The economy, is it good or bad. (Page 1/181)
84fiero123 JUL 27, 10:05 AM
The economy, is it good or bad.
Are we headed into a recession?
I see on the one hand the stock market is taking a dive,

Stocks Plunge; Dow Down More Than 310


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Jul 26, 6:33 PM (ET)

By JOE BEL BRUNO

(AP) Trader Peter Tuchman rubs his head as he works or the floor of the New York Stock Exchange,...
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NEW YORK (AP) - Wall Street suffered one of its worst losses of 2007 Thursday, leading a global stock market plunge as investors succumbed to months of worry about the mortgage and corporate lending markets. The Dow Jones industrials closed down more than 310 points after earlier skidding nearly 450.
Investors who had been able for months to largely shrug off discomfort about subprime mortgage problems and a more difficult environment for corporate borrowing finally decided it was time to sell after the Commerce Department issued another disappointing home sales report.

http://apnews.excite.com/ar...70726/D8QKI33O0.html

The housing market is down the tubes.

Investor Losses Seen in Housing Slump


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Jul 26, 6:50 PM (ET)

By ALEX VEIGA

(AP) A home is offered for sale in Riverside, Calif. Monday, July 23 2007. Mortgage defaults in...
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LOS ANGELES (AP) - The national housing slump could lead to billions of dollars in losses for Wall Street investors as it drags on for at least another year and mortgage defaults increase, economists said Thursday.
The outlook on eroding credit quality in the U.S. mortgage market by Moody's Economy.com anticipates that more than 1.2 million first mortgage loans will default this year and another 1.3 million will follow next year.
That compares with about 900,000 defaults last year and about 800,000 in 2005, Mark Zandi, the Web site's chief economist, said in a conference call.
Hedge fund investors will lose between $100 billion and $125 billion as a result, he said.


"We do expect losses in the subprime market to be very severe," Zandi said

http://apnews.excite.com/ar...70726/D8QKIBC00.html

Yet the government says everything is doing great.

Economy Growth Is Best in a Year


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Jul 27, 9:14 AM (ET)

By JEANNINE AVERSA

(AP) A newly constructed home waits for an owner in Bainbridge Twp., Ohio on Thursday, July 26, 2007. ...
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WASHINGTON (AP) - The economy snapped out of a lethargic spell and grew at a 3.4 percent pace in the second quarter, the strongest showing in more than a year. A revival in business spending was a main force behind the energized performance.
The new reading on gross domestic product, released by the Commerce Department on Friday, marked a big improvement from the first three months of this year, when economic growth skidded to a near halt at just a 0.6 percent pace, the slowest in more than four years.

http://apnews.excite.com/ar...70727/D8QKV0500.html

What do you think?

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Toddster JUL 27, 12:07 PM
Are you asking for a political or economic opinion?

If you want a genuine assessment of the economy, you won't like what you hear. But I'll be happy to give it to you.
Formula88 JUL 27, 01:24 PM

quote
Originally posted by Toddster:

Are you asking for a political or economic opinion?

If you want a genuine assessment of the economy, you won't like what you hear. But I'll be happy to give it to you.



I'd be interested in your assessment of the economy, Todd.
From what I've seen, even with the DOW going up, things aren't looking good. The Dollar is going down, and so the DOW goes up because it costs more dollars for the same thing. But "value" or "worth" hasn't really increased. If you read the DOW as related to gold prices, it looks like we've been on a steady decline for a while. I'm surprised inflation is as low as it is, but that's being artificially supressed by interest rates.

You can make money in virtually any market if you know how to take advantage of the prevailing trends. Right now foreign investment seems to be the most stable - as evidenced by the strength of the British Pound and Euro.

What's your take?
Rainman JUL 27, 01:33 PM
Genuine asessment is that the economy is very strong. The strongest in quite some time. What makes folks uneasy is the instability they feel. We are in a phase where the eceonomy is very strong, but people don't feel secure financially (fear of job loss, etc), so they think the economy is tanking.
AP2k JUL 27, 03:05 PM

quote
Originally posted by Rainman:

Genuine asessment is that the economy is very strong. The strongest in quite some time. What makes folks uneasy is the instability they feel. We are in a phase where the eceonomy is very strong, but people don't feel secure financially (fear of job loss, etc), so they think the economy is tanking.



Not only that, average wages havent inflated with the economic growth. Go corporate America!
Toddster JUL 27, 04:51 PM

quote
Originally posted by Formula88:


I'd be interested in your assessment of the economy, Todd.



