It's the Economy, Stupid

You might want to give a blurb for those who aren't a member at NY Times (it might make em interested enough to join and read the article).

Craven's right -- the article isn't too long. I'd copy and paste it.
I'd also read current articles in "The Economist" to get a better picture of what is happening with the economy. It's obvious that it's not good and tax cuts are not the panacea. It's a bandaid over a three-inch gash.

I would like to offer one suggestion, while the New York Times is a fine newspaper, they lean very heavily to the left. This only means that their articles like this one leans away from saying much good about this administration.
While this is a good and informative article, it might behove you to read other articles on the subject to get a more "fair and balanced" view of the problem.
This is not always easy because other newspapers may lean to far in the other direction, but it is a good way to find the middle, that is in between somewhere.

Slimmerson:

Why don't you give us the name of a good, solid, middle of the road newspaper.

Anon

Anon
Is it possible that such a news organ exists?

My first internal post, we'll see if it works...
http://www.able2know.com/forums/viewtopic.php?t=1448
Craven has done an admirable job with this topic...

Actually, Newspapers are off-thread a little bit.

Anyone here think that the economy is actually making progress?

So far the consumer has kept the nation afloat, but how long can homes be refinanced and the funds be spent! Sooner or later, that comes to a crashing end! When that happens, what are we counting on? Maybe the Republicans are thinking that the wartime economy is the answer. Just as long as we keep attacking and killing, and blowing up lots of people, the economy will burgeon. Lots of more bombs will have to be built, lots more planes have to be built, so we can "stay ahead of the competition"!

Ah yes, GODS answer, give us more war!!

Anon

Our economy is a house of cards that is well on it's way to falling down. Or maybe I should liken it to Humpty Dumpty.

Anon: I'm not going to follow you into the Bush-War theme here, but I'd offer these thoughts: (1) I own a small chain of retail stores with annual sales totalling about $3 mil. We clawed our way to an increase of about 2% this season vs 4% last year which jibes pretty closely with the big players. A difference is that our increase takes into account the discounts we had to offer to make those sales. Later in January you may find that Wal-Mart or Gap had positive sales number but only by sharply cutting prices: sales: but near, at or below cost; (2) I paid my first visit ever to a Toys-R-Us store yesterday (looking for the ever-elusive Balderdash cards needed to join another site). No luck but I was astounded at the mountains of inventory they had left over. (3) My minor in college was in economics, so "a little knowledge can be a dangerous thing." You are right about the consumer being the only player keeping things chugging along. With all or most of the mortgage refinancing having been done, and when the credit card bills hit the fan in January, things could get bleak.

I've seen your name lots of times in abuzz forums and you have likely noticed ccpoodle. I think the ecconomy is suffering from decades of bad ledgislation, rich and powerful who have trouble thinking beyond the next quarter and longterm harmful moves that stimulate the ecconomy short tem. Is it posible we have exhausted our bag of tricks to restore the economy even one more time? Does the public still buy the lies the media has told us daily for decades? It does not seem that Democrats are any better than Republicans. Would confidence rise if we elected lots of Libertarians, or would most people freak out if they heard politions tell the truth? Neil

Politicians who tell the truth would never get elected.
People do not want to hear the truth.

A Happy New Year To Us All...I don't know who Neil was aiming his comments towards,,,but I'd like to talk to au1929:
Am I correct in assuming that the 1929 part might have been your year of birth. If so, you've got 17 years on me. If not, this whole argument is for naught. Someone born in 1929 would have been old enough to feel the Great Depression and to understand, perhaps even participtate, in WW2.
Fast forward to 1968 when this dude was sent to Vietnam.
I recently caught myself saying to some of my employees who had put some "music" into the player at my store: "How can you listen to this? Do you call that music?" But then I started listening to some of it. I won't say I like it...
So, in one of the final hours of this year, I would gently suggest that the government is not incompetent, the media is not totally biased; business isn't completely corrupt; kids aren't totally clueless
etc.
-rjb-

realjohnboy
Correct 1929 is the year of my birth. And au stands for august not gold as some seem to think it does. Yes I remember the great depression and of course WW2. My brother and all my older cousins were in some branch of the service. I also remember the Korean war during which I served. What is your point?
Now let me wish you and yours and all a2k members and their families a happy, healthy and prospreous New Year.

NEW YORK - Stocks extended their slump Friday amid growing doubts about the economy, delivering the worst weekly loss to the Nasdaq composite index in well over a year. Other market indicators also posted steep losses for the week.

