65 replies to this topic

[bushwacked]

http://www.bloomberg...hina-slows.html

Quote

The U.S. once again may be emerging as a main engine for global growth -- and at an opportune time, as Europe slides into recession and China’s economy decelerates.
An improving job market, rising stock prices and easier credit are combining to lift U.S. consumer confidence and spending, with optimism measured by the Bloomberg Comfort Index near a four-year high. Personal-consumption expenditures increased by the most in seven months in February, rising 0.8 percent, the Commerce Department said last week.
“We’re entering a sweet spot for the economy,” said Allen Sinai, president of Decision Economics Inc. in New York. “We’re in a self-reinforcing cycle,” where faster employment growth leads to higher household income and increased consumer spending.

[detlef]

How's that "hopey changey thing working out for you?"

[evil_gop_liars]

detlef, on 03 April 2012 - 05:36 PM, said:

How's that "hopey changey thing working out for you?"

Walnuts and Wasilla could of done better...

[Brentastic]

Someone please tell me how the other thread got gunned.

I'd like to see the detail that supports this vague and fact-less opening sentence:

Quote

The U.S. once again may be emerging as a main engine for global growth

They also managed to fit in the terms "easier credit" and "consumer spending" in one sentence and imply those are good things during a time when our country is broke and in major debt

Quote

An improving job market, rising stock prices and easier credit are combining to lift U.S. consumer confidence and spending

[bushwacked]

Brentastic, on 03 April 2012 - 10:22 PM, said:

Someone please tell me how the other thread got gunned.

The Ron Paul/Gary Johnson thread where everyone was discussing the subject matter when you came blazing in and called me stupid and what not?  Yea, I have no idea why that might have gotten gunned.  

[Brentastic]

bushwacked, on 03 April 2012 - 10:51 PM, said:

The Ron Paul/Gary Johnson thread where everyone was discussing the subject matter when you came blazing in and called me stupid and what not?  Yea, I have no idea why that might have gotten gunned.  

Hyperbole much?
It won't be long now.

[LordOpie]

With all the money the fed is printing to buy back loans, when will we feel he effects of inflation? Will that terminate this temporary sweet spot?

[CaP'N GRuNGe]

Brentastic, on 03 April 2012 - 10:22 PM, said:

Someone please tell me how the other thread got gunned.

I'd like to see the detail that supports this vague and fact-less opening sentence:


They also managed to fit in the terms "easier credit" and "consumer spending" in one sentence and imply those are good things during a time when our country is broke and in major debt

Ummm....isnt it economics 101 that we live in a consumer society where the consumer drives economic growth? Youd rather everyone horde their pennies and drive down gdp and drive up unemployment?

[SEC=UGA]

bushwacked, on 03 April 2012 - 10:51 PM, said:

The Ron Paul/Gary Johnson thread where everyone was discussing the subject matter when you came blazing in and called me stupid and what not?  Yea, I have no idea why that might have gotten gunned.  

Stupid wiener head

[i_am_the_swammi]

We are all going to be rich when we can sell off pieces of the sky after it falls. The lunatic fringe told me it was going to happen. You know, the same ones that said our stock market was going to tank with BO at the helm.

Oh wait, never mind.....

http://www.cleveland...percent_si.html

[SEC=UGA]

Doodie head.

[The Irish Doggy]

Brentastic, on 03 April 2012 - 10:22 PM, said:

I'd like to see the detail that supports this vague and fact-less opening sentence:


They also managed to fit in the terms "easier credit" and "consumer spending" in one sentence and imply those are good things during a time when our country is broke and in major debt

Well, consumer debt and federal debt are not the same thing.  Apples and oranges there.

Anyway, in general, one reason the recession persisted was the general lack of credit availability.  People can't buy cars and homes if they can't get a loan.  The credit pendulum swung too far towards the conservative side once all the fall out from CDOs hit.  In the early 2000s, every high-risk applicant could get a loan and there were few checks in place.  Then it went to arguably too many checks and only the most qualified, low-risk, applicants  got a loan.  I think the article is arguing that we are headed back towards a middle ground which is where it should have been to begin with.