Firstly I want to give an honest assessment but I can't do that without a political observation or two so please read with that understanding in mind.

OK, it is fair to point out the fact that the US economy DOES have issues. No system is perfect and no system can't be improved upon. Clearly our National Debt is a National Disgrace. It should be reduced...NOT ELIMINATED (a little debt is actually a good thing) but reduced significantly. Our debt should be no more than $2 trillion dollars, it is currently around $10 T. Our budget should be balanced because when emergencies like war, hurricanes, earthquakes, etc. arise, we will not be prepared to deal with them if we are overextended.

I don't want to get into a micro analysis of unemplyment and other leading indicators for one main reason, many won't see the point and others won't care. Instead I want to discuss the US economy in the context of what it means to the world that we are in good shape:

The U.S. Economy's Output is 20% of the World's Total: Total output for the U.S. economy in 2006 was $12.98 trillion, one fifth of the world's total output. It is also the largest in the world, followed closely by the European Union (EU) at $12.82 trillion, China at $10 trillion and Japan at $4.2 trillion.
In fact, the GDP of most countries are the same as many U.S. states. To put these numbers in perspective, check out this map., which shows which country has the same GDP as each state.



The U.S. Economy Provides One of the Highest Standards of Living in the World: The power of the U.S. economy is seen in its GDP per capita, which was $43,500 in 2006. Although it is the second largest economy, the EU's GDP per capita was only $29,300, while Japan's was $33,100. China's GDP per capita was only $7,600 because they have four times the number of people as does the U.S. Think of the incredible economic power it takes to both be the largest economy in the world while producing one of the highest standards of living per person. While other countries, such as Norway and Bermuda, have higher GDP per capita, they aren't also a driver of the global economic engine that the U.S. is.

Another thing, a lot has been said about the DOW Averages but where else are investors going to go? The U.S. has a the world’s most sophisticated stock market and financial sector. The transparency of our stock market allows investors to gain up-to-date information about every aspect of companies in which they might invest. Wall Street attracts the most talented personnel and can afford the most powerful technology. This allows U.S. banks to control billions of dollars in transactions to take place anywhere in the world. It also enables these banks to provide any number of complicated derivatives to provide hedging against risk. This incredible competitive advantage supports a variety of complicated foreign exchange transactions at lower cost.

Now the MAIN issue to discuss in relation to the economy is demand. Good old demand drives EVERYTHING! All businesses try to understand or guide consumer demand, so they can be the first or the cheapest in delivering the right products and services. If something is in high demand, businesses make more. If they can’t make more fast enough, the price goes up. Demand can be measured by a country’s total production of goods and service minus its exports, which are demanded by other countries, plus its imports, which are the items it doesn’t make at home.

Measured this way, the U.S. economic demand is just over $13 trillion, which is just over 20% of the world’s total demand. The next largest country, China, has a demand of $8.7 trillion, while Japan's demand is nearly $4 trillion. America Has Been the World’s Best Customer. Right now countries need America because we are the largest importer, at $1.7 trillion, twice as large as Germany, the next largest importer, and three times as large as China, the world’s third largest importer. Because of this role, all countries have an interest in maintaining good relations with the U.S., and in keeping our economy healthy.

The key component of demand is consumer goods and services. Whereas the U.S. supplies all of its own services, it imports goods that can be made more efficiently overseas, such as industrial supplies, oil, telecommunication equipment, autos, clothing and furniture. It is often said that the U.S. has lost its competitive edge in producing these products, and has become a service-oriented economy. The key driver of demand growth is economic growth. Here’s how it works. As incomes rise, people are able to buy more. As people buy more, companies can make more, and then pay employees more. The ideal situation is healthy growth without inflation, which has been the situation in the U.S. for the last five years.

Since demand is dependent on personal income and wealth, a decline in wealth will lower demand. This is why I am so vehemently in favor of reduced corporate and personal taxes and I get angry when Democrats attack "the rich". Now I also understand why so many Americans FEEL worse off. The Federal Reserve reported that the median net worth per family rose only 1.5% from 2001 to 2004. Since net worth did not keep up with inflation during these years, the average household feels poorer. Although demand grew, it was financed by home equity loans. As a result, overall debt and debt servicing took a larger percent of family income. In fact, the number of late payments (60+ days) increased, especially among the bottom 80% of the income distribution.

