“I’m a child of the bull market.”  - Barton Biggs
“We are all children of the bull market, but the bull market is over.”  - Bill Gross

Taking Stock of GDP (Part III)

Sunday, November 27, 2011

The US Commerce Department reports that the third quarter 2011 GDP grew 2.0%.

On September 1st, the Congressional Budget Office estimated 3.1%. 

The past four quarters stand at an average of 1.5%. The past 10 quarters stand at 2.1%, versus a post war average of 3.455%.

Some perspective: the past 10 quarters is essentially the rebound period after the deepest recession in post war history. That recession lasted six quarters, and averaged -3.4% per quarter. 

The average rebound from a recession is north of 5% in the first year, and north of 4% the next. The 10-quarter period just completed is feeble even with a normal, shallow recession as the backstop. But 2.1% growth per quarter in this context is scary. 

More persepctive: the past 40 quarters have averaged 1.6% growth. 

When someone says we're moving in the right...  Read the full article

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George Ford

George Ford. Marketing/advertising career, amateur investor, hostile toward conventional investment wisdom, optimistic about making money in the new market, offering here food for thought.

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