The Dow Jones industrial average closed down 30.88, or 0.3 percent, at 9,313.08, after losing 81.55 Thursday. The Nasdaq composite index fell 25.17, or 1.4 percent, to 1,792.07 following a loss of 26.46 the previous session. The Standard & Poor's 500 index declined 6.42, or 0.6 percent, to 996.85 after losing 6.11 Thursday.

Positive news about better-than-expected economic growth in the second quarter was overshadowed by a poor showing in consumer confidence and unease ahead of the third-quarter earnings season. Stocks were also vulnerable to selling after a runup in prices since the spring.

"What we've seen here is the market starting to distrust the durability of the economic recovery," said Charles H. Blood Jr., senior financial markets analyst at Brown Brothers Harriman & Co.

"The most cyclical and volatile stocks, which had been leading the way up, also declined," Blood said. "What's more, the bond market rallied and expectations for an interest rate hike were pushed more into the future."

The Nasdaq suffered a weekly loss of 6 percent, its biggest one-week decline in 17 months or since the week that ended April 26, 2002, when the index lost 7.4 percent. Analysts said tech stocks took the biggest fall this week because they had enjoyed the greatest gains in the rally that began in March.

The Dow ended the week down 3.4 percent, its largest weekly loss in six months, or in the week that ended this past March 28, when the blue chips gave back 4.4 percent. For the week, the S&P 500 dropped 3.8 percent, its worst weekly percentage loss in eight months, or since the week ended Jan. 24, when the index fell 4.5 percent.

Stocks struggled to find direction early Friday but slipped later in the day, continuing a trend from the previous two trading sessions. Investors are questioning whether stocks rose have risen too high given lingering doubts about the economic recovery.

Those doubts were fanned Wednesday by OPEC's announcement it would cut oil production. On Thursday, investors focused on a report showing a larger-than-expected drop in durable goods orders.

The latest news about the economy was good Friday. In a report released before the start of trading, the government said the economy grew at annual rate of 3.3 percent in the second quarter, better than expected.

The increase, which beat analysts expectations, was revised upward from an earlier 3.1 percent estimate, and may signal that the country is poised for a sustained rebound from the recession that technically ended in late 2001.

But the good news was tempered by the University of Michigan's reading on consumer sentiment. That measure declined, according to Dow Jones Newswires, falling moderately below analysts' expectations, in a sign of consumers continued concern about the weak job market.

Shannon Reid, a money manager with Evergreen Investments in Charlotte, N.C., said the market's tone had been negative all week after finance ministers put pressure on Japan and China not to manipulate their currencies to their advantage.

"I think that gave a market that had already had a big run an excuse to have a breather," Reid said. "The bulls don't feel it's time to step in yet, so we haven't seen much support."
Copyright 2003 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

There is another factor involved in the selloff of stocks. And that is the drop in the value of the dollar as a result of some adjustments in the worlds money policies. I did not go into the changes however, I read some predictions that there would be a selloff as a result of the changes and that before it occurred. The US has been pushing for a lower dollar to help our manufactures compete with off shore vendors. Specifically the Chinese who have kept the value of the yen artificially low.

new US jobs?

American factory workers compete against China, where labor costs are only 5 percent of those in US.

By Ron Scherer | Staff writer of The Christian Science Monitor

NEW YORK – Under President Reagan, the United States pulled the rug out from under the US dollar. But President Clinton's team supported a "strong" dollar policy. Now, President Bush's treasury secretary, John Snow, is talking about the need for "flexible" currencies - and the dollar is falling.
What's going on here?


Related stories:

07/28/03

US prods China to boost its currency for fairer trade



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Almost every administration wants to leave its imprint on the currency. It all depends on what the US economy is doing at the time. If the economy is lagging - as it is now - administrations want a weaker dollar to promote exports and create jobs. If the unemployment lines are short, treasury secretaries like a muscular dollar, which allows consumers to buy products from abroad for less money.

"This administration never said it was for a weak dollar, but they are clearly concerned about the lack of employment growth," says Paul Kasriel, an economist at Northern Trust Company in Chicago. "There is a lot of pressure from the manufacturing sector and labor."

That pressure is particularly strong with the Chinese currency, the yuan, which is pegged to the US dollar.

Many American companies are moving their manufacturing to China where the labor costs are only about 5 percent of the cost of labor in the US. As a result of this stampede, the US trade deficit with China is now running at $130 billion a year - a record for any country.

