Atlanta Fed GDP Now forecast for Q1 2016 plummets down to 0.6%

DA60 said:

The Fed is clearly propping up the U.S. economy...take away their stimuli and the economy will collapse, imo..

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That is the fault of who?

Look in the mirror ... the American consumer defines the ups-'n-downs of the economy in the present political climate where the Replicants are controlling the HofR.

In the last mid-terms the American voter stayed away from the polling booths in droves, as they do in most mid-term elections.

The result is a meek, do-nothing Congress - all spectating the BoobTube for Dimwit Donald's next asinine remark. They're waiting for the Koch Brothers to tell them what to do, if anything - and for the moment it is Do Nothing Till You Hear From Us ... !

Any democracy that thinks voting in elections is "boring", especially if there's a good ballgame on TV, is asking for What Happened to happen - a democracy manipulated by the moneyed-class ...

Moreover, read this insight linked below excerpted from a book written in 2007, now since forgot but nonetheless still timely. Remember, the book was written when Greenspan was head of the Fed.

Most telling are the three paragraphs beginning with "In 1963 ..." Were it true, Kennedy was assassinated because certain Texans wanted LBJ in the cat-bird seat. Frankly, that notion has never been proven, but it is nonetheless provocative.

"Democracy for the Few"

Lafayette said:

That is the fault of who?

Look in the mirror ... the American consumer defines the ups-'n-downs of the economy in the present political climate where the Replicants are controlling the HofR.

In the last mid-terms the American voter stayed away from the polling booths in droves, as they do in most mid-term elections.

The result is a meek, do-nothing Congress - all spectating the BoobTube for Dimwit Donald's next asinine remark. They're waiting for the Koch Brothers to tell them what to do, if anything - and for the moment it is Do Nothing Till You Hear From Us ... !

Any democracy that thinks voting in elections is "boring", especially if there's a good ballgame on TV, is asking for What Happened to happen - a democracy manipulated by the moneyed-class ...

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I am neither rep nor dem...so why you are going on about Republicans to me is a mystery.

The fault lies with the Fed and both the GWB and Obama Administrations for the makeup of the Fed for the last 9 years or so.

There is zero proof....ZERO...that had the Fed done nothing and just let the economy fix itself that it would be in far better shape right now.
There would certainly be less income disparity as the Fed's QE's have indirectly pumped up the stock markets (which was their goal) and that clearly helps the rich as the middle class/poor own little/no stock.

And there was (as I have stated many times) the Great Depression and 1920/21 Depressions proved that massive government stimuli stagnates an economy whereas relative government uninvolvement helps the economy fix itself far quicker (respectively).

Lafayette said:

If that is the case, then the US is doing so a bit less than most countries: OECD, General government spending Total, % of GDP, 2013
View attachment 67199753

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We can spend less as a percent of GDP because we tax less as a percent of GDP.


Anyhow, what most people dont understand (although I realize you understand this) is that if a new nation was formed today, and it designated it's own currency denomination and declared that denomination to be legal tender and to legally be used in trade and to satisfy all financial obligations, the government couldn't wait until the tax revenues started coming in before it started spending money, simply because there would be none of that denomination off currency available to be taxed. The government would first have to spend or lend it into circulation.

That's why government spending has to happen before taxes. Thus, the balanced budget isn't possible in a growing economy (or in one that we wish to grow) without harming the economy. A balanced budget would necessarally result in an insufficient amount of money in circulation to allow for an increase in demand, and of course without an increase in demand, or at least the expectation of one, the private sector has no reason to expand.

CATHARSIS IN A BLOG

imagep said:

... what most people dont understand ... is that if a new nation was formed today, and it designated it's own currency denomination and declared that denomination to be legal tender and to legally be used in trade and to satisfy all financial obligations, the government couldn't wait until the tax revenues started coming in before it started spending money

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Public Services are pervasive and regardless of the money necessitated, Civil Servants must be paid to conduct them. Actually, we take said services for granted - except when we can't get our bit and we need it. Then the howling really starts.

I suggest we should be more concerned about what we spend it upon - because taxation and expenditure are a zero-sum game. Clearly, being World-Cop is not what Uncle Sam should be doing. We do not need a budget that consumes 20% of expenditures upon "toys for our boys" whilst families cannot even afford to send their kids through a PostSecondary Education degree thus getting the credentials absolutely necessary in this Brave New World of Ours.

And far too many just struggle to put food on the table.

Our life span in the US is 3-years less than in the EU - and I'd really like to know why. I figure it's due to rampant obesity, which causes people to die sooner than they would otherwise. (But I can't find any real studies in the matter.)

