GDP report - 3Q

[St. Louis Hawk]

Economy grew at 2.6% annualized. Beat the street estimate of 2.4%

So, no recession under any definition.

Usual suspects will appear here shortly to talk about fake numbers and/or labor participation rate.

Loading…

www.cnn.com

Thanks Brandon!

 

[anon_b29nm7v7dwp6r]

Thanks Brandon! I’m sure there will be folks hopping in here shortly to explain how the economy growing is actually a bad thing….

 

[noleclone2]

Dow will probably plummet on the news.

 

[anon_b29nm7v7dwp6r]

Dow will probably plummet on the news.

Looks like we may be back to good news=Good news….futures just jumped 300 pts

 

[Finance85]

It's good news. Better than expected. We need a positive GDP for awhile to get back some balance with the money supply.

 

[DooBi]

Thanks Brandon! I’m sure there will be folks hopping in here shortly to explain how the economy growing is actually a bad thing….

So, his fault for everything up till the good news too?

 

[Huey Grey]

Weird. Trad assured me in another thread that we were absolutely in a recession.

 

[ironside1]

Weird. Trad assured me in another thread that we were absolutely in a recession.

It’s almost like he is rooting for it.

 

[NCHawk5]

“However, with the Federal Reserve continuing to hike rates, and most of the impact of past rate hikes yet to be felt, this could be the last good report we see for a while.”

This is a nothing burger. Similar to the “deficit reduction,” we just have a numbers/timing issue that will fade.

 

[dekhawk]

Price index lower than expected also. Good news

 

[EasyHawk]

This is great news!

 

[Huey Grey]

It’s almost like he is rooting for it.

I kept telling him that the metrics just weren't there. But nothing could move him from his belief. I even posted fed data but he would just go on about how it didn't include October so wasn't legit. Weird guy.

 

[bunsen82]

So, his fault for everything up till the good news too?

I don't attribute cyclical changes in the market to any one individual or party in power. 80% of all stimulus during the pandemic was done during Trumps term. Inflation was cropping into the system due to low interest money for too long. That is more of a fed issue.

Now the government needs to learn we are in a new era, you can not throw around money with no ramification.. All governments need to learn real quick money is not free. You just can't toss it around or do unfunded tax cuts (ahem ahem republicans) otherwise the market will get upset very quickly.

 

[luvmyhawks]

Good news. However:

“T“This is the sort of GDP report we should be happy to see at this point in a recovery,” said Dean Baker at the Center for Economic and Policy Research in a note. “However, with the Federal Reserve continuing to hike rates, and most of the impact of past rate hikes yet to be felt, this could be the last good report we see for a while.”

that doesn’t give me a great deal of confidence. Same type of thing happened in 07-08. 2 months of contraction followed by one month of positive growth. We all know what happened after that.

 

[ironside1]

I kept telling him that the metrics just weren't there. But nothing could move him from his belief. I even posted fed data but he would just go on about how it didn't include October so wasn't legit. Weird guy.

He’s playing 4-D chess. We can’t keep up with him.

 

[ironside1]

Good news. However:

“T“This is the sort of GDP report we should be happy to see at this point in a recovery,” said Dean Baker at the Center for Economic and Policy Research in a note. “However, with the Federal Reserve continuing to hike rates, and most of the impact of past rate hikes yet to be felt, this could be the last good report we see for a while.”

that doesn’t give me a great deal of confidence. Same type of thing happened in 07-08. 2 months of contraction followed by one month of positive growth. We all know what happened after that.

I don’t know if anyone is arguing that the future is bleak. I think we are just stating that the recession isn’t occurring yet.

 

[bunsen82]

Good news. However:

“T“This is the sort of GDP report we should be happy to see at this point in a recovery,” said Dean Baker at the Center for Economic and Policy Research in a note. “However, with the Federal Reserve continuing to hike rates, and most of the impact of past rate hikes yet to be felt, this could be the last good report we see for a while.”

that doesn’t give me a great deal of confidence. Same type of thing happened in 07-08. 2 months of contraction followed by one month of positive growth. We all know what happened after that.

I am still anticipating a recession in the 1st quarter next year. There are a couple things that could juice up growth but I don't think the fed wants that.

 

[Huey Grey]

How will we see a recession with still high demand for everything? Housing, healthcare, cars, labor. Demand is outstripping supply in all of these areas.

