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"This is the clearest evidence of consumer deleveraging that we have. Consumers are actively saving more, borrowing less and paying back their credit card balances and other debt," said Zach Pandl, an economist at Nomura Securities International in New York.
"This is a positive thing in the long run, but in the short term it is negative for growth. People spending less means demand will be weaker and employment will be weaker."
While data indicate the economy started growing again in the third quarter after a recession that started in December 2007, consumer spending and a weak labor market remain the missing link to a sustained recovery.
Originally posted by GreenBicMan
Here is, among many others, one of the most convincing arguments.
Historically the market will gain an "x" percentage every 10 years.
Everytime in history when we have had 10 years (as this occurance now from 1999-2009) that we do not - the next ten years will make up for those losses and also gain you "x" percentage for that 10 years.
I believe it is 20% compounded every 10 years. But it could be something else, I am forgetting right now and do not want to misquote.
Either way as I have been continually saying, and you can check my sig. that this market right now is due for another hisotrical long tenure bull market.
Another way to think of it is, think about all the new tech. that comes out all the time. It comes out exponentially faster than we really can comprehend. 100 somes years years ago till now we went from candles to wireless internet on your iphone.
Think about the next 100 if we stay on this same pace. It is human nature to be bullish and want to outdue the next guy with your unique ideas. Thats why USA is currently still number one, we have the best thinking/artistic people in the world residing here.
Let china make all the bull# plastic dolls and cars they want. Its companies like Intel, Microsoft, and Google that drive the future, not Toyota. Our debt HISTORICALLY drives us FURTHER than any other country. EVERYONE buys OUR DEBT because IT IS BACKED BY THE FULL FAITH AND CREDIT OF THE US GOVERNEMNT.
Thats just one way to put all of this, but there are many others as well.
[edit on 23-10-2009 by GreenBicMan]
KANSAS CITY, Mo. (AP) -- Home sales in the Midwest increased in September as a soon-to-expire tax credit for first-time buyers and glimmers of an economic recovery brought more people to the closing table.
The National Association of Realtors said Friday that there were an estimated 110,000 resales in the Midwest, up 5.8 percent from September last year. The median sale price for the region fell 1 percent to $147,600, marking the smallest decline in the country.
Nationally, home resales rose almost 8 percent from a year ago, without adjusting for seasonal factors. The median sale price fell 8.5 percent to $174,900, the Realtors association said.
Originally posted by LadySkadi
reply to post by SLAYER69
Hmmm, well there is a mixed holiday sales forecast. It suggests that retail may be flat lined or -1% end of year '09. Compare it to the -5.9% last year and it would seem that spending is actually going up (or it may just account for the dramatic drop in '08). I suppose flat lined is better than still falling...
In a sign the holiday period could be good to online retailers, Amazon.com Inc. posted a 69% increase in third-quarter profit and offered a rosy outlook for the current quarter.
Shares of Amazon.com Inc. leap to record levels after the online retailer reports a 69% jump in third-quarter earnings. The shares have more than doubled since the start of the year. MarketWatch's Dan Gallagher reports in San Francisco.
The results were driven by a 44% rise in sales of electronics and general merchandise, including TVs and office supplies, which now account for 43% of the retailer's sales.
Amazon also reported a 17% spike in sales of media, which had dragged on earnings in the second quarter because of sluggish video-game sales. Results were bolstered by the debut of several popular books, including Dan Brown's "The Lost Symbol."
Economic update as follows
Growth was driven by consumption, exports, federal government spending, home building and inventories. Consumption contributed 2.4% of the growth, with a particular boost in autos. Thanks to the Cash for Clunkers program, motor vehicle output added 1.66 percentage points to GDP. But even without this particular stimulus program, consumption improved and the economy grew nearly 2%, a swift turnaround from the first quarter of 2009 when the economy was shrinking at a 6.4% rate.
The worst US recession in 70 years has unofficially come to an end after the economy grew in the third quarter.
"all you've done is you've taken the private sector debt and you've bunged it into the public sector. That's all you've done. Now that's not a recovering economy, as it were in addictive parlance, but it's simply the fact that you've got a huge amount of money being whacked into economy."
President Barack Obama is hailing new figures showing the economy grew at a 3.5 percent rate in the third quarter. In remarks to a small business group, Obama says he believes the new figures show that the recession is easing. (Oct. 29)
“Consumers will feel that the news is getting better, but not good,” Joel Naroff, president of Naroff Economic Advisors Inc. in Holland, Pennsylvania, and the top economic forecaster last year according to a survey by Bloomberg Markets magazine, said in an interview. Americans “are not going to see businesses out there hiring a whole lot of people and the unemployment rate is likely to continue to rise.”
The GDP number marks the “first, semi-official recognition” that the recession is over, said Paul Dales, U.S. economist at Capital Economics Ltd.
This first evidence since early 2008 that the economy is growing again may seem like cause for celebration.
But temper the enthusiasm: The main driver of the economy – U.S. consumers – are still in a deep funk, relying heavily on temporary government incentives to get them to spend.
“It's certainly a good milestone,” added Bill Cheney, chief economist at MFC Global Investment Management in Boston. “The end of a recession is as bad as it gets, but given how far down we went, happy days are still a long way off.”
“The benchmark I use to measure the strength of our economy is not just whether our GDP is growing, but whether we’re creating jobs, whether families are having an easier time paying their bills, whether our businesses are hiring and doing well,” Obama told business leaders in a speech on the White House grounds.
Washington policy makers are seeking to sustain the recovery from the worst recession since the 1930s and boost job growth. The unemployment rate reached a 26-year high of 9.8 percent in September. A continuation of high unemployment may effect mid-term congressional elections a little more than a year from now.
reply to post by SLAYER69
This time, the CEO said, the continent appears to be keeping pace with the U.S., where the economy has been improving since June, based on the usage of the Internet's largest search engine and most profitable advertising network.