[SEC=UGA]

Ding dong poopie breath.

[Brentastic]

CaP, on 03 April 2012 - 11:27 PM, said:

Ummm....isnt it economics 101 that we live in a consumer society where the consumer drives economic growth? Youd rather everyone horde their pennies and drive down gdp and drive up unemployment?

I've said it a bunch of times: excessive consumer spending is the result of a healthy economy, not the driver.  Just because certain policy makers and Fed bankers want you to believe that excessive consumer spending (spending more than your needs) is necessary to drive our economy doesn't mean that is actually the case. The Fed wants consumers to borrow and spend because that's how they get richer.

[bpwallace49]

It wont be long now

[Brentastic]

The Irish Doggy, on 04 April 2012 - 08:10 AM, said:

Well, consumer debt and federal debt are not the same thing.  Apples and oranges there.

Anyway, in general, one reason the recession persisted was the general lack of credit availability.  People can't buy cars and homes if they can't get a loan.  The credit pendulum swung too far towards the conservative side once all the fall out from CDOs hit.  In the early 2000s, every high-risk applicant could get a loan and there were few checks in place.  Then it went to arguably too many checks and only the most qualified, low-risk, applicants  got a loan.  I think the article is arguing that we are headed back towards a middle ground which is where it should have been to begin with.

A fish rots from the head.  Governments worldwide are heading toward mass defaults and it has already started with Greece.  Other governments will follow and the citizens of said countries (including America) will also start to default on a mass scale once local governments start defaulting on their commitments (like pensions, college funds etc...).  American citizens are broke too because we have adopted the spending habits of our upper management (government).  The recession was not prolonged because people were unable to get loans - easy credit is what got us into this mess to begin with and reverting back to that will not get help our economy, it will only delay the inevitable.  The Fed wants rates to stay low because it encourages more borrowing and spending, even though most consumers now realize that saving is the smart thing to do now.

Strategic defaults is still a new strategy and I believe once our local governments start to default on payments due, the citizens will collectively throw up their middle fingers.  I was just talking to a co-worker who is considering a strategic default on her condo because the current foreclosures in her building are now selling for $40K while she still owes $200K on hers.  She has the cash saved to buy a foreclosed condo outright.  I actually think this strategy makes sense, especially if you don't care about your credit and you buy everything with cash.

It bothers me that so many people are still buying into a spending philosophy and still believe spit they read in the WSJ and other major media outlets.  Don't read what economists are saying because their model is wrong.  Economics is not a proven science by any means and there are other economic philosophies that make better sense.  When you hear the same thing from the Fed (consumers need to borrow and spend) you need to ask yourself who benefits from it.  Bottom line: consumers shouldn't be required to spend outside of their means in order to sustain a healthy economy.  The fact that bankers keep putting the pressure on consumers to spend more in order to make their model work is ridiculous.

[Savage Beatings]

So let's see, the global economy is going to CHIPS AHOY!, but the U.S. economy is going to CHIPS AHOY! relatively less than the rest of the world... which means we win?  

[SEC=UGA]

Dum dums.

[wiegie]

LordOpie, on 03 April 2012 - 11:24 PM, said:

With all the money the fed is printing to buy back loans, when will we feel he effects of inflation? Will that terminate this temporary sweet spot?

The Fed has indeed dramatically increased the monetary base, but the overall money supply has not really gone off of its long-run trend.  This is because the money supply = the monetary base * the money multiplier  --  and the money multiplier dramatically decreased due to the financial crisis (as banks reduced their lending).  Once the financial system starts to get back on track, the multiplier will start to go up, which would lead to the money supply going up (which would then cause inflation to increase), but it is most likely that as the multiplier increases, the Fed will shrink the monetary base so that the overall money supply stays reasonably on trend and we don't get high inflation. (In fact, the quite low interest rates on long-term loans indicates that this is exactly what the financial markets are predicting is going to happen.)

