economy is rebounding.

#2
#2
Oh no, not a rebound...
ohheck.gif
 
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#3
#3
Shhhh..The sky is falling. I wonder if Obama will say anything about this tonight?
 
#4
#4
Our exports look more attractive due to the value of our dollar I'm assuming.
 
#6
#6
So we never had the "recession" and it looks like it won't happen this year.

It shows how terms weak, strong, rebounding, shrinking can be misleading. Right now, Bernake calls the economy weak referring to GDP growth but the big indicators are still all in good shape. It is weaker than it could be but not really weak.

Obama's campaign is hammering McCain for claiming the fundamentals are strong. I'd say McCain's comments are closer to the truth than claiming the fundamentals are weak.
 
#7
#7
volinbham said:
So we never had the "recession" and it looks like it won't happen this year.

It shows how terms weak, strong, rebounding, shrinking can be misleading. Right now, Bernake calls the economy weak referring to GDP growth but the big indicators are still all in good shape. It is weaker than it could be but not really weak.

Obama's campaign is hammering McCain for claiming the fundamentals are strong. I'd say McCain's comments are closer to the truth than claiming the fundamentals are weak.
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The economy should never be a political issue, but it always is. In fact, it's typically the #1 driver in the election. The President has marginal impact on the overall economy. I'll listen to economists and analysts far before I listen to a politician tell me how the economy is doing. Some analyst expectations below:

U.S. economy expanded at 3.3% in Q2 2008 (versus the advance of 1.9%); Q4 2007 revised down to negative growth: -0.2% (versus +0.6% previously estimated); Q1 2008 revised down to 0.9% from 1%
Details of Q2 real GDP growth:

- personal consumption expenditure: 1.7% (adv 1.5%) - gross private domestic investment -12% (adv -14.8%) (residential: -15.7%; adv -15.6%) - exports: 13.2% (adv +9.2%); imports: -7.6 (adv -6.6%) - Govt consumption expenditure: 3.9% (adv 3.4%)

Paribas: As impact of tax rebates fade, growth will slowdown again in Q3 and hit a trough in Q4-08 and Q1-09 as economic and financial weaknesses continue

Merrill Lynch (not online): Tax rebates will provide only temporary relief to consumption; 3Q growth to be roughly flat and with a 2% contraction in Q4; we won't see a recovery until mid-2009

Unicredit: Q2 GDP growth led by the boost of tax rebates on real consumer spending; continued boost from rebates in Q3-08 will provide some support to consumption (+1.5%) and growth (+2.1%) before consumer spending turns flat and GDP growth slows in Q4-08

Goldman Sachs (not online): Fiscal stimulus, equity rally indicate positive but modest GDP growth in Q2 boosted by consumption and retail sales, but economy will slowdown again thereafter as impact of rebates will fade unless more stimulus measures are enacted. This will lead to a W-shaped recession

JP Morgan (not online): Consumption and exports hold up even as manufacturing activity and inventories scale down; growth will face headwinds in H2-08 as consumption will contract but will remain around 1% due to support from exports, steady non-financial corporate sector and recent drawdown on inventories

IMF: Economic activity will deteriorate in H2-08 as higher food and gas prices and tighter credit conditions will hit consumer spending

Alliance Bernstein: Producers trying to offset lower volumes with higher prices; oil prices and inflationary pressure will lead to GDP growth of 1.5% in H2-08 as impact of fiscal stimulus, monetary easing and weak dollar fade

Bloomberg survey: Growth will weaken starting Q4 as continued rise in food, gas prices, credit tightening, job losses and falling home prices scale down consumer spending

MFC: Tax rebate will continue to boost consumption and GDP growth at 2% and 2.5% in Q3 before beginning to weaken in Q4

UOB: Forecast for Q3 GDP growth and consumption at 1% and 1.4% respectively; BMO: Forecast for Q3 GDP growth at 4.9% and 2.8% respectively
 
#8
#8
VolByBirth said:
The economy should never be a political issue, but it always is. In fact, it's typically the #1 driver in the election. The President has marginal impact on the overall economy.
Click to expand...

I agree with the last statement but not as much with the first. I think political perspectives on economic policy are a legitimate issue.
 
#10
#10
I completely agree the president has little affect on the economy that is unless he tries to implement obama like socialism that will cost us billions.

I don't for one minute believe the economy is coming back. No one can get a loan now.
 
#12
#12
droski said:
I completely agree the president has little affect on the economy that is unless he tries to implement obama like socialism that will cost us billions.

I don't for one minute believe the economy is coming back. No one can get a loan now.
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I imagine all that will come along in due time. Things like this tend to happen in phases.
 