 

[luvmyhawks]

I don't attribute cyclical changes in the market to any one individual or party in power. 80% of all stimulus during the pandemic was done during Trumps term. Inflation was cropping into the system due to low interest money for too long. That is more of a fed issue.

Now the government needs to learn we are in a new era, you can not throw around money with no ramification.. All governments need to learn real quick money is not free. You just can't toss it around or do unfunded tax cuts (ahem ahem republicans) otherwise the market will get upset very quickly.

You had a good post here until you decide to only throw shade at republicans. Comical.

 

[Whiskeydeltadeltatango]

Alright, here is the play boys, we change the definition of the word recession so that the 2 qtrs of negative is no longer the standard, then we beat the number by .2 on the 3rd qtr, while explaining the shit is still coming down the pipe, then tell people it isn't a recession.... for now...


Brilliant!



It's good that the numbers went up, might want to slow down on the victory laps.

 

[luvmyhawks]

How will we see a recession with still high demand for everything? Housing, healthcare, cars, labor. Demand is outstripping supply in all of these areas.

I am hopeful. However, housing has slowed down quite a bit, which it needed to. Nothing crazy yet. More like just a normal real estate market as opposed to the ridiculous inflation fueled market we saw the last couple years.

 

[onlyTheObvious]

I define a recession as my personal financial situation and my 401k performance.

if both those are fine I really don’t give a rip about a label assigned to the broader economy.

 

[bunsen82]

You had a good post here until you decide to only throw shade at republicans. Comical.

I essentially called out both parties - Democrats can't give out free money, republicans can't keep going to cut taxes mantra ( this is their solution to stop inflation).

You do realize why Great Britain almost imploded right - because of unfunded tax cuts. You had a prime minister lasted a whole 7 weeks.

 

[Whiskeydeltadeltatango]

I essentially called out both parties - Democrats can't give out free money, republicans can't keep going to cut taxes mantra ( this is their solution to stop inflation).

I'm still waiting for "the rich" to get taxed.

 

[anon_b29nm7v7dwp6r]

Price index lower than expected also. Good news

Yeah just saw that, great news. Things are certainly looking up.

 

[luvmyhawks]

I essentially called out both parties - Democrats can't give out free money, republicans can't keep going to cut taxes mantra ( this is their solution to stop inflation).

You do realize why Great Britain almost imploded right - because of unfunded tax cuts. You had a prime minister lasted a whole 7 weeks.

You specifically called out republicans, which is dumb.

 

[bunsen82]

You specifically called out republicans, which is dumb.

No it is not when republicans want to just go in and do more tax cuts. I will equally call out dumb shit from both sides. It just tends to be more republican dumb shit from my view point.

FYI anyone look at that amendment to bear arms in Iowa. Does anyone realize what this amendment is implying? There is no rules on where a gun can be carried into. Hospitals, schools athletic events and gatherings ect. This is the dumbest thing I have seen in a long time. Just wait for your first mass killing in one of these places due to this if it passes. But you have republicans who will look at it saying someone is taking away my gun rights I need to vote yes for this.

 

[joelbc1]

I don't attribute cyclical changes in the market to any one individual or party in power. 80% of all stimulus during the pandemic was done during Trumps term. Inflation was cropping into the system due to low interest money for too long. That is more of a fed issue.

Now the government needs to learn we are in a new era, you can not throw around money with no ramification.. All governments need to learn real quick money is not free. You just can't toss it around or do unfunded tax cuts (ahem ahem republicans) otherwise the market will get upset very quickl

NOTHING is free! Especially “free money”. I agree with the idea of the first round of “ Covid cash”...but understood it would be badly abused by businesses that did not need the funds.....I even wrote MY President and thanked him for the set of PXG irons he bought me!
The last couple of rounds of money were badly aimed....and excessive. However, the problem was this was coupled with a silly tax cut and no efforts were made by the government to “recover” this free money....free money + artificially low %rates + needless tax cuts = inflationary pressures......add the “international supply chain” issues and VOILA! Here we is"....

 

[BanjoSaysWoof]

It’s almost like he is rooting for it.

we need a recession badly.

recession is a dirty word but from an economic perspective, recessions kill zombie companies and force a reallocation of resources to more efficient outcomes.

I am rooting for a recession. This era of debt fueled growth needs to end.

