America's Economy

Open letter to ATS'ers:

It's a funny thing. A few months ago just about every post on recent posting board was about how the American economy is going to hell in a hand basket. Where is everyone????? Why did you all stop posting how the rest of the world was going to kick our ass into oblivian?

I posted a few weeks ago with this:

www.abovetopsecret.com...

I got some pretty good and pretty bad feed back for and against that post, but some of the U2U's were a little mean.

I just want everyone to realize that America is not going broke. I am not so sure about some other places around the world. I know things are getting tough in places in Europe right now. And alot of that has to do with the high rate of the EURO over there. You might not realize it now, but its the EURO thats causing some of those problems. Look at Germany for example, they have the largest economy in Europe and they are struggling severely right now. WHY? they do their business in EURO's, making their goods extremely expensive making it very hard to compete. Thats one nation that would do better to get rid of the EURO and bring back the German Mark. At least they could have some control over their own currency allowing them to compete better in the world. I posted something about it here:

www.abovetopsecret.com...

That thread actually went no where, I would ask you to reconsider the idea.

I have said repeatedly that when the US sneezes, the rest of the world catches cold. I am not saying your going to get sick and die, but don;t be so quick to think your all better off than us. We have a tremendously strong economy here thanks to the rest of you buying our goods, and we thank you all for that. What our problem right now is our domestic markets. As far as I am concerned we have been in a consumer recession since December. There is actually no such thing as a consumer recession, but thats what I would label it. This is a tough thing to point to, as a recession is defined by certain exact data. Data that does not yet point to a recession. That data is slightly off as it does not define itself correctly. If you examine the recent GDP number we actually had negative growth, but it was actually positive due to increased costs of the goods it measures. So....no recession. Thats what wrong with government figures...they mean nothing to me. I would rather go to the store and count the people walking in, then counting the people who actually purchase goods. Watch who buys with cash and who with credit.

For the last 6 months the US have been importing inflation, thanks to our sagging dollar. We have been EXPORTING our recession. I am sorry about that, but thats what happens in times like this. AND since you are all exposed to the American economy either by buying our goods or selling goods to us, its bound to happen. Well, our dollar has bottomed and is slowly creeping back up. We might not get back to parity right away, but with our recession slowly leaking to all countries around the world right now, don;t be surprised if it happens around this time in 2009.

If our economy does again stall..we will then see the second stage of a prolonged recession, the corporate recession. This will be brought about by the growing recession around the world and the failure of the US consumer to climb out of their hole. That will finally show up in the GDP numbers. If that happens it will be a long cold winter around the world, not just here. I do not believe this will happen and I thank the rest of the world for that. You have been greatfuly supporting our largest companies, making them foreign companies within our own borders. Over the last 2 years, companies like Hewlett Packard, IBM, GE, United Technologies..... have seen 60%+ of their revenues come from over sees. You have saved our largest companies from feeling the recession like environment you would think was crushing all companies the way you all boasted in here. Now, these companies can turn and benefit from selling again to the likes of American Companies and companies and consumers from around the world. All the time, you will see some of those companies hurt by our recent woes also making comebacks.

Do not fear, we are Americans and we will do our best to support your companies in the coming times of need. As your currencies will be coming down in value, we can use our strengthening dollar to buy your goods as they will once again become more competitive here. We will support you as you supported us, well maybe not how you supported us on the boards of ATS, but how you supported us with your pocket books and wallets.

I am sure a lot of you will be out there ready to flame me for my views here, but I am going to let the process work out. So should you. Wait a few months. IF I am wrong come back on here and shout me down. Call me out on what I say and I will admit it and APOLOGIZE for being wrong. For now, just look around you and realize...things are not that bad any more here. AND THEY WILL NOT STAY BAD WHRE YOU ARE, if your over seas.

You can yell and scream about China all you want, but I have tons of dealing s with Chinese companies in my business (not what my name implies either). I am in risk managment now and deal with a lot of importing and exporting of goods around the world. I get the books for Chinese companies all the time as they are our trading partners. I don;t believe half of whats written in their financials and believe even less of what their CEO's tell me. I am a firm believer that if their accounting standards were half as stringent as they are in the US, half of their companies would make Enron look like small potatoes.

Well, I hope you all have a good day or night (depending where you are), and please continue to buy American. We will return the favor.

Time for bed.


-John

And despite the ignorant threads on here, the US economy is not yet in a recession as it gre by 0.7% this last quarter. Yes that is small, but its expansion, not recession.

reply to post by princeofpeace


In all honesty, the expansions was only due to the inventory levels and the increase of costs associated with buying goods. The actual physical number of units decreased in the period but due to the cost associated with them, it looked like expansion. I am trying to toot America's horn, but we can't lie about the facts. Despite what most people try to do.

Thats it? No comments??

This lovely little tidbit just crossed the wires this evening. A sure sign that the credit crisis is over.



