8.2% growth in US GDP last quarter.....

[paulcs]

Originally posted by Jammrock
1) I have never stopped training.
2) What economically hot city?

Jammrock

McDonaldland

Forget it. You're overqualified.

Paul

[borat]

that rate of growth over 3 quaters is amazing, here in britain we are supposed to be overjoyed if we make 2% over the entire year. Then again the reason for this is that we are total unambitious as a nation and our governments discourage us from initiating new buisiness ventures in favour of working for foreign multinationals who set up in our country, guess we'll always be trailing to the USA untill that is addressed.

[Brian Ellis]

However, you will notice that a) the dollar has dropped to an all-time low and b) the DJ and Nasdaq have not reflected any major change, because of this "news".

Both these factors show that the analysts and economists are not exactly enthusiastic. If the US economy were that buoyant, where are the currency and stock investments?

[borat]

im no speculator, but maybe there a little worried that they could overcook it like happened a few years ago when the tech stocks crashed, im sure they have climbed steadily since then and maybe the current market prices are the fair value. there must be a lot of investors in the states who got their fingers burnt and as such are a little sceptical about putting their money into stocks today.

[Technoid]

The stock market is potentially the MOST dangerous threat against a nations economy

[UtwigMU]

The reasons for cautiousness (I just read an article on the subject) is:

The USA has set margins for growth of imports of certain Chinese cloth.

Some economists/players/stocmarkets view this as a prelude to trade wars.

As you know the trade wars were one of reasons of 1929 stock market crash.

China is viewed as the market that is becoming more important lately and growth there is helping World's economy. If there's a trade war between USA and China, it will not be beneficial to growth.

The trade skirmishes between EU and USA are also on the horizon: Hormone fed beef, steel, bananas and the WTO agreements are being violated.

The recent rift between Bush and majority of EU over Iraq is also not helping and brings politics into economics (EU economic measures that would most hurt Bush reelection are mentioned).

(This are some of the reasons for Dollar being at all time low against gold and other currencies.)

[borat]

cheers for that utwig, so its just speculator cautiousness thats keeping the currency and stock market weak then. in that case it'll iron itself out given a bit of time.

[Dr Mordrid]

Originally posted by Brian Ellis
However, you will notice that a) the dollar has dropped to an all-time low and b) the DJ and Nasdaq have not reflected any major change, because of this "news".

Both these factors show that the analysts and economists are not exactly enthusiastic. If the US economy were that buoyant, where are the currency and stock investments?

1. The low dollar is an intentional policy being pursued by the Federal Reserve Bank. It helps our exports and thereby reduces inventories; both of which are good for a companies bottom line.

Higher exports are good for obvious reasons while reduced inventories are good because if they're retained until April 15th they get taxed. This is why there are so many deep-discount retail sales in the US in the first quarter. Both tend to help with job creation.

A low dollar also helps foreign investors buy US stocks, which tends to help the markets in general.

2. That the markets aren't reacting to every event, good or bad, is actually good news in terms of stability. It means that individuals, retirement plans and funds are investing for the mid-to-long term and not depending on short-term trading for their gains.

Dependence on short-term trading, such as was seen with the irrational gains of many IPO's & some mutual funds, is largely what got us in trouble during the days of the Clinton bubble.

You also have to look at the level of stock valuation, meaning their price-earnings ratio. During the Clinton bubble these got way out of control and drove stock prices far higher than what would be normally be expected for the PE of most companies individually and the market in general.

3 (mine). In terms of retail sales, a major indicator, they look to be up 5-7% for the Christmas season which is also major good news. Walmart alone registered $1.5 BILLION in sales for just the day after Thanksgiving; aka Black Friday because it's often when retailers go "into the black" for the year.

Black Friday is the traditional first day of the Christmas retail season and this year the malls were crowded as sardine cans. Also interesting is that internet sales are expected to be up 20% or more.

The Consumer Confidence Index is also up along with almost every other predictive indicator including job creation. Those that aren't up are trailing indicators who don't show improvement until 6 months into a recovery anyhow.

Also:

Factory Growth Fastest in 20 Years

http://story.news.yahoo.com/news?tmpl=story&cid=1519&ncid=749&e=6&u=/afp/20031201/bs_afp/us_economy_ism

Dr. Mordrid

[cjolley]

http://www.usnews.com/usnews/issue/031208/opinion/8edit.htm

chuck

[Dr Mordrid]

Gergan is a Clintonista, so pardon me if I don't take his musings as the Gospel.

That said one of his major points, the steel tariff's, are likely to be recinded soon.

As for the deficits: most were unavoidable due to the war and even large ones, with some control on spending growth in the out years, should be whittled away as the economy grows.

Let's also not forget that while the current deficits are large numerically they are actually smaller than previous deficits as a percentage of now much, much larger GNP, which is growing at a very high rate. Their percentage of GNP is how deficits should be compared....not by their absolute value.

Example: when you bought a new house for $30,000 in 1975 you thought it was a huge amount of money. Let's say you put that house on a 30 year note that you would still be paying on. That same $30,000 loan today would be nothing compared to the $200,000 many people spend on four walls today. In point of fact instead of a house all it would buy you is a car and you'd only be able to get a 5 year note.

Why did that $30,000 shrink in real value and become less of a burden than it looked to be in 1975? Partly because of inflation, partly because of income growth and partly because of GNP growth....same as the loans the government is taking out now.

Dr. Mordrid

[cjolley]

Originally posted by Dr Mordrid
Gergan is a Clintonista, so pardon me if I don't take his musings as the Gospel.

That said one of his major points, the steel tariff's, were recinded today.

Gospel? Just something to think about.

As of 3:45 PM CST I can find no citation that the tariff has actualy been recinded.
While the financial whizzes want it gone, that move has to pass the political whizzes who actualy run things for Bush.

What control on spending? In case you havent noticed, the totaly Republican Government is spending money at a rate no Democratic Goverment or combination ever dreamed of.

Growing at a very high rate for the last 15 minutes or so.
Let's pray it keeps up.

It doesn't matter what the percent of GDP the deficit is if the debt never goes down.
The current projections for actual balance are way off in the future.
Eventualy we will reach a point where service on the debt will crush the economy no matter how small the deficit is.

Would you run your finances the way this countries are being run?
chuck

[Brian R.]

Don't listen to a Clintonista, listen to a Bushista. Much better...

[Wombat]

As for the deficits: most were unavoidable due to the war and even large ones, with some control on spending growth in the out years, should be whittled away as the economy grows.

When did the war become "unavoidable?"


Still, a good piece on Bush spending: http://abcnews.go.com/sections/wnt/P...ent030922.html

[Dr Mordrid]

War there became necessary to keep the battlefield there instead of here. Works for me.

Would you better have the conflict in Chicago, NYC or LA? That's where they had been heading ever since the first WTC bombing and the Oalkahoma City bombing.

The first WTC attack was an early AQ operation with Iraqi connections by way of Yamzi Yusef, who was a member of the Iraqi secret service and maternal nephew of Khalid Shaikh Mohammed (he of the unshaven mug shot captured in Pakistan).

The Oaklahoma City bombing was connected to AQ and the Phillipine Abu Sayef cell through Terry Nichols, who visited Abu Sayef agents in the Phillipines (his wifes homeland, but he travelled alone to these meetings).

Dr. Mordrid

[cjolley]

http://www.washingtonmonthly.com/features/2003/0312.bergen.html

chuck