PDA

View Full Version : GDP growth of 5.7%



Ringramjr1
29th January 2010, 17:05
http://www.msnbc.msn.com/id/35149367/ns/business-answer_desk

"But when you look a little more closely at the numbers, it quickly becomes apparent that it’s hardly time to start breaking out the champagne. A big part of the latest GDP gain comes from a statistical adjustment for changes in inventory levels that don’t reflect real growth. Over the past year, businesses cut deeply into those inventories — not wanting to get stuck with unsold goods. Now that they’ve cut them to the bone, the rate of inventory-cutting has slowed. The way the GDP is calculated, that slowdown adds to “growth” — even though it doesn’t reflect increased production or sales. If you back out that inventory adjustment, GDP grew only 2.2 percent."

Don't you just love the spin job coming from the gov? Ridiculous.

DaleFromCalgary
29th January 2010, 17:32
SInce the DJIA closed down 53 points today, not to mention the past several days of 100-point drops, it seems that the traders aren't stupid enough to believe the numbers.

Although gold is creeping down, it is doing it very slowly. The physical delivery premium is climbing, and the precious metals market is in backwardation. The mass media trumpet the decline in PM futures, but don't seem to notice what is going on in the physical end of the business. Calgary newspapers don't even mention it, although they have pages on the oil industry every day. (Which, of course, is the kingpin of our local economy.)

Remember when oil first passed $50 a few years ago? Panic in the synoptic media, pundits yammering about speculation, and politicians staring grimly into the camera and saying something must be done. Now, despite the aftershocks of the Panic of 2008, oil is still in the mid-$70s range, even with the global economic slump. In 2009, pundits were predicting oil at $25 by the end of that year. If oil were to slump to $50 this year, everyone would be saying how cheap it was.

silversurfer1
30th January 2010, 08:38
Dale I agree. The U.S. stock market was down 116 even the day those bogus GDP numbers were announced. The euphoria will not last long. I think the Dollar is seeing it's last hurrah.