The Recession Is Over. Right?

Well, not so much.

GDP came out this morning and there's only one word for it: Ugly.

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 1.0 percent in the second quarter of 2009, (that is, from the first quarter to the second), according to the "advance" estimate released by the Bureau of Economic Analysis.  In the first quarter, real GDP decreased 6.4 percent.

And while 1% drop doesn't sound all that bad, the problem is that virtually all of this change came from government spending.  Further, while the feds can continue to just print money and issue debt (as long as the Chinese let us, that is), the states have pretty much crapped-out - meaning there's one less spigot (or 50, actually) to be tapped going forward.

Read Denninger's column for the details - consumer spending in Q2 was down (up in Q1) as were both durable and non-durable goods (both were up in Q1).

Gold and sliver are spiking, the dollar is getting hammered, and yet equities appear to be taking the continued deterioration in the economy in stride.

So, are you willing to bet that the equities markets are right?  Or do you trust your own lying eyes?

Posted by: DocJ at 02:23 PM | No Comments | Add Comment
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