-
Please take a moment and update your account profile. If you have an updated account profile with basic information on why you are on Air Warriors it will help other people respond to your posts. How do you update your profile you ask?
Go here:
Edit Account Details and Profile
The Fundamentals of our Economy are Strong!
- Thread starter raptor10
- Start date
FormerRecruitingGuru
Making Recruiting Great Again
For those who are too lazy to read all that, what does it all mean?
Umm....huh? Where are you getting this from?
Not saying the fundamentals are not sound, but inflation isn't 0%, even in a healthy economy, inflation is never 0%; a low level of inflation is necessary for a healthy economy I believe. GDP growth was up but who knows now, as for unemployment, it's around 6%, higher than it should be, not a drastic number though; many European nations have even higher unemployment rates as their normal unemployment rate for example.
Of course, inflation is not actually zero, but in a slow economy you expect to see a low inflation rate (and it has been until recently). The fact that the Fed didn't cut interest rates this week suggests that they are seeing an up-tick in inflation (the Consumer Price Index was up like 5%+ YTD last month).
As far as other indicators go, unemployment is still sky high @ 6.1%, but economic growth picked up a lot in Q2 after a very low Q1 growth rate.
The guy in the article is comparing our current economy to the economy during the great depression. He doesn't say "The Fundamentals of our Economy are Strong!", more like 'The fundamentals of our economy don't suck too bad.'
As far as other indicators go, unemployment is still sky high @ 6.1%, but economic growth picked up a lot in Q2 after a very low Q1 growth rate.
The guy in the article is comparing our current economy to the economy during the great depression. He doesn't say "The Fundamentals of our Economy are Strong!", more like 'The fundamentals of our economy don't suck too bad.'
WRONG!!!!Article I posted said:
He does say that (albeit without the exclamation mark because he isn't Tom Wolfe like me)
The editor wrote that...it's not a quote from the expert. Think for yourself, read what the expert said, and do some research.
Re-read my other post, everything in there is a fact except the last sentence, which is my opinion.
I believe the editor worded the dek pretty carefully to align with the gist of what the expert was saying - namely being that the only time when we have had a greater hit to our financial markets was during the Great Depression, yet the effect on our real economy, our GDP, has been marginal (and in fact GDP has increased). The only way this could be the case is if the truth is much closer to the fundamentals of our economy being strong, vice "not sucking bad."
Does that make sense?
Does that make sense?
Here's what I took out of it (as a non-financial, every day guy)
"One thing that the secretary and the president were trying to do was say “don’t panic,” which I think was right. The economy is basically in good shape, meaning our capacity to develop goods and services. Although a lot of people have lost a substantial amount of financial wealth, that’s a paper loss, and doesn’t really impact the economy as a whole. It would be wrong for everyone to start panicking. "
My reaction...I increased my allocation to TSP from 6% to 8% so I can buy more stocks at a cheaper price...
"One thing that the secretary and the president were trying to do was say “don’t panic,” which I think was right. The economy is basically in good shape, meaning our capacity to develop goods and services. Although a lot of people have lost a substantial amount of financial wealth, that’s a paper loss, and doesn’t really impact the economy as a whole. It would be wrong for everyone to start panicking. "
My reaction...I increased my allocation to TSP from 6% to 8% so I can buy more stocks at a cheaper price...
Except this belies a fundamental (ha!) misunderstanding of the way that the modern US economy works, which is to say on credit. Think of credit as the grease/oil that keeps the engine moving along. What's going on now is major banks have gotten so heavily involved in the failing housing market that their other businesses, such as lending to manufacturers, etc. are in danger of failing as well. The losses on the investment side are so big as to wipe out the other subsidiaries. Without anyone to extend lines of credit, businesses expand less, hire less, fire more, with predictably disastrous results. That's what people are panicking about. Had AIG gone under, it would have had disastrous effects on the world economy, since just about everyone who's anyone depends upon AIG in one way or another.
You are wise . . .
Us young guys should hang on to what they have. I've taken a significant hit from Wachovia going from $55/share (probably overvalued) to around $10. Who cares? I'm not planning on selling it anytime in the next 40 years. THAT's the market I'm concerned about. The one around 2048!
Ya here's the think about editors (and most Americans)...they don't understand economics. I read an article recently where the headline was something like 'Highway Revenues Plummet as Result of Lagging Economy'- I read the article and it turns out they decreased by something like 3%... Editors write those to draw you in or make whatever point they want...take it for what it's worth-not much- and go off what the expert is saying.
Uh, keep trying... Comparing this to the Great Depression is like comparing our fighting in Bosnia in the '90s to WW2.
We did experience a decrease in GDP in Q4 of last year and a very sluggish growth rate of .9% in Q1 of this year. The economy has been having a hard time...not as bad as the '30s, but that's because the hit to the markets is a fraction of what it was then.
There's no way around it...your analysis is wrong- the fundamentals of our economy are not strong(!), they do seem to be improving though. Based on some of your past posts, it seems like you're a Poli Sci guy, not an Econ guy...I suspect you posted this article with the election in mind. Be careful with that, people often draw (very) incorrect conclusions from economic data for political reasons.