More Good Economic News

[red states rule]

More bad news for the Dems and the economic doom and gloomers


Economy Cranks Up in 2Q at 3.4 Percent Pace, Best Showing in More Than a Year
Friday, July 27, 2007

WASHINGTON — U.S. economic growth rebounded during the second quarter to its strongest pace since the beginning of last year on a surge in business investment, more government spending and a better trade performance, the Commerce Department reported on Friday.

Gross domestic product that measures total output within U.S. borders gained at a 3.4 percent annual rate — the fastest since 4.8 percent in the first quarter of 2006 — after barely growing at a downwardly revised 0.6 percent pace in the first quarter. Previously the government had reported that first-quarter growth was at a 0.7 percent rate.

Second-quarter growth exceeded Wall Street economists' forecasts for a 3.2 percent rate of increase and showed the business sector picking up some of the slack left by consumers who cut back on their spending.

There was encouraging news on the inflation front, as so-called core prices that exclude food and energy items gained at a surprisingly low 1.4 percent annual rate, the lowest in four years since 1.3 percent in the second quarter of 2003. Economists had forecast a 2 percent rate of advance in core prices.

Nonresidential business investment climbed at an 8.1 percent rate in the second quarter, nearly four times the 2.1 percent registered in the first quarter as commercial building activity soared. Home building remained a drag, but less so, shrinking at a 9.3
http://www.foxnews.com/story/0,2933,291075,00.html

 

[Bullypulpit]

Let's temper FOX Noise's rosy assessment with a bit of reality, shall we?

<blockquote>Countrywide Financial, the nation’s largest mortgage lender, said yesterday that more borrowers with good credit were falling behind on their loans and that the housing market might not begin recovering until 2009 because of a decline in house prices that goes beyond anything experienced in decades.

The news from Countrywide, widely seen as a bellwether for the mortgage market, initiated a sell-off in the stock market, which is at its most volatile in more than a year. The Standard & Poor’s 500-stock index fell 30.53 points, or 2 percent, to 1,511.04, its biggest one-day drop in nearly five months. The dollar dropped to a new low against the euro, edging closer to $1.40 to 1 euro. Stocks opened sharply lower in Japan this morning.

The slumping housing market has become the biggest worry for the stock market, which just four days ago set records, because of its potential impact on the broader economy and financial system.

Countrywide’s stark assessment signaled a critical change in the substance and tenor of how housing executives are publicly describing the market. Just a couple of months ago, some executives were predicting a relatively quick recovery and saying that most home loans would be fine with the exception of those made to borrowers with weak credit who stretched too far financially.

Executives at Countrywide had for some time been more skeptical than others but the bluntness of their comments yesterday surprised many on Wall Street. In a conference call with analysts that lasted three hours, Countrywide’s chairman and chief executive, Angelo R. Mozilo, said home prices were falling “almost like never before, with the exception of the Great Depression.” - <a href=http://www.nytimes.com/2007/07/25/business/25lend.html?_r=5&ei=5087%250A&em=&en=1eb185b561783637&ex=1185422400&adxnnl=1&oref=login&adxnnlx=1185798269-SZPvn5B3LdNvxfUUvApibw&pagewanted=print>New York Times</a></blockquote>

Double the number of people judged to be "good credit risks" are in default on their mortgages from the same time last year. Also, more than 20% of sub-prime borrowers are in default, up from 13.4% at the same time last year. The upshot of this is that people who would normally be considered good credit risks are being financially squeezed by stagnant wages, staggering amounts of unsecured (credit card), soaring health-care costs and more.

The fact is that market gains aren't trickling down to the people who drive the markets...the people who produce the goods and services that provide the profits corporate America pays the share holders.

 

[red states rule]

Let's temper FOX Noise's rosy assessment with a bit of reality, shall we?

<blockquote>Countrywide Financial, the nation’s largest mortgage lender, said yesterday that more borrowers with good credit were falling behind on their loans and that the housing market might not begin recovering until 2009 because of a decline in house prices that goes beyond anything experienced in decades.

The news from Countrywide, widely seen as a bellwether for the mortgage market, initiated a sell-off in the stock market, which is at its most volatile in more than a year. The Standard & Poor’s 500-stock index fell 30.53 points, or 2 percent, to 1,511.04, its biggest one-day drop in nearly five months. The dollar dropped to a new low against the euro, edging closer to $1.40 to 1 euro. Stocks opened sharply lower in Japan this morning.