Bank of America May Withhold Guarantee on Countrywide's Debt

May 2 (Bloomberg) -- Bank of America Corp., the second- biggest U.S. bank, said it may not guarantee $38.1 billion of Countrywide Financial Corp.'s debt after taking over the mortgage lender, fueling speculation that Countrywide's bondholders face renewed risk of default.

BoA must've figured hell JPM got around $50 Billion of taxpayer money (the $29billion for the buyout and the 20 something billion that was arranged before that fatefull weekend that only came out during congressional hearings) why should we have to pony up nearly 40 Billion after we stepped in and bought that PoS and JPM got taxpayer funding for assuming Bear Sterns debt. I think alot of that is debt from the Atlanta FHLB, bet I know who's gonna end up paying for that I see him every morning while shaving.

Trader, I wish I could be as optimistic as you but when I look at our debt-personal, corporate, and gubberment-I just can't be. I think we may already be at the point where the debt service on personal debt is more than many can handle and only a matter of time before it gets that way for .biz and .gov.

I've never bought into decoupling (no one to replace the American consumer) so I think we're screwed but the rest of the world is screwed worse.

I dunno,
When it comes to either

Believing BUSH

or

Believing Warren Buffet,

I know where id stand.

Also, they arent cutting interest rates.. AGAIN because things are peachy.
They arent holding secret behind doors meetings on the economy, because things are peachy.

foreclosures arent sky rocketing because its a new fad... and these cheques being posted out arent because of good will.

You cant spend

$600 BILLION on a war
while cutting Tax's
and funding corporate greed

you cant cope with oil at $120 per barrel, and RISING
you cannot cope with many more nations dropping the dollar peg.

Its taken a long time for the economy to start going down hill fast, and I laugh so hard at the people who claim its back on track in a matter of weeks because figures released have a .02 positive aspect.

Lets wait until AFTER these cheque's have been paid out.
Lets wait for more Iraqi oil lines to be cut, for more oil stations to go offline, and for countless more billions be wasted in Iraq.
Along with the presidents 27% approval rating, and the foreclosure rate of American homes continually rising, i think its safe to say, Americas superpower days are numbered!

and thankgod for that.
Who would want american as a leader anymore when you look at the last 8yrs.

Just want to say I told you so!!!!!!!!!!!!!!!!


www.bloomberg.com...

reply to post by Agit8dChop

I agree with pretty much all of what you posted, but I do have one thing to add: apparently those rebate checks are doing some temporary good after all. I just found out that we are experiencing a surge in sales at the stores I haul for, just after the checks started going out.

Don't get me wrong; I think it will be only temporary. But at least it's a minor delay in the inevitable collapse.

To the OP: Keep trying to keep people's hopes up. It can't work forever this time, but the longer it does help, the better off I'll be.

TheRedneck

I recently found thisTreasury press release and can't find a single positive thing in it. Just lots of the following

In fact, several members argued that the current deterioration in the fiscal outlook might be more than temporary and that the risk of further deterioration outweighs the risk of a surprise improvement in the deficit.

The majority of members believe that the addition of the year bill combined with increases to the size and frequency of existing coupon debt over coming quarters will still not be sufficient to satisfy the increased financing needs of the Treasury over the intermediate and longer term.

That's not a document that is dated or aged, and I'd wager that most of the people preparing it had sneak peaks at just released economic data.

Trader I know your post is about the dollar and other issues, but could you point me to one thing that either Bush, Paulson, or Bernake has done in the past year to strengthen the dollar other than saying "we believe in a strong dollar policy" (Bernake won't even speak to the dollar, under oath anyway though he arguable has the most influence over it). I believe in the end of the world (for example, the sun will swell and it will end one day) but I'm not doing anything to make it happen. I don't disagree that there could be some dollar strengthening but I think it'll be more of a case of we're screwed but lots of other folks are screwed worse.

IMO WST you either haven't been around or watching your nightly news. Foreclosers, homeless, and food pantries are unable to keep up with demand. Jobs are like hens teeth and gas prices has us all straddling the barrel. I can say 'feel good, happy place' all day and it doesn't change the circumstances. One in seven in Ohio on food stamps, one in six in WV and KY.
Glad you were able to get your 'I told you so in though'. Let's chat again next quarter.

[edit on 5/3/2008 by jpm1602]

I guess I have a different perspective on the Dollar.

As this 3yr chart reveals...since the beginning of the current down-leg at the end of 05...every back-tic-rally has failed at the 90 day moving average (black arrows). Now, the Dollar could rally all the way to stiff resistance at 80...but the inflationary fundamentals simply don't justify it. I think the odds still favor the dominant trend...meaning a fizzle around 74...or...at overhead resistance 75. Presently: USDX 73.50

The pull-back, if it happens, could coincide with the EuroZone policy meeting next Thursday. The ECB is expected to remain on hold...based upon [justifiable] inflationary concerns. This could position the EUR/USD for a re-test of 1.60 within the next month, or so.

