Bush: Beware of the Three-Handed Economist
The White House has had a tough time with the souring economic data in recent months. President Bush and his advisers have steadfastly avoided using the “R” word to describe the slowdown, even though many Wall Street economists have already made the recession pronouncement. Today, Mr. Bush and his spokesman used April’s payroll decline — which wasn’t as bad as projected — to fire a few shots back.
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At a speech in Missouri today, the president explained that the economic stimulus package passed in February but is only now starting to kick in. “The point I’m trying to tell you is, is that we worked well with Congress and that the effects of a robust attempt to inject life hasn’t really kicked in yet. And I’m — if you believe these economists, if they had three hands they’d say, on the one hand, on the other hand, and then on the third hand. [Laughter.] But we’ve got some smart folks around that are analyzing what this means, and they feel confident about it.”
At a press briefing aboard Air Force One, White House spokesman Tony Fratto went through the usual dance with reporters about recession terminology. He said, “Very little of the data … are approaching anything consistent with recessionary data.”
“Obviously, growth is growing, so that is not consistent with the recession,” Mr. Fratto said. Retail sales figures “are probably the weakest … but all the other economic data that we’re seeing are stronger than what you would see consistent with past recessions.”
After being told that analysts were expecting a decline of 75,000 jobs in April, he responded: “Yes, you know, we don’t put a whole lot of stock in private forecasting on these numbers. The numbers are so volatile, you know, no one should pay too much attention to what the private forecasts say.” – Sudeep Reddy
Well, we technically have not had 2 consecutive quarters of negative growth and do not meet that criterion. Let’s not throw around the “R’ word loosely!
Buy equities!
Does anyone pay attention to what HE says anymore???
Atleast John McCain has finally told the truth that we invaded Iraq for Oil!
Just more demand for body bags… this time around it’s the US Tax Payer that in the bag… you think! This president has lost all consience of man on…The Street… you think!
The OZ
Keep the Bush Tax Cuts!
People in America are becoming scared. The “R” word might be Revolution.
Look at that drawing of George W Bush with the sly smile in the WSJ blog. Is there a resemblance to Alfred E. Neuman of “What me worry”?
Bush… for a third term!
Mr. Buffett’s conglomerate said revenue fell 21%… now here folks is a “Deflationary Depression”… talk you way out of this one… “One will fall… and the rest are following very quickly… now!” You think! Please define… “Quickly”?
The OZ
“The numbers are so volatile, you know, no one should pay too much attention to what the private forecasts say.”
I do!
“Keep the Bush Tax Cuts?” Let’s do what MCain wants and cut the gas tax, too. (Just be careful when you drive over an old bridge.) Why have any taxes? Gosh…we could carry this to the extremes. The only thing then lacking would be a violin for Bush to play as America “burns.”
Buy equities!
You guys love to hate Mr. Bush, eh. It’s ALL his fault, huh. I bet most of you schmoes are supportive all things green to…
If so, look in the mirror. Because, personally, I blame you.
Did you clowns think we could slit our own throats by coloring every piece of energy legislation Green, and get away with it?
Did you really think we could force normal people to pay $300 a month or more for power and heat and even more than that for motor fuel and not pay the piper?
All to save the MANATEE? All in fear of the Great Melting Ice Cube In The Sky? All in blind belief of rumors that all those Dead Dinos we keep pumping up from 20,000 feet down have finally been exhausted?
Do you Climate-phobes think every decision you make can be dictated by Irrational Fear Of Crap You Don’t Understand and your life and well-being not ultimately be effected?
Drill Anwar. Drill the OCS. Now. And get to work building the nukes we’ll need to power all those hydrogen refueling stations all you weather-phobes are screaming for.
When we get back to the supply on energy, the economy will fix itself in no time at all.
If an accusing finger is to be pointed at Mr. Bush, it is only because he he failed to stave off the Green Lobby and the Weather-phobes. His departure from supply-side policies - in search of political expediency - in the energy sector has brought to where we stand now.