At the same time, the yuan has not been revalued since 1995, when the Chinese economy was much smaller and weaker compared to today. Business groups argue that the Chinese should raise the value of their currency by 30 to 40 percent compared to the dollar.

The Chinese have already rejected this concept.

"I think they are telling the truth," says Don Straszheim of Straszheim Global Advisors in Santa Monica, Calif. "I don't even think they will revalue next year."

Instead, he says the Chinese goal is to let their currency begin floating as their hosting of the 2008 Olympics gets closer. "They want to be known as a full-fledged member of the global economy, and a necessary condition of that is to have a freely floating currency."

Another reason the Chinese are reluctant to revalue, says Mr. Kasriel, is that their overall trade surplus with the rest of the world is narrowing. China has now become a major importer of raw materials and parts to assemble for goods shipped to the largest consuming nation - the US.

"This means countries like Chile - which are exporting copper to China - are starting to benefit from the Asian economies," says Kasriel. "And, the Chileans may want to buy something from the US which will help our exports."

Any help on the export front is welcome, since the US is now borrowing about $1.5 billion a day to finance its trade and budget deficits. Thus, there is also pressure to keep the dollar attractive because most of the lenders are foreign governments. As of 2002, foreigners owned 31.5 percent of US Treasury securities. And, of that ownership, 40 percent is held by Japan and China.

Since September 2002, the US dollar has declined about 30 percent compared to the euro and nearly 20 percent compared to the yen. This makes it more expensive for Americans traveling to Provence for a holiday or buying a new Lexus. However, it makes US corn and soybean exports more competitive and makes the US a more attractive place to visit for Europeans.

Some economists expect the US dollar to keep falling. Earlier this year, there were some estimates that the dollar would have to drop another 15 to 20 percent to further encourage US exports. David Wyss, chief economist at Standard and Poor's, thinks that prediction is still on track.

"We've had five years of an overvalued dollar, now we're headed towards an undervalued dollar," he says.

If the dollar does fall some more, the rate of change is important. A sharp drop could scare investors, particularly in the bond market. Some of this uncertainty is already reflected in the rising price of gold.

"If the fall is orderly, it is modestly beneficial to US manufacturers," says Mark Vitner, a senior economist at Wachovia Securities in Charlotte. But he warns there may be some "rough" days ahead for the greenback when the dollar falls sharply and bond market investors scramble for safety.

A moderate drop, on the other hand, should help take some pressure off US companies' bottom lines. They will be able to raise prices - something they have not been able to do for years. "This may mean we'll have higher inflation and higher interest rates," says Mr. Wyss.

Higher interest rates won't be good for the stock market. However, as Wyss quickly points out, corporate earnings might improve. This could raise equity valuations. And, inflation won't be a big problem, since inflation rates are at 40-year lows, he says.

In fact, many economists don't see the dollar as having long-term problems. The European economy is in worse shape than the US. And, it's still not clear if the Japanese recovery will last. "Fundamentally, dollar investments are not as good as they used to be, but they are still better than most others" says Wyss. Adds Mr. Vitner, "I think people are too bearish on the US economy."

The Economy is at an all-time HIGH.
Do your own searches of any available and credible database.
By every measure the economy is stronger than it ever has been under any administration in history...by any measure. (There are some sore-loser, Dem egg-heads who are a true embarrassment and who are still holding onto ridiculous "spin" stories that will make you into a totally discredited moron if you choose to parrot this stuff to guileless know-nothings.
Here's a clincher: a large part of all this prosperity is the direct result of the Bush tax cuts. Want to look like a total schmuck? Keep knocking the Bush tax cuts! Duh!
Now Hear this: Tax Cut Badmouthing Hurts the Dems.

The Economy is at an all-time HIGH.
Do your own searches of any available and credible database.
By every measure the economy is stronger than it ever has been under any administration in history...by any measure. (There are some sore-loser, Dem egg-heads who are a true embarrassment and who are still holding onto ridiculous "spin" stories that will make you into a totally discredited moron if you choose to parrot this stuff to guileless know-nothings.
Here's a clincher: a large part of all this prosperity is the direct result of the Bush tax cuts. Want to look like a total schmuck? Keep knocking the Bush tax cuts! Duh!
Now Hear this: Tax Cut Badmouthing Hurts the Dems.

And Bush continues to blow smoke about an improving economy. He claims it has turned the corner. That corner it seems is a U turn heading in the wrong direction.


http://www.nytimes.com/2004/08/07/business/07econ.html?th