Are We Heading Into A Recession?

Remember back when the 2022 1st and 2nd quarter GDP numbers came in... and those politically motivated types screamed "we are in a recession!"

We are about to undergo another episode of such nonsense, but from the opposite side of the political spectrum.

Hearkening back to that previous period of 2021/22, there were multiple factors that caused the inflation to accelerate into that annual high of 9.2% in June 2022. One of those factors was front loading of imports ahead of an impending West Coast port strike... planned for July 1, 2022. It didn't happen, but that front loading caused the trade deficit to balloon in the first 2 quarters of 2022.

Trade deficits are a drag on GDP. Interestingly enough, the adjustment from 2012 to 2017 dollars, resulted in significant revisions in those first 2 quarter of 2022. Subsequent revisions how has that 1st quarter of 2022 now at -1.0 from original -1.4 and the 2nd quarter now at +0.3, from the original -0.9.

On any given month, the trade deficit subracts about -4.3% from the GDP. During the 1st 2 quarters of 2020, the drag increased -5.2%. Hence the original 1st quarter would have been -0.5% revised to -0.1% and the 2nd quarter would have been flat, to a revised +1.2%. 

All of this to forewarn us the trade deficit has ballooned again. The February report... 

Yes, that is December and the reasoning is front loading to get ahead of possible tariffs. If that is true, which is likely, the January and February numbers could be even higher. 

Now much is made of that Atlanta FED forecast as now being -1.5% for 1st quarter GDP. The sky is falling, but what did the report actually say?

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2025 is -1.5 percent on February 28, down from 2.3 percent on February 19. After recent releases from the US Bureau of Economic Analysis and the US Census Bureau, the nowcast of the contribution of net exports to first-quarter real GDP growth fell from -0.41 percentage points to -3.70 percentage points while the nowcast of first-quarter real personal consumption expenditures growth fell from 2.3 percent to 1.3 percent.

That's a -3.29% additional drag, due to extremely high imports. Without this, the GDP forecast would be about +2.2%.

All signs point to the next trade report, which is for January... could be even higher. That release is Thursday, March the 6th.

That Advance 2025 1st Quarter GDP will be released on April 30th.

I would think the data does not suggest we are heading into a recession, however... given the fickle nature of the American consumer and the extraordinary media bias, we will get one, whether we like it or not. 

The Press has a dilemma.

Apparently, some of the left of center media people are noting that Trump tells what he thinks when answering their question.

The press is so used to the evasive non answers, that Trump speaking freely and off the cuff has them concerned.

Previously, the press were responsible for interpreting what the politician's doublespeak meant. Usually by citing some anonymous "source" while spouting endlessly on air. Which begs the question... are those sources real and/or are they honest.

Think about it, the news media has a much reduced role, or even need... in this environment. 

Those flashy press jobs don't look as important as those flashy media types have projected.  

I Voted, But My Rationale Was Probably Different Than Yours

I have long considered the likelihood of media manipulation of the 2016 election. I don't think there was vote fraud, or at least to the extent to alter the election results for 2016 or 2020. I should explain myself. 

I was somewhat puzzled in early 2016, when the center left of the mainstream media, really amped up the noise around a Trump campaign. Afterall, it was a "joke" campaign. However, that "joke" campaign started to erode the legitimacy of more convention Republican candidates, which would be of benefit to those same center left media companies, specifically those... well left of center organizations.

This managed to propel Trump into the republican nomination, which was certain to end in defeat to Clinton. They were so certain of a Clinton victory, it was deemed necessary to show some "balance" by promoting news, that was harmful to Clinton. This was all okay, as Clinton could not conceivably lose.

Yep, there were some shocked people in those newsrooms. It was important to rectify their mistakes by immediately pointing fingers at everyone else. That continued through the 2020 campaign, and finally Trump was ousted. Not by much, as a few thousand votes in certain states could have given Trump victory, just like a swing of a few thousand votes in 2016, would have given Clinton victory.

It is very clear that Trump was a drag on what should have been a victory dance in 2022, for the republicans. The democrats need Trump running loose, to be able to win in 2024. If you cannot see this trap, then you are blind. Basically, Trump needs to sit down and hush, for the republicans to have a shot in 2024.

The democrats need Trump to be front and center, for them to feel good about 2024. That's why I voted to keep Trump banned on twitter. 

Every time Trump tweets, the lamestream media will pounce on it, rebroadcast it, make political hay of it... just to keep Trump in the minds of voters, even ones that are trying to forget him.

Then there is the curious case of Biden. Democrats do not need Biden in 2024. That he was the best the democrats could do in 2020, is a testament to their horrid track record of developing worthwhile candidates. Lest we forget... the republicans gave us Trump. We have to be nearing rock bottom for choices to be between Biden and Trump.

It is time to turn it over to younger people of both parties. Let's start with... say less than 75!!!😎

Can It Be True??

The world is falling apart...

Or is it simply misdirection by the Media? Think back a few years BT (Before Trump) and it seemed that chaos ruled the day. Then the chaotic Trump became the focus of the day. He has mostly left the stage.

Now every global distraction makes headlines and the right claims it is misdirection to prevent focus on Biden. There may or may not be truth to any of this... that is contingent on a political point of view. If the media is trying to distract from Biden, they are sure doing a p$$$ poor job. He is the President and the buck stops there.

Iran, Syria, Afghanistan, Iraq, North Korea, Russia, Venezuela and China existed BT. China makes the news more than it did BT. Afghanistan is being scrubbed from the news. Iraq coverage is nearly non-existent. Russia is about the same as BT, as is Venezuela, North Korea and Iran. Syria popped up today and I had forgotten about it.

About the only thing I can say is... Trump provided comic relief from the ills of the world. Somehow that doesn't seem right.

Mortgage Rates...

Seems to be going higher and might impact the housing market. This is due to the possibility of the FED reducing purchases of mortgage backed securities. If interest rates were seen to be rising, the push will be on to finance before rates go up further, imo. 

That was once considered the rule. Buy something in today's dollars and pay it off when the future dollar is cheaper... relative to inflation.

Rationing Healthcare...

Apparently, due to being overwhelmed with covid, Alaska has implemented rules where Hospitals can now ration healthcare. Insurance companies had been doing that since... oh the beginning of health insurance. That is probably not a popular statement, but you know it is true.

It isn't an election year.

I ran across this on the AP Website... AP: States and cities slow to spend federal pandemic money. 

All manner of high sounding reasons were given for the limited usage of the pandemic money. They want to be sure it is spent wisely, it would be frivolous to just throw it out there, etc. 

I'm sure it will be sorted out and spent before the run up to the next election. People would forget about it, if it were spent now. But imagine the photo opportunities for politicians seen cutting ribbons or handing out really giant checks during the election campaign. Free publicity is the best publicity, imo.

Think I am being cynical? Doesn't mean I am wrong.