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Strategies & Market Trends : Zeev's Turnips - No Politics
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To: Crimson Ghost who wrote (39561)3/10/2002 5:23:27 PM
From: Steve Lee  Read Replies (1) of 99280
 
I think the economic malaise probably has bottomed, but the recession has hardly begun. That is because the consumer has a much greater impact on GDP than industry does.

Look what happened to semis and manufacturing over the past 18 mths. Double digit declines. Yet GDP growth remained positive because industry doesn't effect GDP much.

But the same process will work against GDP from this point. If the consumer retrenches, even if industry picks up with double digit growth, then look out below for GDP.

What we need now, is an adjustment to GDP calculations that give industrial growth a greater weight than consumer growth. That way GDP might continue to grow, until next time industry takes a hit - at which point we can revert back to current GDP calculation methodology. The stock holding public will be none the wiser and everyone can enjoy the new economy for a while longer.
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