Economy posts surprising growth

Discussion in 'Politics & Current Events' started by Matt in the Hat, Jan 31, 2007.

  1. MattR

    MattR Member+

    Jun 14, 2003
    Reston
    Club:
    DC United
    Nat'l Team:
    United States
    And Thursday...?
     
  2. LiverpoolFanatic

    Liverpool FC, Philadelphia Union
    Feb 19, 2000
    Lancaster, PA
    Club:
    Liverpool FC
    Nat'l Team:
    United States
    I wonder what these folks think of the "great economy?"

    http://www.zmag.org/content/showarticle.cfm?SectionID=72&ItemID=12201

    The percentage of poor Americans who are living in severe
    poverty has reached a 32-year high, millions of working Americans are
    falling closer to the poverty line and the gulf between the nation's
    "haves" and "have-nots" continues to widen.

    and

    The share of poor Americans in deep poverty has climbed slowly but steadily
    over the last three decades. But since 2000, the number of severely poor has grown "more than any other segment of the population," according to a recent study in the American Journal of Preventive Medicine.
     
  3. Matt in the Hat

    Matt in the Hat Moderator
    Staff Member

    Sep 21, 2002
    Brooklyn
    Club:
    New York Red Bulls
    Nat'l Team:
    United States
    And Thursday at 12:30?
     
  4. Txtriathlete

    Txtriathlete Member

    Aug 6, 2004
    The American Empire
    How is China breaking new territory in stock history for that country, followed by a weakness in the dollar and the wrong assumption in the the housing bubble theory considered wacky?
     
  5. Wingtips1

    Wingtips1 Member+

    May 3, 2004
    02116
    Club:
    Liverpool FC
    China's fall was due in part to fears of their gov't over stepping boundaries as they try to rid themselves of illegal activities. everybody else just followed lock stop as a correction was due for some time.
    one day drop does not signal a recession. giong by that logic, we'd be seeing 9% US GDP growth since we hit 27 record highs in 93 days (or whatever it was).
     
  6. ratdog

    ratdog Member+

    Mar 22, 2004
    In the doghouse
    Club:
    Chicago Red Stars
    Nat'l Team:
    United States
    Just like you typically ignore everything I wrote about how the weather artificially boosted home sales of all varieties, including this from my post above from the NAHB's own chief economist:

    "I sort of always knew that late last year our numbers were boosted by unusually warm weather and we paid some of that back in January," said Seiders (chief economist for the National Association of Home Builders).

    That doesn't just affect new homes, unless you can show that the weather on a given block is affected by whether the majority of homes for sale there are existing or new. Also, new home sales are a better barometer of how the housing market will affect the overall economy because it employs more people (at least it used to, anyway) than the existing home market.

    Let's take another look at the NAR data. If you look at the raw number of existing homes sold rather than the annualized adjusted rate for the U.S., you see this for the past six months:

    Aug. - 653,000
    Sep. - 529,000
    Oct. - 518,000
    Nov. - 472,000
    Dec. - 469,000
    Jan. - 363,000

    Ah, you say, but that could just be due to the fact that it's winter and people don't buy as many homes in winter. OK, fair enough, let's look at last January. The figure for Jan '06 was 373,000 which means the YOY for the raw data was -2.7%. The YOY for the adjusted annual figure is even worse, clocking in at -4.3%.

    Meanwhile, according to NAR, the national inventory of unsold existing homes remained the same at 6.6 months. And, of course, the national existing home price figure was down 3.1% from December. Given all the incentives and bonuses that desperate sellers are resorting to to unload their houses, the real "price" is certainly lower than the NAR figures.

    I'll give you a free tip on economic forecasting: since you almost never get ALL indicators (not even ALL leading indicators) pointing the same way, when eight leading indicators point one way and only two point the other way then it is almost always best to go with the eight and not the two. Right now most of the indicators within and outside the housing market still point to continued weakness there.
     
  7. ratdog

    ratdog Member+

    Mar 22, 2004
    In the doghouse
    Club:
    Chicago Red Stars
    Nat'l Team:
    United States
    I wouldn't put too much into the latest market moves unless and until a solid string of trading results establish that the market has really repriced risk going forward.

    One reason I'm not getting all worked up over the latest gyrations yet is that the current market is being driven by more factors than just a consensus on the future of the economy. Companies are still sitting on mounds of cash that they can't find profitalbe uses for in the productive economy. Therefore, they're buying back their own shares which helps their short-term financial reporting in various ways. Many firms are borrowing to buy their shares (hence the term "leveraged buy-outs" - or in this case, "buy backs") and they're either issuing short-term debt or otherwise betting that they can just refi at a lower rate later because everyone expects Bernanke to lower rates sometime next year. The sell-off this week will simply give the LBO boys plenty more chances to operate which should help stock prices.
     
  8. Wingtips1

    Wingtips1 Member+

    May 3, 2004
    02116
    Club:
    Liverpool FC
    I love how you keep trying to pick a fight.
    Yes, we are in the middle of a housing slow down. Yes, we are seeing less sales YOY. Does it mean the end of the world? NO!! we are seeing a return to 'normal' levels.
     
  9. ratdog

    ratdog Member+

    Mar 22, 2004
    In the doghouse
    Club:
    Chicago Red Stars
    Nat'l Team:
    United States
    I love how you don't address any of the content of my posts.

    Whatever. As long as you keep being indefensibly wrong, I'll keep "picking a fight". That's how I roll.

    It's a good thing I never said it was "the end of the world". It is what it is: a completely normal and predictable response to rising interest rates. We're not exactly in uncharted waters here so I don't exactly have to go out on a ny limbs with my descriptions of what's happening. It's the triumphalists, in contrast, who have to go against mainstream economic thought to try to sell people the false idea that everything is perfectly panglossean.

    You're wrong. Unless by "normal" you mean "the normal slowdown that is a completely normal and predictable response to rising interest rates". In that case, you're right.

    And remember, we've seen a weak housing market just when the economy was as good as it was going to get for a while. The future effects of the rate hikes haven't even gotten to the other sectors of the economy yet. Unemployment is predictably trending upwards, mortgage defaults are predictably spreading from the subprime market into the Alt-A market, etc.

    Even the much-ballyhooed "wages" figures recently had to be read more carefully than what the media portrayed. While the "YOY average weekly earnings" figure was up in January, the real average weekly earnings figure which had popped up in Sep and Oct of last year has struggled since then and actually fell in January and that despite being skewed to the upside by executive stock option and bonuses. After years of falling behind, wage increases are letting consumers barely keep up with inflation. That's a long-overdue improvement, of course, but not really much to get all excited about.

    If it's any consolation to you, I do think the majority of the damage to the housing market has already been done. I also think that the housing market won't return to "normal" for another 3 or 4 quarters at the earliest.
     

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