And I agree with WSW, make the tax cuts permanent.
A breather next week. We need 50 on the ISM Service report coming out on Monday. Otherwise, we will hopefully hang on to our gains.
Buy equities.
This is the right opportunity to sell stocks as the Dow is expected to reach belwo 12000 again by end of June.
The new Republican montre “Borrow and Spend” has now been shown to be a scam. Irrsponsible spending and a $3 billion/wk war have only enriched the rich at the expense of the middle class and thrown us into what will prove to be the worst recession since the Great Depression.
“The numbers are so volatile, you know, no one should pay too much attention to what the private forecasts say.”
Bush Inc. bought large positions in deep out of the money call options underlying VIX. Then pumps it!
I have shown that the Business Equipment index of Industrial Productions is about to deteriorate as the level of Commercial & Industrial Loans have climbed even more rapidly than consumer debt.
This will slow the economy further and exacerbate the leverage problem created by the consumer and now by the Commercial & Industrial Loans. See
http://wrahal.blogspot.com/2008/05/business-sector-to-follow-consumer.html
Great another bad economists joke. I’m glad our policy-makers still ascribe to Keynesian economics that was disproven years ago.
Oh, Ramrod. Your earthy wisdom has moved me.
Actually, I agree with you on the nuke issue. We do need to plants.
Why is it not a national security issue to get off imported oil? Shouldn’t it be? Clearly not with ethanol (sorry, farmers), but with something else.
Dear OpsControl:
Back it up, publish a link (of an putatively independant source).
Hmmmm….look at where the evil one’s rank. Makes you think, well that is until John McCain gave us his energy policy. Can we say war crimes!
Where gasoline is cheapest
Rank Country Price/gal
1. Venezuela 12 cents
2. Iran 40 cents
3. Saudi Arabia 45 cents
4. Libya 50 cents
5. Swaziland 54 cents
6. Qatar 73 cents
7. Bahrain 81 cents
8. Egypt 89 cents
9. Kuwait 90 cents
10. Seychelles 98 cents
45. United States $3.45
3.2% headline inflation. 2.1% core inflation. GDP positive..no recession. Employment 5% down a tick. Dollar improving. 2 year treasury is up. Hey Bush has not done so badly! Make tax cuts permanent!
“666”… High Seven… you think! Come-on Babe… give me a SEVEN… come eleven!
The International Monetary Fund Thursday gathered 25 of its member states to develop guidelines for state-controlled sovereign wealth funds, whose skyrocketing foreign investments are raising concerns about political motivations, AFP reported.
At the end of a two-day meeting, the new group, the International Working Group of Sovereign Wealth Funds, issued a statement outlining its plan to agree on voluntary guidelines for best practices for SWFs by October. “The IWG aims to agree on a common set of voluntary principles for SWFs, drawing on the existing body of principles and practices, to help maintain the free flow of cross-border investment and open and stable financial systems, “the group said.
The working group is co-chaired by Jaime Caruana, director of the IMF’s Monetary and Capital Markets Department, and Hamad Al Suwaidi, an Abu Dhabi finance official and director of the Abu Dhabi Investment Authority. The 25 member countries include Australia, Azerbaijan, Bahrain, CHINA, IRAN, LIBYA, Norway, Qatar, RUSSIA, SINGAPORE, the UNITED STATES and the UAE. The US loves competition… you think… looks to the names in “BOLD… High SEVEN?”… You think! Our own government just shot the US Tax Payer in the head… right between the eyes… have it! You think!
The OZ
Japanese Banks Lose $14.4b… Japanese financial institutions together lost more than 1.5 trillion yen ($14.4 billion) in the year to March because of the US subprime mortgage crisis, a report said Friday. The nation’s eight major banking groups alone are likely to post a combined subprime-related loss of more than 900 billion yen, AFP wrote.