CaP, on 03 April 2012 - 11:27 PM, said:

Ummm....isnt it economics 101 that we live in a consumer society where the consumer drives economic growth? Youd rather everyone horde their pennies and drive down gdp and drive up unemployment?

Consumer spending does affect the economy in the short run, but long-run economic growth is associated more with investment in capital goods than it is with consumer spending.  (Although there are a lot of interaction and feedback effects in these relationships which aren't really worth going into right now.)  [I will readily admit, though, that fluctuations in consumer spending can definitely affect the economy in the short-run.]


And as for the overall theme that the economy has hit a sweet-spot, I'm not nearly so optimistic.  Yes, things look to be on the right track, but there is no way that I would say that we are out of the woods.

[SEC=UGA]

Tenured Professor.

[Brentastic]

SEC=UGA, on 04 April 2012 - 09:55 AM, said:

Man of the establishment

Fixed.

[bushwacked]

* Private sector adds 209,000 jobs in March
* Report does not change expectations for nonfarm payrolls
http://www.reuters.c...E8F41A620120404

Quote

(Reuters) - U.S. businesses added 209,000 jobs in March, suggesting the recent improvement in the labor market continuing, a report by a payrolls processor showed on Wednesday.
The ADP National Employment Report was slightly above economists' expectations for a gain of 200,000 jobs. Analysts said it did not change their forecasts for the government's more comprehensive labor market report due on Friday, which includes both public and private sector employment.
Job gains for January and February were also revised up to 182,000 and 230,000, respectively. The report is jointly developed with Macroeconomic Advisers LLC.
"My conclusion is the employment growth trend that we've seen over the last year remains in place and we probably will see a decent employment number on Friday when the Department of Labor reports non-farm payrolls," said Fred Dickson, chief market strategist at D.A. Davidson & Co in Lake Oswego, Oregon.

It won't be long now.

[SEC=UGA]

Brentastic, on 04 April 2012 - 10:25 AM, said:

Fixed.

Oh, most enlightened and humble one, if only I could have the veil of ignorance placed over my eyes by the house of Rothschild, Rockefeller, DuPont, Koch, Astor...  lifted and cast aside, maybe then I would be more adequately equipped to see the tyranny and dower circumstances imposed upon us all by the omnipresent and omnipotent elites.

How, sir, do I unshackle myself from my ignorance, how do I escape the bonds of the establishment?  Do I provide myself with sustenance through my own toil, pulling myself off of the grid, bartering seed for petrol, and petrol for brick and mortar?  Do I grow my own herbal remedies and while in a state of stark nakedness adorn myself with flowers while crooning revolutionary ballads?  Or, do I immerse myself into the system that I seek to change, reaping the meager benefits of a rigged system so that I might purchase the amenities of comfort from large multinationals and then employ their devious mechanisms to broadcast my frustrations over their bandwidth in order to admonish all of the "men of the establishment" about their transgressions against humanity?

Peace

Edited by SEC=UGA, 04 April 2012 - 10:45 AM.

[LordOpie]

wiegie, on 04 April 2012 - 09:51 AM, said:

...the Fed will shrink the monetary base so that the overall money supply stays reasonably on trend and we don't get high inflation.

do you think they really will or will they keep the money in the system so they can "show" a "healthy" and "growing" economy?

[wiegie]

LordOpie, on 04 April 2012 - 11:39 AM, said:

do you think they really will or will they keep the money in the system so they can "show" a "healthy" and "growing" economy?

yes, Bernanke will shrink the monetary base once there are signs that inflation is setting in----as I indicated before, this does not mean that he will decrease the money supply, rather he will try to keep the money supply growing on trend