The slumping housing market has become the biggest worry for the stock market, which just four days ago set records, because of its potential impact on the broader economy and financial system.

Countrywide’s stark assessment signaled a critical change in the substance and tenor of how housing executives are publicly describing the market. Just a couple of months ago, some executives were predicting a relatively quick recovery and saying that most home loans would be fine with the exception of those made to borrowers with weak credit who stretched too far financially.

Executives at Countrywide had for some time been more skeptical than others but the bluntness of their comments yesterday surprised many on Wall Street. In a conference call with analysts that lasted three hours, Countrywide’s chairman and chief executive, Angelo R. Mozilo, said home prices were falling “almost like never before, with the exception of the Great Depression.” - <a href=http://www.nytimes.com/2007/07/25/business/25lend.html?_r=5&ei=5087%250A&em=&en=1eb185b561783637&ex=1185422400&adxnnl=1&oref=login&adxnnlx=1185798269-SZPvn5B3LdNvxfUUvApibw&pagewanted=print>New York Times</a></blockquote>

Double the number of people judged to be "good credit risks" are in default on their mortgages from the same time last year. Also, more than 20% of sub-prime borrowers are in default, up from 13.4% at the same time last year. The upshot of this is that people who would normally be considered good credit risks are being financially squeezed by stagnant wages, staggering amounts of unsecured (credit card), soaring health-care costs and more.

The fact is that market gains aren't trickling down to the people who drive the markets...the people who produce the goods and services that provide the profits corporate America pays the share holders.

Libs always see the glass as half empty - when a Republican is President

Libs were giddy a few months ago when the Dow fell 500 points - but were dismissive when it set several record highs

It will happen again. Now is a great time to buy - and the investors will

 

[JeffWartman]

Libs always see the glass as half empty - when a Republican is President

Libs were giddy a few months ago when the Dow fell 500 points - but were dismissive when it set several record highs

It will happen again. Now is a great time to buy - and the investors will

Do you understand what it means when the value of the dollar changes in relation to other currencies?

 

[Bullypulpit]

Do you understand what it means when the value of the dollar changes in relation to other currencies?

Personally, I don't believe he has even the flimsiest grasp of economic fundamentals.

 

[Bullypulpit]

Libs always see the glass as half empty - when a Republican is President

Libs were giddy a few months ago when the Dow fell 500 points - but were dismissive when it set several record highs

It will happen again. Now is a great time to buy - and the investors will

When people who have previously had no difficulty making their mortgage payments now find themselves in default on their mortgages...It sends a very important signal. Those people are in a financial bind, thus their discretionary spending will be cut back, sometimes drastically. Now the engine of the US economy is consumer spending...when that contracts, the economy contracts...when the economy contracts, jobs get cut...when people lose their jobs, their consumer spending drops drastically...and so we have that vicious deflationary cycle. Trends in the mortgage industry tend to be a bellwether for the rest of the economy. I hope I'm wrong.

 

[mattskramer]

Libs always see the glass as half empty - when a Republican is President

Libs were giddy a few months ago when the Dow fell 500 points - but were dismissive when it set several record highs

It will happen again. Now is a great time to buy - and the investors will

Likewise, if the economy were doing well under a Democrat president, conservatives would be depressed. If the economy were doing poorly under a Democrat, the conservatives would be cheering. Conservatives would look for statistics to support their contention that the economy did poorly under a democrat. Democrats would pick and choose research to support their claim that the economy did well under a democrat. Repubs will get their news from FOX. Democrats would get their news from more liberal sources. It is simply the other side of the coin.

 

[Annie]

When people who have previously had no difficulty making their mortgage payments now find themselves in default on their mortgages...It sends a very important signal. Those people are in a financial bind, thus their discretionary spending will be cut back, sometimes drastically. Now the engine of the US economy is consumer spending...when that contracts, the economy contracts...when the economy contracts, jobs get cut...when people lose their jobs, their consumer spending drops drastically...and so we have that vicious deflationary cycle. Trends in the mortgage industry tend to be a bellwether for the rest of the economy. I hope I'm wrong.

Bully, I go along with there are inherent weaknesses in the economy right now. What I don't agree with is your take on foreclosures, that has to do with lending practices during at least the past 4 administrations. People have been acquiring amounts they could not cover as soon as the slightest things go wrong. Those are NOT good loans.

 

[maineman]

Bully, I go along with there are inherent weaknesses in the economy right now. What I don't agree with is your take on foreclosures, that has to do with lending practices during at least the past 4 administrations. People have been acquiring amounts they could not cover as soon as the slightest things go wrong. Those are NOT good loans.

cumulative failure in that segment of the economy does indicate that there is something going wrong, however.

