today in Washington.

``The current downturn beginning in 2008 is more pronounced,'' Steven Landefeld, director of the Commerce Department's Bureau of Economic Analysis, said in a press briefing this week. The revisions were in line with past experience in which initial figures tended to underestimate the severity of contractions during their early stages, he said.

The updated statistics also showed that Americans earned more over the last 10 years and socked away a larger share of that cash in savings. The report signals the process of repairing tattered balance sheets following the biggest drop in household wealth on record may be further along than anticipated.

Consumer spending, which accounts for 70 percent of the economy, decreased 1.8 percent in last year's fourth quarter from the same period in 2007, exceeding the prior estimate of a 1.5 percent drop. Purchases also began sinking sooner than previously projected, registering their first decline at the start of 2008 rather than in the second half.

http://www.bloomberg.com/apps/news?pid=20601087&sid=agi6JMNjYh2s

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Khomar  Sun, 08/02/2009 - 01:39
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Just saw this article. It spreads....

http://www.komonews.com/news/business/52084072.html

Some excerpts:

Sales of the once unstoppable Wii console have tumbled for the first time since its launch three years ago, sending the gaming giant's quarterly profit down 61 percent.

Nintendo blames a dearth of blockbuster games, without which enthusiasm for the Wii floundered.

but...

But gloom afflicts the entire gaming industry, not just Nintendo, said Atul Goyal, a technology sector analyst for CLSA. Other platforms, including Sony's PlayStation 3 and Microsoft's Xbox 360, also face declining sales.

In June, U.S. sales of game hardware, software and accessories plunged 31 percent from the same month last year to $1.17 billion, according to market researcher NPD Group. It was the largest year-on-year decline the industry has seen in nearly nine years.

Khomar  Sun, 08/02/2009 - 01:27
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I posted this previously on the Songbook thread, but it is most definitely appropriate for today's economy. I do believe we have been licked.

cougarbreath  Sat, 08/01/2009 - 01:45
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FDIC FRIDAY

Five new banks bite the dust.

http://www.fdic.gov/bank/individual/failed/banklist.html

First BankAmericano Elizabeth NJ 34270
Peoples Community Bank West Chester OH 32288
Integrity Bank Jupiter FL 57604
First State Bank of Altus Altus OK 9873
Mutual Bank Harvey IL 18659

And counting................

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LIVE and let live.

stick  Sat, 08/01/2009 - 12:44
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West Chester, Ohio is a very upscale town full of McMansions and yuppies.

Khomar  Sat, 08/01/2009 - 01:49
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Integrity Bank, eh. Now that is just too ironic.

cougarbreath  Sat, 08/01/2009 - 02:30
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Uh

What does integrity mean?

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LIVE and let live.

Khomar  Sat, 08/01/2009 - 11:25
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From the Merriam-Webster dictionary:

Integrity (noun):

  1. firm adherence to a code of especially moral or artistic values : incorruptibility
  2. an unimpaired condition : soundness
  3. the quality or state of being complete or undivided : completeness

By almost any definition, there is irony here. ;-)

cougarbreath  Sat, 08/01/2009 - 16:03
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I Hope You Realize

My comment was tongue in cheek. -)

:)

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LIVE and let live.

Khomar  Sat, 08/01/2009 - 16:05
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Yeah, I figured it was, but one can never be sure.... and when I looked up the word for fun and saw the triple irony... I just had to go for it. ;-)

Khomar  Sat, 08/01/2009 - 00:59
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This chart really tells it all (taken from market-ticker.org):

The second derivative will not go positive until the slope of that line turns upward and we will not see an actual y/o/y increase until (of course) the line goes over zero. So long as the line slopes downward the decline in GDP - the economy as a whole - is accelerating.

http://market-ticker.org/archives/1280-GDP-In-Pictures-The-Truth.html

Devon_Saunders  Sat, 08/01/2009 - 17:08
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The chart... Of Doom!!!

Thanks for that Khomar.. and TY for the Despair links as well. I got a kick out of them.

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~Live life to its fullest... with open arms, an open heart and most importantly, an open mind.~

Khomar  Sat, 08/01/2009 - 17:11
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You're welcome! :-D

cougarbreath  Sat, 08/01/2009 - 01:40
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Yep

Karl is right again!

So much for those "green shoots" we've been hearing about.

October is going to be a disaster. Once those third QTR -earnings hit, I just dunno.

Cash for clunkers is not the answer.

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LIVE and let live.

Khomar  Sat, 08/01/2009 - 01:45
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Yeah, especially if you click the license agreement.

A few choice images (courtesy of Despair, Inc.)

And my calendar picture for August:

cougarbreath  Sat, 08/01/2009 - 01:49
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Sad

But True.

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LIVE and let live.

Khomar  Sat, 08/01/2009 - 01:49
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Wow, I haven't been to despair.com in a while. Check out these links!

http://www.despair.com/gomo.html

http://www.despair.com/toobigtofail.html

http://www.despair.com/getoutofjafr.html

cougarbreath  Sat, 08/01/2009 - 01:54
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Very Sad

In fact, extremely sad.

On the bright side:

http://www.politico.com/news/stories/0709/25646.html

Some people are getting angry!

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LIVE and let live.

Khomar  Sat, 08/01/2009 - 01:56
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You know, the more time goes on, the more I realize that Despair.com is one of the best sources of wisdom on the Internet.

Khomar  Fri, 07/31/2009 - 13:29
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Karl Denninger has been noting the frequent occurrence of 30% in many financial reports of various key companies. It is his opinion that the entire national economy will need to retract (or is in the process of retracting by) 20% of the GDP to account for the debt bubble that made the economy seem much stronger than it actually was.

When I see these articles of a 1.8% decrease, I really have to wonder. When you have unemployment by government statistics approaching 10% with hundreds of thousands of layoffs every month and now reports of state workers being unpaid, how can the contraction be so small?

Devon_Saunders  Fri, 07/31/2009 - 15:18
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True

What does a government statistic really mean, nowadays...

It is whatever they want it to be.

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~Live life to its fullest... with open arms, an open heart and most importantly, an open mind.~

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