As the housing market declines, this reliance on debt could result in a decline in U.S. demand. How do we fight this? Increase foreign demand. The Organization for Economic Cooperation and Development (OECD) predicted that China, India and Russia will grow strongly over the next six months, while the U.S., Japan, and Brazil will slow. The U.K. and the Euro area had mixed indicators, which portend moderate growth. Despite the OECD’s forecast, the Bank of Japan is predicting an upswing in economic growth throughout 2007. One of the drivers of this growth is expanding private consumption as a result of wage increases. In addition, the housing market is getting stronger. It's pure bullshit but that's the Japanese take on things not mine.

Many experts believe that Europe’s economic recovery is speeding up while America's is slowing down. They explain that Europe has built its strength on encouraging exports and domestic consumption, while that of the U.S. is built on debt financing. This is not something that can be sustained since banks have all but done away with 100% financing and new home sales will require more investor input. That means more savings! essentially, the banks made the cardinal sin of making it easy for us. Who wouldn't do 100% financing!? Afterall, you get the title and the bank gets the risk. Things get tough, walk away. The banking community has wised-up. They are FORCING Americans to save and that will turn the savings deficit around. When you combine this with the US workforce, one of the largest in the world and the single greatest producer per laborer in the world, our potential is staggering.

I think we are in a pre-election, long-war malaise right now and despite this our national production is at all time highs. Wait til after the election in 08 and see the afterburners kick in.
cliffw JUL 27, 05:34 PM
The economy? A few beers should not stop me from giving you my opinion, .
How much money is in your pocket? It sounds simplistic but it is not.

quote
Originally posted by Toddster:
Firstly I want to give an honest assessment but I can't do that without a political observation or two so please read with that understanding in mind.


Nor can I. No one can.

quote
Originally posted by Toddster:
Now the MAIN issue to discuss in relation to the economy is demand.


Well, I see Todd used CAPS. There is no demand without money. Tax cuts put more money in one's pocket.
I wonder ? How can the housing market always increase? Am I wrong, or is the housing market new houses only? The only way I can see the housing market always increase....is with more births. I am not always gonna buy a brand new vehicle. I only have once. I have seen the new housing market affect the economy. Why? My take....borrowed money. That phenomena where the people with money make money lending it to those without. To me, and I do not know crap, the flow of money makes the economy.
Here is where my political observation comes in. Taxes rob money holders of money. The Dumbocrats want to raise taxes and introduce new ones. To take from the rich and give to the poor. The Dumbocrats, (flame suit on), to keep power, need dependents. They want us to depend on them. They want bigger government. More control, Which is why they are in favor of amnesty for illegal aliens. They want the support (needed) of the poor people. They are easier to control. To bam boozle. The poor are less educated and will listen to a snake oil salesman and then buy snake oil.
I was that dumb. Probably still am. But I learned. How can Edwards get $400.00 hair cuts and be for the poor man. Sad fact. You can not know a person unless you have walked in their shoes. The Dumbocrats, they are playing to the people who bought into their hype. The Repulsivcans, they do the same thing. Except John McCain. He speaks his patriotic feelings.
In answer to the question, I don't know. . There are no riots in the streets.
Frizlefrak JUL 27, 05:53 PM
Ask someone who is doing well, they will tell you the economy is strong. Ask someone who is struggling, they will tell you it's in the crapper.

I had a couple of other witty answers backed up by statistics, but Toddster's post pretty much spells it all out. I've been all over the world, and while there are number of countries around the world that I truly love (Germany in particular), I'm always glad to get home. We live pretty damn well here, and I think sometimes we Americans take that fact for granted and don't always appreciate just how well we have it. Even the poor here live pretty well compared to a lot of the world.

[edit] Hey Cliff.....according that map above, we're Canadians LOL

[This message has been edited by Frizlefrak (edited 07-27-2007).]

madcurl JUL 27, 05:57 PM

quote
Originally posted by 84fiero123:

The economy, is it good or bad.
Are we headed into a recession?
I see on the one hand the stock market is taking a dive,

Stocks Plunge; Dow Down More Than 310

What do you think?





Hmm. My stocks are doing darn good. GOOG, AAPL. RIMM, LFC, ASIAN, AND MINERIALS markets. The Dow reaching into the lows is a good thing. Market corrections are good; buy on the lows, but with companies with good fundamentals.
84Bill JUL 27, 06:45 PM
Oh no.. the economy is fine... Just buy that new car, sofa and house and be sure to get long term loans... everything is fune... just fine..