That is around 200 billion yen more than forecasts made public so far, the Nikkei newspaper said. “While this is less than the losses incurred by their European and US counterparts, it has still dealt a major blow to Japanese banks’ profit forecasts,“ the Nikkei added.One of those eight, Mizuho Financial Group Inc., will post subprime losses likely to top 565 billion yen, highlighting how banks widely involved in such investments are set to pay the price, the paper pointed out. Brokerage house Nomura Holdings Inc. and Norinchukin Bank saw losses grow heading into the end of fiscal year 2007, the newspaper said. Aioi Insurance Co. and Sompo Japan Insurance Inc. booked 83.6 billion yen and around 30 billion yen, respectively in losses. Oh me oh my… when will it end… in the Sub-Prime… floating on a SEA of $Muck Money Brime! YOU THINK! YEP!
The OZ
Police clashed with union activists in Istanbul on Thursday as workers around the world made soaring food prices their May Day battle cry, AFP wrote.
Police fired pepper gas and water cannon and detained 505 people. Six police and two demonstrators were injured, according to officials quoted by Anatolia news agency.
Also, hundreds of Lebanese protested against inflation on Thursday at a May Day rally organized by the communist party, demanding an increase in the minimum monthly wage.
Volatile crowds also staged rallies in the Philippines’ capital of Manila and Indonesia’s Jakarta, carrying signs demanding “Jobs, Justice, Food“ and “Lower Food Prices Now.“ The struggle to afford basic food staples such as rice was the focus of many of the demonstrations in Asia, where rallies were patrolled by huge numbers of police, AFP wrote.
Jakarta police chief Adang Firman told reporters after monitoring the capital from a helicopter that 10,000 security personnel had been deployed and another 50,000 were on standby.
Elite police commandos armed with assault rifles were positioned on highways leading to Manila.
“The economic crisis is sharper and more intense this year,“ said Renato Reyes, secretary general of left-leaning activist group Bayan. “Workers in the Philippines have every right to be angry and frustrated.“
Rallies focusing on rising living costs were also held in Singapore and Bangkok, where protesters waved signs saying “Expensive rice prices, cheap labor wages. How can laborers live?“
The soaring price of rice–the benchmark Thai variety now fetches some $1,000 a ton, three times more than a year ago–has led to a supply crunch that is worrying governments wary of worker unrest.
In Greece, transport and public services ground to a halt as unions called a 24-hour May Day strike against a privatization drive and pensions reform. Ferry boats and intercity trains were reduced to a minimum, all train connections to foreign destinations were cancelled and state carrier Olympic Airlines carried out only one flight per destination.
In Morocco, the government announced it would go ahead with scheduled pay rises despite the opposition of union who say the average 10 percent rise is not enough to keep up with inflation. The current minimum salary is about 160 euros ($245) a month.
About 44,000 people attended a rally in Tokyo where Japanese Communist Party leader Kazuo Shii railed against the government for reinstating a controversial petrol tax.
The OZ
And you thought we… had problems… it’s spreading like wild fire… You Think!
The OZ
BOb Zoellig of WOrld Bank praised Bush’s and US long term effort to stave off food shortages. With credit crunch worldwide will see dollar strengthening continue. Franklin
FOr all taxpayers. TIme is now for politicians to wake up, reduce defense spending, reduce wasteful medicare and medicaid spending lend a helping hand to all of us by reducing tax rates across the board. No more increases is FICA ceilings please. It is hard to fathom how Warren Buffet pays the same social security taxes I do. Taxes take 50 cents out of every earned dollar. Why work?
Does Obama read this Blog?
Inflation? Nah
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more at http://money-sage.com
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Yesterday my wife posed a question: “Do you know how much a can of coffee costs now?” she inquired. Seems like the local Costco has raised the price of a 2 pound can of coffee from $6/can to $9/can. Hey, that’s 50%! And in just a few short months. Well, probably just one of those oddities.
I must admit when I tanked up my trusty steed (read: good mileage compact) today, I was a tad shocked to have to pay $4.16/gallon. Ye olde steed is costing a lot more these days to keep on the trail.
