GDP report is a five alarm siren warning -- we are headed towards stagflation

[Ordinary Guy]

Carter is one happy man today as all indications are Biden will be 20 times harder on the working class than Carter!! -OG

The Commerce Department reported today that the high-flying U.S. economy with a 6.7% rate of growth in the U.S. economy for the first half of this year crash landed in the third quarter (July-September) with an anemic rate of just 2 percent.

Those under the age of 40 probably don’t even know what that is – and they’ve certainly never experienced it up front and personal.

Here’s the official definition from Investopedia: Stagflation is characterized by slow economic growth, which is at the same time accompanied by rising prices (i.e. inflation)."

The last time we saw this phenomenon was in the 1970s during the era of presidents Nixon, Ford, and Carter. Years of persistently high inflation triggered a surge in unemployment. That then led to the term "misery index." The sum of the inflation rate and the unemployment rate. It exceeded 18% in Carter’s last year in office.

And then it was…Jimmy we hardly knew ye. With the economy sagging, Carter lost a landslide election to Ronald Reagan.

Worse yet has been the expansion of welfare programs like food stamps and unemployment benefits (not tied to working). These free cash and benefit programs incentivized workers to stay out of the workforce and collect government payments that when added all up could be the equivalent of a $75,000 a year job in many states. The big surprise was that the labor force shrunk and companies had 11 million jobs they couldn’t fill.

The most worrisome trend is the almost overnight decline in business investment. Business investment or "Cap X," as it is sometimes called, is the seed corn of a productive economy.

Companies have slowed their investment spending in part because of the imminent threat of higher taxes and a steel fist of new regulations has cautioned businesses to hit the pause button.

Why invest when the politicians in Washington are threatening to tax away your earnings in the name of paying your "fair share?" Businesses that make profits are now demonized as enemies of the people in this new progressive culture.

The income redistributionists who seem to be driving the Democratic Party agenda are soon going to learn that there pixie dust economic doctrine called Modern Monetary Theory – which posits that Congress can spend and borrow ad infinitum -- is a giant hoax.

https://www.foxbusiness.com/markets/...-stephen-moore

 

[Moonglow]

Is that why the stock market is higher, unemployment is dropping and companies are having record setting profits?

 

[Otis Mayfield]

Carter is one happy man today as all indications are Biden will be 20 times harder on the working class than Carter!! -OG

The Commerce Department reported today that the high-flying U.S. economy with a 6.7% rate of growth in the U.S. economy for the first half of this year crash landed in the third quarter (July-September) with an anemic rate of just 2 percent.

Those under the age of 40 probably don’t even know what that is – and they’ve certainly never experienced it up front and personal.

Here’s the official definition from Investopedia: Stagflation is characterized by slow economic growth, which is at the same time accompanied by rising prices (i.e. inflation)."

The last time we saw this phenomenon was in the 1970s during the era of presidents Nixon, Ford, and Carter. Years of persistently high inflation triggered a surge in unemployment. That then led to the term "misery index." The sum of the inflation rate and the unemployment rate. It exceeded 18% in Carter’s last year in office.

And then it was…Jimmy we hardly knew ye. With the economy sagging, Carter lost a landslide election to Ronald Reagan.

Worse yet has been the expansion of welfare programs like food stamps and unemployment benefits (not tied to working). These free cash and benefit programs incentivized workers to stay out of the workforce and collect government payments that when added all up could be the equivalent of a $75,000 a year job in many states. The big surprise was that the labor force shrunk and companies had 11 million jobs they couldn’t fill.

The most worrisome trend is the almost overnight decline in business investment. Business investment or "Cap X," as it is sometimes called, is the seed corn of a productive economy.

Companies have slowed their investment spending in part because of the imminent threat of higher taxes and a steel fist of new regulations has cautioned businesses to hit the pause button.

Why invest when the politicians in Washington are threatening to tax away your earnings in the name of paying your "fair share?" Businesses that make profits are now demonized as enemies of the people in this new progressive culture.

