Welcome to the Recovery...a collection of Timmy Geithner's favorite Folktales

After consuming mass quantities of Timmy's home brewed Kool-aid, he penned an op-ed  folktale piece in the New York Times. Yes, Timmy lives in his own special world talking to his imaginary friends while perusing his imaginary economic reports.

Welcome to the Recovery

A collection of folktales

The devastation wrought by the great recession is still all too real for millions of Americans who lost their jobs, businesses and homes. The scars of the crisis are fresh, and every new economic report brings another wave of anxiety. That uncertainty is understandable, but a review of recent data on the American economy shows that we are on a path back to growth.

The recession that began in late 2007 was extraordinarily severe, but the actions we took at its height to stimulate the economy helped arrest the freefall, preventing an even deeper collapse and putting the economy on the road to recovery.

From the start, President Obama made clear that recovery from a crisis of this magnitude would not come quickly and that the recovery would not follow a straight line. We saw that this past spring, when the European fiscal crisis posed a serious challenge to the markets and to business confidence, dampening investment and the rate of growth here.

While the economy has a long way to go before reaching its full potential, last week’s data on economic growth show that large parts of the private sector continue to strengthen. Business investment and consumption — the two keys to private demand — are getting stronger, better than last year and better than last quarter. Uncertainty is still inhibiting investment, but business capital spending increased at a solid annual rate of about 17 percent.

Together, private consumption and fixed investment contributed about 3.25 percent to growth. Even the surge in imports, which lowered the rate of increase of G.D.P., actually reflects healthy and growing American demand.

The economic rescue package that President Obama put in place was essential to turning the economy around. The combined effect of government actions taken over the past two years — the stimulus package, the stress tests and recapitalization of the banks, the restructuring of the American car industry and the many steps taken by the Federal Reserve — were extremely effective in stopping the freefall and restarting the economy.

We suffered a terrible blow, but we are coming back. Link to Geithner's Folk Tales

Updated Economic Data reported post Folk Tales Publication

Pending Home Sales June 2010 (National Association of Realtors)

The Pending Home Sales Index,* a forward-looking indicator, declined 2.6 percent to 75.7 based on contracts signed in June from an upwardly revised level of 77.7 in May, and is 18.6 percent below June 2009 when it was 93.0. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.

Factory Orders (June 2010)

Factory orders for the month of June were DOWN 1.2% versus a consensus estimate of down 0.5%. May was revised (of course) to DOWN 1.8% from the initial government guesstimate of DOWN 1.4%. April was also revised (government required 3 months to check their math) to UP 1.0% versus the initial report of UP 1.2%.

Sampling of Other Popular Geithner Folktales and Fables