Well, it’s only food and gas. Hey, wait a minute. My water and electric bills have also been skyrocketing. What’s goin’ on here? Uncle Ben (Helicopter Ben, that is, busy man helicoptin’ all that money in — or at least piping it over to the FED from the old, reliable U.S. Government Printing Office)says that the CORE rate of inflation ain’t nuthin to worry about. Just a tad over 2%, at last count. We presuppose that all that there helicoptered money hasn’t made its way onto the price tags yet. Besides, laptop computer prices and memory chip prices keep goin’ a’down. Mebbe we should eat computer chips. Or helicopter chips, you think?
Returning to our normal, studious and erudite selves, we will freely own that we have long considered the very real threat of a massive deflationary collapse to be far more significant than an upsurge of inflation, and/or a return to the stagflationary days of the ’70s. This remains our view. An intensification of food and energy inflation is ultimately deflationary in its consequences, for the very obvious contractionary impact it has upon the DISCRETIONARY CONSUMER SPENDING which constitutes the difference in the American economy between growth and decline. However, an unlimited, uncontrolled, and mindless money-creating program intended to avert such a deflationary collapse could well have severely negative economic and financial market consequences. A period of high inflation, monetary instability, and fiscal imprudence could avert a collapse, but only temporarily. The collapse, when it finally comes after this inflation-induced delay, could indeed be worse than a severe downtown sooner which both fiscal and monetary policy seek to limit, rather than avert entirely. In plain English, a contrived inflationary interlude, such as the money helicopter in the white marble palace on Constitution Avenue now seems determined to produce, could as a preliminary to a future depression first wipe out the middle class, savers, and retirees, a la the 1923-1924 printing press inflation in Germany — followed a mere 6 years later by the onset of the Great Depression in Germany and the ascent to power of one Adolf Hitler.
What is required of the political and monetary authorities is not a mindless extremism mirroring, but in the opposite direction, the prior mindlessness, but rather prudence, circumspection, and the APPROPRIATE — rather than the PROMISCUOUS — employment of money-creating and Keynesian deficit spending mechanisms. In other words, what is required is LIMITED and CAREFULLY CONSIDERED policies rather than hysterical and Pavlovian responses.
Perhaps we should follow the Peruvian model? (See our recent post on this subject). Seems to us we have had more than enough monetary policy instability and fiscal imprudence for a couple of generations over the Greenspan-Bernanke-Bush years.
As a shareholder of Microsoft for many, many years, I am thrilled that Balmer walked away from the Yahoo purchase!
Money - sage - Amen.
Triple Handed Ping Test…
The OZ
Buy equities! With the risk part of your portfolio, consider thoroughbred investing. Excellent write offs for higher end taxpayers requiring relief!
Ping pong. Ping pong. That’s the war between the ‘flations du jour. Just alot of ping pong that ends like tic-TAX(my)-toe
wsw, you could be right, but if this market does zoom, I feel it could mirror Zimbabwe’s market, with their attendant store of value ($). If fact, according to Barron’s, Zimbabwe has resorted to counterfiting its own currency to show that inflation is quite as astronomical. Can you imagine, a govt counterfiting its own currency? Sounds a little like snappin dollars into existance from thin air
Haven’t heard from the Big Toe… lately… hope he’s ok?
Chiffon Pies are a dime a doz these days… you think… YEP!
The Market will continue its upward bias!
Although I really do like the soup of the day… now coming out of our most diversified and corrupt Government… you think! Cool word (multiple meanings and directions)… you think!
.