The income redistributionists who seem to be driving the Democratic Party agenda are soon going to learn that there pixie dust economic doctrine called Modern Monetary Theory – which posits that Congress can spend and borrow ad infinitum -- is a giant hoax.

https://www.foxbusiness.com/markets/...-stephen-moore

Futures Rise, Ford Flashes Buy Signal; Here Comes Apple

Stocks closed at lows, despite big Microsoft, Google gains. Ford jumped late.

www.investors.com

Looks like things are looking up!

Sorry, must hurt your feelings to see America doing well.

 

[Ordinary Guy]

Futures Rise, Ford Flashes Buy Signal; Here Comes Apple

Stocks closed at lows, despite big Microsoft, Google gains. Ford jumped late.

www.investors.com

Looks like things are looking up!

Sorry, must hurt your feelings to see America doing well.

What a fucking idiot, stock gains mean nothing on a weaker dollar

 

[Moonglow]

It looks like the OP is jelly of the economy..

 

[Ordinary Guy]

Is that why the stock market is higher, unemployment is dropping and companies are having record setting profits?

growth is stocks mean nothing if consumers have a weaker dollar to spend, you are the biggest dumbass at this site

 

[task0778]

And to me the worst part is that we didn't have the monstrous debt back in the 70s. The prime interest rate exceeded 20% in the last month of the Carter Admin, can you imagine what our interest payments would be as we approach $30 trillion and climbing, if rates came anywhere near that high? People say well, that can't happen; oh yeah? Even if the prime only got back up to 5%, which is about the historical average, we'd still have to pay more than a trillion dollars a year just in interest on the debt. And yet we're still spending money in Washington like it was water.

 

[Moonglow]

What a fucking idiot, stock gains mean nothing on a weaker dollar

A weaker dollar existed all through Trump, yet the GOP claimed we have the best economy in the world.


Trump says the dollar is "too strong" -- good luck weakening it

Trump says the dollar is "too strong" -- good luck weakening it

President says U.S. currency is overvalued, hurting exports, but there are 3 reasons lowering the greenback will be tough

www.cbsnews.com

 

[Moonglow]

growth is stocks mean nothing if consumers have a weaker dollar to spend, you are the biggest dumbass at this site

The dollar was weak during Trump and prices were inflating over the tariff wars Trump created. This condition of out economy has existed since the GOP took over in 2017.

 

[Dogmaphobe]

you are the biggest dumbass at this site

........and considering all the competition he has vying for the top spot, that's really saying a lot.

 

[Moonglow]

Republicans and Democrats didn’t agree on much in 2019, with one exception: that a high U.S. dollar is bad for America. President Trump repeatedly called on the Federal Reserve to cut interest rates to devalue the dollar, while presidential hopeful Senator Elizabeth Warren, promised to “produce a currency value that’s better for our workers and our industries.”

Unintended consequences: Trump and Warren’s bipartisan plan for the US dollar | Brookings

Republicans and Democrats didn’t agree on much in 2019, with one exception: that a high U.S. dollar is bad for America.

www.brookings.edu

 

[JGalt]

Is that why the stock market is higher, unemployment is dropping and companies are having record setting profits?

The Federal Reserve is artificially inflating the stock market through quantitative easing. The jobs numbers were dismal, at the last report, with only 194,000 of the predicted 500,000. Corporate profits are also up because people weren't spending money during the pandemic, but were saving it. Then of course, there was all that money the government gave to people with the economic stimulus payments.

Add those to the supply line disruptions, the shortages, the rise in energy costs, and inflationary prices, and the Biden administration is up shit creek without a paddle.

Please tell me what magical rabbit is Joe Fucking Biden is going to pull out of his ass? If you think he's in control of this economy and he's going to suddenly turn everything around, you're dumber than I though you were.

 

[Moonglow]

The Federal Reserve is artificially inflating the stock market through quantitative easing. The jobs numbers were dismal, at the last report, with only 194,000 of the predicted 500,000. Corporate profits are also up because people weren't spending money during the pandemic, but were saving it. Then of course, there was all that money the government gave to people with the economic stimulus payments.

Add those to the supply line disruptions, the shortages, the rise in energy costs, and inflationary prices, and the Biden administration is up shit creek without a paddle.

Please tell me what magical rabbit is Joe Fucking Biden is going to pull out of his ass? If you think he's in control of this economy and he's going to suddenly turn everything around, you're dumber than I though you were.

