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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (22680)	11/30/2004 11:36:35 PM
From: Archie Meeties	Read Replies (2) \| Respond to of 110194

Anybody join me in a short of E, X or N? -g-

To: mishedlo who wrote (22680)	12/1/2004 7:13:41 AM
From: russwinter	Read Replies (1) \| Respond to of 110194

<recession which would then send interest rates back down below 1%.> Won't be the Fed's call. From the Shostak essay: The only reason why the economy continues to march ahead is on account of the positive flow of funding from the rest of the world. Thus in Q1 the balance on the US current account was in deficit by $145 billion against a deficit of $127 billion in the previous quarter. As a percentage of nominal GDP the current account deficit stood at 5.1% in Q1 against 4.5% in Q4. Although the present emerging tighter stance is likely to produce pain, there is currently no other alternative that can prevent the decimation of economy's real foundations brought about by extremely loose monetary policy. However, we suggest that one shouldn't exclude the possibility that if the economy were to plunge on account of the emerging tighter interest rate stance that the Fed may make a quick reversal of its stance. Whether this possible reversal would arrest the plunge will be determined by the availability of real savings from the rest of the world.

To: mishedlo who wrote (22680)	12/1/2004 11:09:17 AM
From: Skywatcher	Read Replies (1) \| Respond to of 110194

An interesting look behind the numbers - a quarter of GDP is cars that haven't been sold, another 10% is defense spending, 15% for medical care, etc. Where's the beef? A closer look at GDP by RodgerRafter on the FOOL Today's GDP revision showed that the economy grew a whole buch during July, August and September. Of course you should already know that, because according to the government you were responsible for almost all of that growth: bea.doc.gov (download the spreadsheet entitled "Tables from news release") Of the 3.9% number for total annualized growth in economic output, consumer spending accounted for 3.53%, leaving 0.46% for private investment, 0.23% for government expenditures and a subtraction of 0.27% for the trade gap. Breaking down the consumer portion we find the biggest growth was in: Motor Vehicles and parts; 0.97%. Car makers report sales when they ship models to dealers, not when somebody actually purchases them (or pays for them for that matter). Food; 0.41%. We spent $25.7 Billion more on food in Q3, supposedly adjusted for inflation. If you believe inflation is being adequately measured, then we really feasted up a storm last quarter. Otherwise, you can see how understating inflation boosts GDP. Medical Care; 0.59%. We spent $14.9 Billion more on medical care compared to Q2 and $45.0 B vs. a year ago. Since millions more people are without health care, those who get it must be getting some REALLY GOOD medical care. Funny how the government doesn't hedonically adjust downward for all the hassles and BS we have to endure with our HMOs these days. Breaking down the private investment portion: Residential housing; 0.10% grew at its slowest rate since Q4 2001. Equipment and software; 1.28%. Bigger impact than cars? Love those hedonic adjustments, don't you. Selling the same amount of stuff really means selling more when you hedonically adjust for how much better it is than the stuff you sold last year. Changes in nonfarm inventories; -0.99%. Too bad all that extra stuff that was supposedly produced didn't actually get sold. Breaking down the government expenditures portion: National defense; 0.44%. $726 B worth of dead Iraqis and global military domination (annualized Q3) is great for the GDP ($9.7 more than Q2 and $32.1 B more than the year ago quarter). Federal Nondefense; -0.12%. Who says GWB isn't fiscally responsible. He makes the tough decisions to cut spending on anything that might actually help Americans. State and Local; -0.09%. Since State and Local governments aren't supposed to be able to run a deficit, this gives a better idea of how the economy actually did last quarter.