Our national priorities are wrong, and we, the sheeple, screwed a PotUS in the 2010-midterms who would have worked a few minor miracles to put things right.

As a consequence, we have more potential danger fomenting presently on the inside of the US than on the outside - I am amazed at the comparative reluctance of Americans to demonstrate when not a week goes by here in France without some demonstration going on that makes it onto the Nightly News. Not one week.

I, frankly, don't want to be around when/if that societal-bomb explodes in the US, that is, if it explodes.

Regardless, I'll be watching attentively from the other side of the pond ...

DA60 said:

... so why you are going on about Republicans to me is a mystery.

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Here's why:
*Obama was elected in 2008, and was gifted immediately the worst economic downturn since the 1930s by Bush junior.
*Reacting to the recession, a Dem Congress passes in 2009 a Stimulus Spending bill (ARRA) worth $831B that caps an exploding unemployment rate at 10%. Let's remember this: Depression-era unemployment reached 20/25%. Were the American people grateful? Nope.
*In 2010, with consummate indifference of the plight of the American unemployed, 62% of the electorate spectates the mid-terms like couch-potatoes in front of the BoobTube. Only 38% vote the T-Party (T for Troglodyte) Replicants into control of the HofR.
*The T-Party (funded by the Koch Bros) embarks upon an asinine tactic called “Austerity Budgeting”; i.e., the Replicants stonewall all Stimulus Spending that would put Americans back to work. Unemployment starts its grueling but slow descent from 10%. The purpose of the tactic is to prepare the 2012 elections within an atmosphere of high-unemployment in order to defeat Obama. (And the American unemployed be damned.)
*The tactic fails miserably in 2012, when American voters nonetheless re-elect Obama - but with both fiscal hands tied behind his back.Why? Because the Dems no longer control the HofR, from which all spending bills typically issue.
*Since the T-Party retains control of the HofR, it dogmatically continues to stonewall any Stimulus Spending. In fact, they try to undo Obama’s major political success in giving America a less-than-perfect Health Care coverage. That fails too, after a hair-splitting decision of the Supreme Court.
*So, the Replicants next have the lousy idea of a Debt Default, a notion so idiotic that it baffles the world. After all, a default would destroy the dollar as a Reserve Currency, which benefits enormously American exports and therefore jobs.
*But, "Hey, all that is just politics!" Right, and America behaves like a Banana Republic instead of a Beacon for Functional Democracy.

The above relates (my version of) the Democracy that Americans have today. And why? Because we, the sheeple, voted the T-Party dorks to dominate the Congressional Legislative Process and kept them in control. Which they employed to stymie a PotUS through two terms of office in the midst of the one (of only two) of the worst recessions in our history. And it took at least two-and-a-half years longer than would have been necessary had Obama been allowed to kick-start once more the economy with Stimulus Spending in 2010

So to whom should we point the finger of blame?

I think the above answers that question ...

Well, that 0.6% forecast on March 30 has now been revised down to 0.4%.



https://www.frbatlanta.org/cqer/research/gdpnow.aspx?panel=1

Lafayette said:

... - because taxation and expenditure are a zero-sum game. ...

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Why is a zero sum game?

BEYOND BELIEF

imagep said:

Why is a zero sum game?

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What I wrote:

I suggest we should be more concerned about what we spend it upon - because taxation and expenditure are a zero-sum game.

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What I meant: If we spend money foolishly on policing the world, we cannot employ it on objectives that are truly important to the betterment of the American people. I.e., the money is wasted.

Defense Spending in the US (20% of a huge National Budget) is an enormous boondoggle that benefits very few people except those in the Armed Services. (For instance, you cannot imagine how well they are living in Germany where we have replicated, literally, the American-way-of-life within the US compounds. Only the Romans had previously achieved that level of local in-place cultural presence far above that of the German tribes in those territories. And yet, the German-tribes nonetheless revolted against the Romans.)

How we can entice our young to risk their lives for a fully-paid Tertiary Education that they otherwise could not afford is beyond belief ...

Have we learned nothing from Vietnam? Apparently not, we fell yet again into the same Miasmic Mess out of witless pride.

American philosopher George Santayana (The Life of Reason, 1905), an extract I paraphrase: Those who cannot understand their errors of judgement are condemned to repeat them ...

Lafayette said:

BEYOND BELIEF



What I wrote:

What I meant: If we spend money foolishly on policing the world, we cannot employ it on objectives that are truly important to the betterment of the American people. I.e., the money is wasted.