 

[luvmyhawks]

No it is not when republicans want to just go in and do more tax cuts. I will equally call out dumb shit from both sides. It just tends to be more republican dumb shit from my view point.

And from my viewpoint, both sides are equally dumb and irresponsible.

 

[lucas80]

So, his fault for everything up till the good news too?

There he is.

 

[lucas80]

I define a recession as my personal financial situation and my 401k performance.

if both those are fine I really don’t give a rip about a label assigned to the broader economy.

Sounds like you have a firm grasp of things, and will do well in life financially.

 

[bunsen82]

And from my viewpoint, both sides are equally dumb and irresponsible.

There are stupid people and stupid ideas on both sides however there seems to be a lot more on republican side. The problem with republicans currently is it is getting more of these crazy individuals on ballots and into congress or the Senate.

 

[onlyTheObvious]

Neither party pays for their spending. Tax cuts are spending.

I keep wondering when the interest on the debt gets to the point where it needs to be addressed.

 

[KFSuperStar]

If somehow the Fed is making adjustments perfectly that’d be great news.

From everything I’ve read economists agree it’s nearly impossible to be perfect in this situation. Unfortunately.

 

[joelbc1]

If somehow the Fed is making adjustments perfectly that’d be great news.

From everything I’ve read economists agree it’s nearly impossible to be perfect in this situation. Unfortunately.

Might be the smartest thing you ever posted, KF. Perfection in real life just does not exist. These guys at the Fed are a helluva lot smarter in finance and economics than most of us here on HROT are.

 

[seminole97]

Neither party pays for their spending. Tax cuts are spending.

Tax cuts are not spending.
Tax credits are spending.

I keep wondering when the interest on the debt gets to the point where it needs to be addressed.

In fiscal year 2020, at the height of covid stimulus mania, Congress managed to spend nearly twice what the federal government raised in taxes.
Yet in 2021, with Treasury debt piled sky high and spilling over $30 trillion, Congress was able to service this gargantuan obligation with interest payments of less than $400 billion. The total interest expense of $392 billion for the year represented only about 6 percent of the roughly $6.8 trillion in federal outlays.
...

If Treasury rates continue to rise, and rise precipitously, the effects on congressional budgeting will be immediate and severe. Even if we laughably assume total federal debt remains static at around $23.8 trillion (the publicly held portion of the $30 trillion), interest rates of merely 2 or 3 percent will cause interest expense to rise considerably. Average weighted rates of only 5 percent would cost taxpayers more than $1 trillion every year. Historically, average rates of 7 percent swell that number to more than $1.5 trillion. Rates of 10 percent—hardly unthinkable, given the Paul Volcker era of the late seventies and early eighties—would cause debt service to explode to over $2.3 trillion.

Interest on debt in the hands of the public at different interest rates (billions)

Total debt in the hands of the public	$23,874. 2
Interest rate	Interest expense
1%	$238.70
2%	$477.50
3%	$716.20
4%	$955.00
5%	$1,193.70
6%	$1,432.50
7%	$1,671.20
8%	$1,909.90
9%	$2,148.70
10%	$2,387.40

Again, even 5 percent average rates would cause debt service to become the single biggest annual expenditure for Congress—ahead of Social Security ($1.2 trillion), Medicare ($826 billion), and the Department of Defense ($704 billion). The starting point for budget makers every year would be an interest expense totaling nearly half of realistic tax revenue.

 

[Finance85]

I saw the term "unfunded tax cuts". That's really a poor choice of words because it assumes the government actually owns our money. The choice of words might not be great, but the concept is sound if we're on the wrong side of the Laffer Curve. The Trump tax cuts weren't effective for that reason. Current tax rates are low enough that's it unlikely that cutting income tax rates will increase income tax revenue.

The GDP report is good. It's going to take quite a few more quarters for GDP to catch up with the increased money supply, but every positive quarter is good, as long as we are looking at it net of inflation. Positive GDP is also the most efficient way to increase tax revenue, and is a way better method than increasing tax rates on the rich.

 

[Chishawk1425]

 

[ICWestfan]

How will we see a recession with still high demand for everything? Housing, healthcare, cars, labor. Demand is outstripping supply in all of these areas.

Housing demand is actually falling....
https://finance.yahoo.com/news/mortgage-rates-reach-20-high-132119490.html