Wednesday, April 29, 2009

BARACK OBAMA

100th Day, 2nd Terrible Economic Indicator

Wow. I thought I had been properly bearish about the state of the economy, but this morning brings not one but two surprisingly grim indicators. Two weeks ago, I wrote, "The first-quarter GDP number is expected to show a loss around 6 percent, which was the revised number for what was lost in 2008’s fourth quarter. Of course, judging by the unemployment numbers, etc., it’s not unthinkable that the three most recent months were worse than the three preceding ones; watch the revision later this year." On the radio this morning, before the quarterly numbers came out, I heard that economists were expecting it to be not quite so bad, maybe 5 percent or even as little as 4 percent.

Well, it was 6.1 percent. Obama and his supporters will argue that there was no way he was going to turn around the economy in the first quarter of this year, but it suggests that it will be quite difficult to meet the 1.2 percent annual GDP decline his budget projects. Barring a sudden economic surge, at the end of the year tax revenues will be lower, and the deficit will be higher, than he projected.

Then, the early word was that every bank was going to pass the stress tests. I had noticed earlier that current economic conditions were starting to approach the stress tests' worst-case scenario. Well, over in the Corner, Spruiell shares the grim news that six banks failed their stress tests.

The banks are still in danger, six months after TARP, and the stimulus has yet to stimulate. But hey, the president has a new puppy.

04/29 09:11 AMShare