 

[Annie]

cumulative failure in that segment of the economy does indicate that there is something going wrong, however.

Yep, with the lenders.

 

[Bullypulpit]

Yep, with the lenders.

So instead of reforming their lending practices, they go to a Congress for a bankruptcy reform bill that amounts to little more than serfdom.

 

[Annie]

So instead of reforming their lending practices, they go to a Congress for a bankruptcy reform bill that amounts to little more than serfdom.

and who is at fault, the lenders or Congress? My $ on lenders, Congress if they enable.

 

[Bullypulpit]

<blockquote>By the end of last week, any lingering hope that the housing downturn would be contained had vanished. As this week begins, signs of contagion seem to be everywhere.

Unnerved by mounting losses in mortgage- related investments, investors have started to shun tens of billions of dollars in corporate debt offers as well — and seem likely to go on doing so for months to come. That would stanch the flow of easy money that has fueled the leveraged buyout boom, which would, in turn, expose the extent to which stocks have also come to depend on cheap credit. Stocks took a dive last week because debt-driven buyouts had long boosted the share prices of targeted companies. Stocks have also benefited directly from easy money because public companies have borrowed heavily to buy back their own stock, a ploy to drive up earnings per share. - <a href=http://www.nytimes.com/2007/07/30/opinion/30mon1.html?ei=5088&en=12f245dd50332570&ex=1343448000&partner=rssnyt&emc=rss&pagewanted=print>New York Times</a></blockquote>

And so we see the chickens coming home to roost. As consumer spending slows, credit becomes tighter and the leveraged buy-outs end...the borrowing by companies to buy back stocks ends...the market starts downward dragging the rest of the economy with it. But the top 2% never need to worry about that. Even in the worst days of the Great Depression the wealthiest Americans never experienced more than a gentle buffeting by the economic storm that washed over the rest of the country. And given the massive amounts of debt incurred by the Bush administration to finance the invasion and occupation of Iraq and the draconian cuts to basic safety-net programs made by the GOP controlled Congress, there will be little if anything the government can do to cushion the blow to middle and low income Americans.

 

[Annie]

<blockquote>By the end of last week, any lingering hope that the housing downturn would be contained had vanished. As this week begins, signs of contagion seem to be everywhere.

Unnerved by mounting losses in mortgage- related investments, investors have started to shun tens of billions of dollars in corporate debt offers as well — and seem likely to go on doing so for months to come. That would stanch the flow of easy money that has fueled the leveraged buyout boom, which would, in turn, expose the extent to which stocks have also come to depend on cheap credit. Stocks took a dive last week because debt-driven buyouts had long boosted the share prices of targeted companies. Stocks have also benefited directly from easy money because public companies have borrowed heavily to buy back their own stock, a ploy to drive up earnings per share. - <a href=http://www.nytimes.com/2007/07/30/opinion/30mon1.html?ei=5088&en=12f245dd50332570&ex=1343448000&partner=rssnyt&emc=rss&pagewanted=print>New York Times</a></blockquote>

And so we see the chickens coming home to roost. As consumer spending slows, credit becomes tighter and the leveraged buy-outs end...the borrowing by companies to buy back stocks ends...the market starts downward dragging the rest of the economy with it. But the top 2% never need to worry about that. Even in the worst days of the Great Depression the wealthiest Americans never experienced more than a gentle buffeting by the economic storm that washed over the rest of the country. And given the massive amounts of debt incurred by the Bush administration to finance the invasion and occupation of Iraq and the draconian cuts to basic safety-net programs made by the GOP controlled Congress, there will be little if anything the government can do to cushion the blow to middle and low income Americans.

So Bully, are you predicting a crash worse than 1929? Sounds like.

 

[Bullypulpit]

So Bully, are you predicting a crash worse than 1929? Sounds like.

Maybe I'm being paranoid...but I've been right before. I hope I'm wrong.

 

[maineman]

Yep, with the lenders.

and you don't think that their problems ripple through the economy?

 

[Annie]

and you don't think that their problems ripple through the economy?

Most certainly. Didn't you see my earlier post?

 

[maineman]

It seemed to me that you were minimizing and marginalizing but I certainly could be mistaken....God only knows I have done so before.

 

[Bullypulpit]

I know I'm belaboring the obvious, but when facts were presented which contradicted his FOX Noise talking points RSR jumped ship.