Unlike the US Fed...the ECB appears to be serious about it's anti-inflation mandate. Even with the temporary breather in commodities, and the 'rumors' of a Fed pause...I'm just not seeing any fundamental support for a major, sustained, trend reversal in the Dollar.

I apologize for the small print



*90-DMA **50-DMA


Edit: Housekeeping

[edit on 3-5-2008 by OBE1]

Either way the US economy is still NOT in a recession however there are a lot of idiots on here that have been posting for months that we already in one.

Star for you trader... I always enjoy reading your posts.. Im not a finance wiz, but ive learned a thing or two from you...

I remember all those threads and the posts that were almost gleeful in the hope that the US would fall economically.. where are they all now?

I enjoy reading traders posts as well, though I agree with little. I can't argue with the recent performance of markets though. Where have all the doom and gloom economic posts gone? Well here's one I wrote last night.

www.abovetopsecret.com...

Trader correctly states that the weak dollar has helped large multi-national corporations keep their earnings up. This has particularly helped big blue chips like IBM, Caterpillar, Boeing, Coke, and others with lots of international exposure.

I personally do not believe that economic reports are very acurate. Kudos to trader for aknowleding the 1Q GDP numbers and why they stayed barely positive. I think I've also read that there is a +/- 1% margin of error in the GDP report.

I personally believe the employment numbers are utter bullcrap. First they are regularly revised even in less chaotic times. Second, even the shills on CNBC were scratching thier heads about the supposed increase in financial service jobs reported for April. Unless all those job losses from the banks and brokers laying off are immediately moving into collections/mitigation type jobs with tons of people entering the industry as well I just don't see how that number could have been positve. Third the Birth/Death adjustment makes no sense to me. That is something that is supposed to estimate the creation/elimination of jobs by small businesses that aren't covered in the surveys they get employment numbers from. Is anyone seeing small businesses popping up and hiring folks? Fourth, all the illegals in the job market (particularly housing, hows that going?) haven't been accounted for. Fifth, employment numbers have had to pass through the White House since Kennedy, any report that has to be vetted by politicians is automatically suspect to me.

MORE people agree with ME!!!!!!!!


www.marketwatch.com...

I'm kinda wondering if you read the whole article trader. I can find very little positive (bullish) in it other than that Buffett seems to believe that the danger of systemic risk is diminished (note not over). I've read alot of press on Buffett's remarks during the Berkshire shareholder meeting. They are being spun to be as bullish or bearish as the reporters bias seems to be. I found the following quotes to be interesting.

From Market Watch

My Favorite from the Article

He said the culture of investment banks is in some ways "evil" and counterproductive to the financial health of the U.S.

the risk of a major financial meltdown has declined recently but cautioned not to expect big gains from the stock market in future years.

Buffett rejected the idea of allowing banks and brokerage firms to value complex exposures at the price they originally paid as "an abomination."

From the Heir apparent

Munger concurred: "We are very happy to make money at a rate in the future that's way less than we have in the past and I suggest that you adopt the same attitude."

At the very end of the article he even says Berkshire shareholders who expect the gains of the past to continue you should sell their shares!
Earlier this week St. Warren (Saint of the unfounded bailout/buyout rumor) was saying stuff like this.

From USA Today

the U.S. economy is in a recession that will be more severe than most people expect.

On to another topic trader, what are your thoughts about the currency swaps announced Friday between ECB, Fed, and Swiss Central bank. The two most common opinions I see are that this swap is to meet a need for dollars without putting downward pressure on it in the normal markets. The second would be that a huge bank in Europe, most likely UBS or Credit Suisse due to Swiss CB involvement, is in trouble and needs dollars to unwind some sort of derivative position. I've thought for a bit now that the next systemic shock would originate in Europe.

Now to a third topic? Why is the FED accepting bonds backed by credit card and automobile debt as acceptable collateral at the lending windows recently created? Doesn't that in effect contaminate the Treasury market by saying credit card/auto debt = Treasury debt?

My post is about my opinion.

My link to warren is just proof that the deepest risk is out of the market. Now things can work themselves out.

Funny, I heard reports last night that the worst HADNT been seen yet, because the record foreclosures that are currently happening HAVENT affected the banks.

Homes are still foreclosing
Oil is still rising
and the WAR is still raging.


How can you possibly say the worst is over?

Trader, you must've not visited Ticker Forum like I told you to. The deepest risk is not yet out of the market...not by a long shot. You should head on over there for an education by some of the best financial minds you will find. I'd love to see you debate those guys...

Originally posted by CyberSEAL
Trader, you must've not visited Ticker Forum like I told you to. The deepest risk is not yet out of the market...not by a long shot. You should head on over there for an education by some of the best financial minds you will find. I'd love to see you debate those guys...

And just who are these best financial minds in the world??????? How can you say that? What classifies someone in that matter? 2 years spewing ideas on a blog????