#13
#13
droski said:
I completely agree the president has little affect on the economy that is unless he tries to implement obama like socialism that will cost us billions.

I don't for one minute believe the economy is coming back. No one can get a loan now.
Click to expand...

Neither do I. Just like I don't believe high oil prices are due to supply and demand. When was the last time you pulled up to a gas station and their supply was out?
 
#14
#14
droski said:
I completely agree the president has little affect on the economy that is unless he tries to implement obama like socialism that will cost us billions.

I don't for one minute believe the economy is coming back. No one can get a loan now.
Click to expand...
I'm with you. I think the FDIC is going to clamp down until an enormous wave of bank consolidation happens and strengthens that sector.

Lending right now really boils down to the only folks able to borrow are those who don't truly need it. There is a slew of hard money folks popping up with equity available, but they seem to only be after distressed and heavily discounted real estate deals.

That said, the economy outside of the real estate world (which unfortunately impacts everyone) has been reasonable in light of some horrendous petrol pricing.
 
#15
#15
True there is no supply problem. No question. There has been increased demand but not $115 oil increased demand. I blame the 1000% increase in speculators in oil over the past 5 years.
 
#16
#16
BigPapaVol said:
That said, the economy outside of the real estate world (which unfortunately impacts everyone) has been reasonable in light of some horrendous petrol pricing.
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true, but it's not just those in real estate that can't get loans. it's filtered into all aspects of the economy. is the world ending? obvoiusly not. is the economy bottoming? nope
 
#17
#17
"That said, the economy outside of the real estate world (which unfortunately impacts everyone) has been reasonable in light of some horrendous petrol pricing" Agree with this, overall the economy is solid, not great, but solid.
 
#18
#18
droski said:
true, but it's not just those in real estate that can't get loans. it's filtered into all aspects of the economy. is the world ending? obvoiusly not. is the economy bottoming? nope
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It's credit in it's entirety that is hurting. American consumption is built on credit. This will way on the economy heavily.

From mortgages to auto loans to credit cards -- credit markets are tight and it's not because of a lack of capital. Cash is king and banks are hoarding it right now.
 
#19
#19
VolByBirth said:
It's credit in it's entirety that is hurting. American consumption is built on credit. This will way on the economy heavily.

From mortgages to auto loans to credit cards -- credit markets are tight and it's not because of a lack of capital. Cash is king and banks are hoarding it right now.
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banks aren't hoarding it, they don't have any.
 
#20
#20
droski said:
True there is no supply problem. No question. There has been increased demand but not $115 oil increased demand. I blame the 1000% increase in speculators in oil over the past 5 years.
Click to expand...

But it's common for investors to head to commodities (oil) when the dollar is weak. Do you believe oil will drop if the dollar rises? If that's the case -- the Fed needs to start increasing rates. Many argue this will further tighten credit markets and hurt the financial sector but access to capital for these banks is not the issue. They have cash -- they simply aren't lending -- regardless of how far the Fed cuts rates.
 
#21
#21
VolByBirth said:
But it's common for investors to head to commodities (oil) when the dollar is weak. Do you believe oil will drop if the dollar rises? If that's the case -- the Fed needs to start increasing rates. Many argue this will further tighten credit markets and hurt the financial sector but access to capital for these banks is not the issue. They have cash -- they simply aren't lending -- regardless of how far the Fed cuts rates.
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do what?

Weak dollar isn't he commodity rush driver, it's inflation. Investors flock to commodities to hedge against inflation.

I'm not sure how the increasing rates would help today? Makes every prospective loan look worse from a coverage ratio standpoint.

I'll assure you that when banks are taking credit quality hits and losses, their level of regulatory capital won't allow them to make loans. In short, they aren't sitting on the funds you're talking about. That's why the huge banks are raising capital today. Large credit losses are almost universal today. The FDIC is the main culprit in the lending arena. They simply won't allow new loans to happen today without actually hammering a bank's capital.
 
#22
#22
BigPapaVol said:
do what?

Weak dollar isn't he commodity rush driver, it's inflation. Investors flock to commodities to hedge against inflation.

I'm not sure how the increasing rates would help today? Makes every prospective loan look worse from a coverage ratio standpoint.

I'll assure you that when banks are taking credit quality hits and losses, their level of regulatory capital won't allow them to make loans. In short, they aren't sitting on the funds you're talking about. That's why the huge banks are raising capital today. Large credit losses are almost universal today. The FDIC is the main culprit in the lending arena. They simply won't allow new loans to happen today without actually hammering a bank's capital.
Click to expand...

But the impact of dropping rates has been negligible for the banking sector. Why not start to increase them, potentially restore some value to the dollar, hedge inflation, and push down the price of oil (as people stop hedging against inflation)?
 
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