Historically, flations are phenomena that last for years, not weeks or months. In fact, they are often associated with decades - the 1930’s for DEflation, the 40’s, 50’s and 60’s for REflation, the 70’s are largely known for STAGflation, and the 80’s and 90’s for DISINflation. For the current decade we seem to be in a state of confusion to define what we are experiencing or more importantly, what we will experience next week. The rapid changes in the global economy are presenting fast moving challenges for monetary policy and in my opinion, they are the most likely reasons that Chairman Bernanke has gone from deflation fighting commentary in 2002 to inflation fighting in 2006. These changes will take years (maybe decades), not weeks or months to work themselves out. While I would like to stop hearing so many flations so we can have a more peaceful investing climate, Ah… yes, I wish it was so… TOE… but I doubt that it will happen for a long time. I think… you need to coin the term for the 2000’s and beyond as a period of CONFUflation.
The OZ
Most astute investors are averaging their way into the Market!
I got on these here threads and only saw one or two posts by Toe, along with iz the three of you really had some fine stew cooking.
.
“CONFUflation” Pretty good! But “CONflation” might more aptly describe the rip off.
private sector expectations are not to be trusted?! what are you, a green hippie liberal commie? I disagree completely. I take the street over the OMB any day.
also, come on, isn’t it too soon to say we are out of the woods? Not necessarily sure if it’s a recession, but I think the bush administration is being a little too rosy here…
No recession until 2 negative GDP, is the classical definition. The media and others are inexcusably using the R word. Unless and until this classical definition is met…. we remain in growth slowdown albeit a nasty one for man y folks!
WSW,
I’m a pretty astutue investor and so I direct the max of the 401k money into the market, but I’m 40% cash right now and anything I put in, I hedge.
.
BTW, a recession is not, technically, a two period slowdown
http://online.wsj.com/article/SB120720002483686065.html
Prediction: Yahoo will close at least 5 points. Remember that Yahoo was 19 when Microsoft showed interest. Now Yahoo have alot of explaining to do with its shareholders.
I have been a shareholder in Microsoft since the 1980’s and as such, I am extremely happy that Ballmer withdrew the offer.
I am sure that Yahoo shareholders will be upset since they could have made “mucho” money, if the deal went through!
I spoke with some stockholders of Microsoft today and they and myself are happy campers!
Recession calls are difficult, There is no single definition of recession, making the call more difficult. Technically a recession is whatever the NBER recession-dating committee says it is… and they are slow to deliberate. However practically speaking, going back to 1960, each recession except the last one reduced Yr/Yr GDP growth to a negative number at some point. THAT’S YR/YR growth and does not involve counting quarterly declines or making such declines consecutive. It’s not a definition of recession but a characteristic of them…
In the 2001 recession Yr/Yr GDP growth ‘troughed’ at +0.2%. That’s the exception to the Yr/Yr decline in the GDP observation or stylized fact. Compare that to 2008 Q1’s Y/Y growth of 2.5% - near trend.
Trend growth is usually not called a recession. But if you’ve taken off you shoe and pounded on the table enough, screaming that this is a recession it still might look like one to you. Having a stake in the outcome can cloud your vision.
By the way IF it’s a recession that began in December 2007 the job loss at this stage is small and the decline in hours worked is the smallest on record.
If it looks like a duck and walks like duck but barks like a dog is it still duck?
another tough question…
Two quarters of negative GDP has nothing to do with the recession definition in the U.S. Stop repeating this error over and over. There were not two consecutive negative quarters of growth in 2001.
Glad he has some “smart folks” looking into it–heckuva job!
All of the expects that I have heard and read have emphatically defined a recession of 2 consecutive negative quarters and so I continue to accept this definition rather than the one offered by Brusca. And so, we will await the NBER call!
How can we get the government out of our pockets! We can spend our hard earned dollars and keep business going and work out of these “hard times”
Why are you smiling Mr. President? Anything funny in our crisis?
![[Bush]](http://s.wsj.net/public/resources/images/HC-GG773_Bush_20060320154127.gif)

Real Time Economics offers exclusive news, analysis and commentary on the economy, Federal Reserve policy and economics. The Wall Street Journal's Sudeep Reddy and Phil Izzo are the lead writers, with contributions from other Journal reporters and editors. Send news items, comments and questions to