Defense Spending in the US (20% of a huge National Budget) is an enormous boondoggle that benefits very few people except those in the Armed Services. (For instance, you cannot imagine how well they are living in Germany where we have replicated, literally, the American-way-of-life within the US compounds. Only the Romans had previously achieved that level of local in-place cultural presence far above that of the German tribes in those territories. And yet, the German-tribes nonetheless revolted against the Romans.)

How we can entice our young to risk their lives for a fully-paid Tertiary Education that they otherwise could not afford is beyond belief ...

Have we learned nothing from Vietnam? Apparently not, we fell yet again into the same Miasmic Mess out of witless pride.

American philosopher George Santayana (The Life of Reason, 1905), an extract I paraphrase: Those who cannot understand their errors of judgement are condemned to repeat them ...

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I'm all for reducing military spending, but why do you claim that tax/spend is a zero sum game? If it was a zero sum game, then we would have no federal debt.

DA60 said:

Well, that 0.6% forecast on March 30 has now been revised down to 0.4%.

https://www.frbatlanta.org/cqer/research/gdpnow.aspx?panel=1

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If my memory is correct, it was low last year and negative the year before. Slow first Q growth may be the new normal.

imagep said:

I'm all for reducing military spending, but why do you claim that tax/spend is a zero sum game? If it was a zero sum game, then we would have no federal debt.

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The budget is voted as a total-sum by Congress. It is literally a fixed budget that does not change all that much - so, if we spend on the military, we cannot spend on Education - or anything else that would be a real betterment for the American people.

This was the budget pie percentagewise in 2010:


Right now, the DoD budget is the only one of any consequence that a PotUS could reduce, since it is a humongous 20%. But to get a budget passed, the PotUS would have to not touch the total, and simply finagle the internal allocations. The budget is a zero-sum game - what adds to one department must be subtracted from another.

Frankly, I don't think the argument of reducing the DoD-budget and increasing the DoEducation is a difficult decision to defend. In any event, however, the sum of the addition and subtraction is "zero". But just reducing the DoD-budget by 5% and spending it on National Education shifts nearly $2B. Think of the schools that can be built, the teachers added and free postsecondary education that can be given.

The total budget must not change or it will have a real difficulty of getting passed. But the PotUS who performs that miracle-shift mentioned above sails right through two-terms.

The younger-voters will luv-it ...

Lafayette said:

The budget is voted as a total-sum by Congress. It is literally a fixed budget that does not change all that much - so, if we spend on the military, we cannot spend on Education - or anything else that would be a real betterment for the American people.

This was the budget pie percentagewise in 2010:
View attachment 67199893

Right now, the DoD budget is the only one of any consequence that a PotUS could reduce, since it is a humongous 20%. But to get a budget passed, the PotUS would have to not touch the total, and simply finagle the internal allocations. The budget is a zero-sum game - what adds to one department must be subtracted from another.

Frankly, I don't think the argument of reducing the DoD-budget and increasing the DoEducation is a difficult decision to defend. In any event, however, the sum of the addition and subtraction is "zero". But just reducing the DoD-budget by 5% and spending it on National Education shifts nearly $2B. Think of the schools that can be built, the teachers added and free postsecondary education that can be given.

The total budget must not change or it will have a real difficulty of getting passed. But the PotUS who performs that miracle-shift mentioned above sails right through two-terms.

The younger-voters will luv-it ...

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OK, I got what you are saying. Given a fixed budget, then spending allocation is zero sum. Makes perfect sense.

So what happens if the spending happens to be more than the budget? Or is it even possible that at the end of the budget year spending exceeds the budget. I dunno.

A PICTURE IS WORTH A THOUSAND WORDS

imagep said:

So what happens if the spending happens to be more than the budget? Or is it even possible that at the end of the budget year spending exceeds the budget. I dunno.

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Damn fine question.

Like when Uncle Sam goes off the deep-end and fights a war over The Sandbox? In that case, what happens is that Uncle Sam's Treasurer goes a borrowing.

The Treasury creates "T-notes" that countries like China LOVE to buy, because they are denominated in dollars (a strong currency) that the Chinese Treasury LOVES to hold. Not bad interest-rates, not nowadays, but ordinarily.)

And when that happens, the Federal Debt "goes north". As it has in recent history - see here:


And what is the consequence of a debt that is larger than our GDP? Well, here Conservatives have a point.

There is a time when that debt must come down, meaning it must be restrained heavily. I personally think that time has come, and Uncle Sam should get off his high-horse and get a handle on senseless DoD spending.

But you wont hear any of that kinda-talk in the halls of Congress. No, not nowadays with ISIS breathing down OUR necks by planting bombs all over the place in the US. Right?

My point1: It's Orwell's BigBrother all over again. There is always some war on the perimeter of the nation, for which the DoD budget is justified.