Yes, thanks to Trump and his demands of low interest and fake support of the economy to hide his massive loss of the economy during the pandemic the fed reserve is doing the same thing it was doing during Trump, but you were ok when Trump did it and included several trillions in debt accumulation on freebies. If you would get yer head out of yer ass you could see that there is no difference in the Dems and the Repubs on this issue they are both one in the same...

 

[JohnDB]

Currently the Dollar has been falling this week. It's down to 93.31 from highs of 94.xx last week.

Now this is due to the selling of bonds to provide extremely low interest rates for mortgage loans and stock purchases. (Market stimulus)

The problem is that the current rates for loans are below the inflation rate. The FED has caused a catastrophic bubble to form and don't want to pop it... because the second they stop the stimulus interest rates will no longer be artificially low and the high flying market will accurately tank tremendously. (All the leveraged stock purchases/positions will have to be dumped by investors)

Disappointing earnings are coming...so is a lean Christmas sales season. (Supply chain interruptions)

Growth stocks are what is driving this market. Ford's stellar profits were expected despite the bumbling CEO statements because of the backlog of demand for new vehicles. (They have been sold but just waiting to be delivered)

But it is an extremely small sector of the market and economy. Manufacturing is the backbone of our technology driven economy. But American manufacturing is just a snippet of the whole global manufacturing economy. And that economy is showing signs of real problems...orders have been standing around for so long they have been abandoned at this point. It started with microchips and has expanded to a LOT of materials like nylon (seats in automobiles) and kevlar (used for making tires).
The lack of sufficient energy(expensive energy) has also exacerbated the low supply of low priced commodities like sugar (used for ethanol) and cotton and coffee.

And now with a new tax structure looming corporations are waiting to see what evolves out of Washington DC so they can strategize against paying taxes...to find loopholes and possibly moving all operations and charter out of the country.

 

[rightwinger]

I think the recent GDP s an indication that the economy has recovered to the level it was at under 8 years of Obama and 4 years of Trump

 

[EvilCat Breath]

There is an old story about a poor woman and her child. They cannot afford to get cracks around the windows repaired. They take old newspapers, rip them up and stuff the paper in the holes to keep the cold out. The child says to Mom "what do poor people do who don't have any newspaper." That's the democrats.

 

[JohnDB]

Why would someone borrow money to buy stock?
Because of the market stimulus...no other reason.

Let's say that you borrowed 10,000 dollars to buy NVDA this past summer at @ $660 a share. That money cost interest rate of 3½%.
Currently NVDA is selling around $240/share after having a stick split of 4:1.

Each share has returned over 80%.... because of the market stimulus. It hasn't even been a full year. So you get to pay 5months worth of interest on the 10,000 of around $200. But you can afford it out of the $8,000 profit you made.

 

[rightwinger]

There is an old story about a poor woman and her child. They cannot afford to get cracks around the windows repaired. They take old newspapers, rip them up and stuff the paper in the holes to keep the cold out. The child says to Mom "what do poor people do who don't have any newspaper." That's the democrats.

No, Democrats would provide the poor with funding to fix their windows.
Republicans would just throw them a newspaper

 

[JGalt]

Yes, thanks to Trump and his demands of low interest and fake support of the economy to hide his massive loss of the economy during the pandemic the fed reserve is doing the same thing it was doing during Trump, but you were ok when Trump did it and included several trillions in debt accumulation on freebies. If you would get yer head out of yer ass you could see that there is no difference in the Dems and the Repubs on this issue they are both one in the same...

It all goes back to Trump with you people, doesn't it? Or Reagan. I guess it's a little too much of me to think that you'd accept some personal responsibility now and then, eh?

Joe Biden, the Democrat Party, and those who voted for them own this rotten economy, lock stock and barrel. Sorry, but you won't get to blame us until after Trump or another Republican takes office in 2024.

 

[Dekster]

While it may have been bad for some, in terms of real dollars, a lot of workers in the 70's saw their purchasing power increase because employers over estimated the rise of inflation when giving out raises. It was a weird dynamic that made the high interest rates that would be shocking today not that big of a deterrence to borrowing.