Yeah, right! Now pull the other leg ...

My point2: Who was PotUS in 1995 and tried his best to get a handle on that debt? Billy-boy Clinton.

Who was PotUS in 2002, when it all went to hell in a handbasket? Dubya.

My point3: What party keeps pissing-'n-moaning about the National Debt but will never-ever touch the DoD budget.

Oh, no, not our favorite toy! Not that one! Let's gut all those "handouts" to the low-life know-nothings ...

Lafayette said:

A PICTURE IS WORTH A THOUSAND WORDS



Damn fine question.

Like when Uncle Sam goes off the deep-end and fights a war over The Sandbox? In that case, what happens is that Uncle Sam's Treasurer goes a borrowing.

The Treasury creates "T-notes" that countries like China LOVE to buy, because they are denominated in dollars (a strong currency) that the Chinese Treasury LOVES to hold. Not bad interest-rates, not nowadays, but ordinarily.)

And when that happens, the Federal Debt "goes north". As it has in recent history - see here:
View attachment 67199918

And what is the consequence of a debt that is larger than our GDP? Well, here Conservatives have a point.

There is a time when that debt must come down, meaning it must be restrained heavily. I personally think that time has come, and Uncle Sam should get off his high-horse and get a handle on senseless DoD spending.

But you wont hear any of that kinda-talk in the halls of Congress. No, not nowadays with ISIS breathing down OUR necks by planting bombs all over the place in the US. Right?

My point1: It's Orwell's BigBrother all over again. There is always some war on the perimeter of the nation, for which the DoD budget is justified.

Yeah, right! Now pull the other leg ...

My point2: Who was PotUS in 1995 and tried his best to get a handle on that debt? Billy-boy Clinton.

Who was PotUS in 2002, when it all went to hell in a handbasket? Dubya.

My point3: What party keeps pissing-'n-moaning about the National Debt but will never-ever touch the DoD budget.

Oh, no, not our favorite toy! Not that one! Let's gut all those "handouts" to the low-life know-nothings ...

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Why does our debt ever have to come down?

We have had a debt for all but two years of this nation. I don't find anything particularly magical about the debt exceeding the GDP, the debt is just vapor, it's theoretical and never has to be repaid, however the GDP is real production. There is no connection between the two. It's like complaining that the debt is now worth more than the moon.

Here we sit today with a debt that is more than the GDP, and I really can't tell you that my financial situation is any different than it was a couple of years ago when the debt was less than the gdp. The size of the federal debt isn't like the speed of light. There are no particular absolute maximums that it can be, any metric that we compare it to is random and unrelated.

Oh, and those two years that we didn't have a debt? We had a depression.

DA60 said:

And there was (as I have stated many times) the Great Depression and 1920/21 Depressions proved that massive government stimuli stagnates an economy whereas relative government uninvolvement helps the economy fix itself far quicker (respectively).

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And I've refuted that many times. I've added it to my text file of responses to yer oft-repeated garbage:

imagep said:

Why does our debt ever have to come down?

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It doesn't, in fact. As long as we can afford to sustain it. It's not like a time-wise mortgage on a house, and it goes on for as long as we issue T-notes.

BUT, and it's considerable, the more debt we must sustain (after all, those T-notes out there bear a interest-rate that Uncle Sam must pay on the date, or else) the less we can do "other things".

Frankly, with the world changing under our feet, I sense that the "other things" have become key to the future of the country. And fooling around with DoD toys-for-our-boys is NOT on my list of "Most Important Things" Uncle Sam should be doing with his tax-dollars.

We must absolutely start investing in "smarts", thus enhancing the skills/competencies of both our youth preparing to come on the job-market, and those poor souls who have already lost those jobs "that aint comin' back" ...

Latest forecast: 0.1 percent — April 8, 2016

'The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2016 is 0.1 percent on April 8, down from 0.4 percent on April 5.'



https://www.frbatlanta.org/cqer/research/gdpnow.aspx?panel=1

BTW, if the Atlanta Fed is right (and they usually are pretty close) and the GDP grew only 0.1% in the first quarter? Then this just shows again what a bunch of boneheads the Fed are.

Last December they thought the economy was strong enough to withstand a rate hike (even though most people who actually seem to know the economy disagreed). We know what happened, they raised rates and the markets tanked big time.

Now America is staring at a first quarter with no growth when the Fed said just last December that things were going pretty well.

In other words...they were dead wrong yet again.


I have said it many times...the Fed are macroeconomic ignoramuses. They are bankers. And bankers are great bean counters but are lousy economists.

The Federal Reserve do NOT know what they are doing.


Also, Obama met with Yellen today - but they refused to say exactly what was discussed. They just patted each other on the back and said everything is fine.

I wonder if the Fed discussed with Obama the possibility that the tepid first quarter was actually negative? Especially being an election year, I am positive the Fed has strict instructions from the White House 'NO RECESSION THIS YEAR...NO MATTER WHAT'.

Interesting.

DA60 said:

We know what happened, they raised rates and the markets tanked big time.

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We also know the rate hike didn't cause the correction. Oil, China, tech correction.

>>I have said it many times...the Fed are macroeconomic ignoramuses.

Yeah, you do bore everyone with that nonsense on a regular basis.

>>I am positive the Fed has strict instructions from the White House 'NO RECESSION THIS YEAR...NO MATTER WHAT'.

Yeah, Yellen wanted to go up by two full points, but Obummer said he'd put a black magic curse on her, so she decided not to.

>>Interesting.

No, very boring and completely irrelevant drivel.


The NY Fed's new model, Nowcast, has Q1 at 1.1% and Q2 at 1.9%. GDPNow was at 2.3% for Q1 on March 11. They were way over then and they're way under now. The advance Q4 2015 was .7%, and it settled at twice that, 1.4%, by the third estimate.

DA60 said:

BTW, if the Atlanta Fed is right (and they usually are pretty close) and the GDP grew only 0.1% in the first quarter? Then this just shows again what a bunch of boneheads the Fed are.

Last December they thought the economy was strong enough to withstand a rate hike (even though most people who actually seem to know the economy disagreed). We know what happened, they raised rates and the markets tanked big time.

Now America is staring at a first quarter with no growth when the Fed said just last December that things were going pretty well.

In other words...they were dead wrong yet again.


I have said it many times...the Fed are macroeconomic ignoramuses. They are bankers. And bankers are great bean counters but are lousy economists.

The Federal Reserve do NOT know what they are doing.


Also, Obama met with Yellen today - but they refused to say exactly what was discussed. They just patted each other on the back and said everything is fine.

I wonder if the Fed discussed with Obama the possibility that the tepid first quarter was actually negative? Especially being an election year, I am positive the Fed has strict instructions from the White House 'NO RECESSION THIS YEAR...NO MATTER WHAT'.

Interesting.

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I think that should be the rule EVERY year. We don't need no stinkin recessions. Only the 1% benefit from them.

DA60 said:

https://www.frbatlanta.org/cqer/research/gdpnow.aspx?panel=1


And this just as Yellen was saying yesterday that their GDP forecast for Q1 from last year of close to 3% is on target.

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yes, thanks to libsocialist interference we now have a 1-2% growth economy but libsocialist welfare entitlement spending is at an all time high so the libsocialists are happy

US retail sales down 0.3% in March vs. 0.1% increase expected

'U.S. retail sales unexpectedly fell in March as households cut back on purchases of automobiles, further evidence that economic growth stumbled in the first quarter.

The Commerce Department said on Wednesday that retail sales declined 0.3 percent last month after being unchanged in February. Economists polled by Reuters had forecast retail sales edging up 0.1 percent last month.'

http://www.cnbc.com/2016/04/13/us-retail-sales-march-2016.html

Oops.


Looks like that 0.1% GDP Atlanta Fed estimate was a good one after all.

The retail sales report doesn’t include estimates for most services, which comprise the majority of consumer spending, and the US savings rate has increased to 5.5 percent of after-tax income, the highest level since December 2012.

Real disposable personal income is up nine percent since Feb 2013. U.S. household wealth recently hit a record $86 trillion. The ratio of debt-to-income is now at 104 percent, the lowest since 2002. Further easing the burden, the persistence of low interest rates has pushed debt servicing costs to a record low of barely 10 percent of disposable income. Low oil prices have produced a windfall for middle income consumers. (from various sources)

mmi said:

The retail sales report doesn’t include estimates for most services, which comprise the majority of consumer spending, and the US savings rate has increased to 5.5 percent of after-tax income, the highest level since December 2012.

Real disposable personal income is up nine percent since Feb 2013. U.S. household wealth recently hit a record $86 trillion. The ratio of debt-to-income is now at 104 percent, the lowest since 2002. Further easing the burden, the persistence of low interest rates has pushed debt servicing costs to a record low of barely 10 percent of disposable income. Low oil prices have produced a windfall for middle income consumers. (from various sources)

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I think you are right on those things, particularly on the cost of gasoline. But debt servicing seems a bit off. Yes mortgage rates have dropped but the type of financing most americans get--credit cards--haven't seen interest rates budge.