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U.S. GDP Growth Replies |
HenryTo
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 Posted: Wed Feb 15, 2012 12:22 am Post subject: |
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Bridgewater on US economic growth.
| Quote: | | US growth has clearly been strong in recent months, though household demand stats have recently been more mixed than the rest of the economy, and there are some indications that demand is beginning to weaken. For most of the last two years household spending growth rates had been running significantly stronger than income growth, with the gap being financed by a drop in the savings rate. At least for the last two months, the gap has been closed and the savings rate has stabilized. Some of the improvement in demand in recent years has flowed through to a modest improvement in incomes, though most of the closing of the gap over this short period has been through weaker nominal demand. It is still too early to tell if demand is actually slowing much, as other measures of demand such as confidence surveys and real measures of household spending have held up much better than nominal spending. But to whatever extent the slowdown in demand is actually occurring, it will likely result in a broader moderation in growth as the effects flow through to production and employment. Tuesday’s January retail sales report was one small data point that was consistent with some moderation in demand. |
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rffrydr
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| Posted: Fri Jan 27, 2012 10:29 pm Post subject: |
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With nominal retail sales up almost 8% there's more to be (re)written on this sector. Auto (again) flatter the inventory but 12% drop in Defense exactly what we want to see on the Deficit scene.
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HenryTo
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| Posted: Fri Jan 27, 2012 9:25 pm Post subject: |
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Bridgewater on the 4Q US GDP growth number.
| Quote: | | The most significant aspect of the fourth quarter GDP report was the weakness in nominal demand. Nominal final sales rose by only 1.2%, among the weakest quarters in the past 50 years and the weakest non-recession quarter in that period. Nominal final sales represent nominal demand, which is the amount of money spent on stuff produced in the US and drives nominal income. In a deleveraging you need to get debts down in relation to income. Rapid growth in nominal income eases the pain of deleveraging and speeds the process by raising income in relation to debt, while slow growth in nominal income makes the deleveraging process more painful (i.e., more defaults) and prolongs it. If sustained, this low nominal spending environment would reinforce the likelihood of zero interest rates and intermittent QE for many years, perhaps decades. Nominal demand in the fourth quarter would have been even weaker without the decline in the savings rate. The 1.2% growth in nominal final sales breaks down into a weak 0.8% growth in real final sales and a paltry 0.4% rise in the sales deflator. The following chart shows the quarterly growth in nominal final sales since 1960. |
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rffrydr
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| Posted: Wed Jan 18, 2012 10:08 am Post subject: |
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..On the same day the World Bank comes out and tells us we're in the xxx: global growth revised down to 4.X% vs 7.X%.
Clearly there is still plenty of bearishness in the face AAII "opitmism."
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HenryTo
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rffrydr
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| Posted: Fri Jan 13, 2012 8:25 am Post subject: |
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| rffrydr wrote: |
...but doom marches on, 'cause it's comin.' And we've already been down visiting '09 lows in cylicals, and worse in banks. Doom is always out there somewhere, but there's one guy who's for real, Santa  |
The new year's rally in cyclicals has done little to dissuade the prevalent macro view: govt was behind all growth last year and now it's over...and so is growth. We can't all deleverage at the same time! There's a more macro macroview however, "time heals all wounds." In the fullness of time.....
See: "Paradox of Thrift"
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rffrydr
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| Posted: Fri Dec 09, 2011 11:32 am Post subject: |
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| rffrydr wrote: | Maybe we're all marching over the cliff, iPhones clicking away, but I'm more inclined to say: What if Wall St. gave a Depression and Nobody Came.
At any rate who wants to invest in a booming economy?
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---Sept 8
| Quote: | Consumer sentiment rose to its highest level in six months in early December due to signs of better labor conditions and an improving outlook on the economy.
The Thomson Reuters/University of Michigan’s preliminary reading on their overall index of consumer confidence climbed for a fourth straight month to 67.7. This compared with 64.1 in November and a low of 55.7 back in August. |
...but doom marches on, 'cause it's comin.' And we've already been down visiting '09 lows in cylicals, and worse in banks. Doom is always out there somewhere, but there's one guy who's for real, Santa
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rffrydr
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| Posted: Fri Dec 02, 2011 7:47 am Post subject: |
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13.6 million rate on cars this month. Weren't we supposed to be under 10 by now? Auto stocks sure priced for that.
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HenryTo
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rffrydr
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| Posted: Tue Nov 22, 2011 6:31 pm Post subject: |
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Here the unvarnished pessimism in gory detail on today's GDP numbers--for which consumption figures remained unchanged and is being disingenuously projected forward.
http://media.bloomberg.com/bb/avfile/News/Surveillance/vv8rTMJiNlfs.mp3
What's missing? What drives all recoveries? It's not the consumer--it's the consumer recreated. Govt. is another story. This guy despite all, still has 3%, Time will tell.
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HenryTo
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| Posted: Tue Nov 01, 2011 11:16 pm Post subject: |
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Bridgewater still bearish on U.S. GDP growth:
| Quote: | | While US production growth has been only moderate, it has been holding up overall growth as it has been stronger than other segments of the economy such as household demand. For a few months, business surveys have been weaker than actual production growth, suggesting that businesses don't expect to continue producing at the current pace. Tuesday's mediocre ISM report continued this trend, as it came in at 50.8, indicating barely expanding production. Most of the support to production in recent months has come from extremely strong business fixed investment, which looks inconsistent with everything else happening in the US and global economy. Consistent with this, forward-looking surveys on investment plans also suggest a considerable slowing is likely in coming months. This raises the odds that business fixed investment and production will slow in the months ahead, removing one of the few supports to US growth. |
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rffrydr
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rffrydr
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| Posted: Thu Oct 13, 2011 8:03 am Post subject: |
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Trade numbers re Europe: For August, exports to the EU increased from $19.3 billion to $22.4 billion in 2010. July data showed a YoY increase from $18.8 billion to $21.4 billion. For the YTD periods, exports increased from $154 billion to $177 billion.
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rffrydr
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rffrydr
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| Posted: Tue Oct 04, 2011 1:52 pm Post subject: |
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Been six months singing that song...and it might happen. But, as with most of this Depression, it's all on the come.
| Quote: | .....data were pretty much studiously ignored or explained away to such an extent that TMM are beginning to wonder if Alessio Rastani is actually representative of many more than we thought, with all secretly hoping for a recession to serve their own nefarious purposes.
The UK Government wouldn't mind a recession as a justification to its spending cuts (Osborne highlighting the severity of the economic downturn yesterday). Meanwhile the Labour party wouldn't mind a recession to prove how wrong Tory policy is. Every socialist-leaning government in the western world would like a recession as further reason to neuter the banks. On balance most of the blogosphere would like a recession so that they can cheer "told you so". Every holder of Gold ETFs and physical outside of central banks wants a recession to justify their holdings. Sell-side sales folks, rather short-sightedly, seem to want a recession as it means they can scream "not since the last time" a lot and charge wide spreads. Buy side analysts want a recession as they have learnt in 2008 that being contrarian gets you noticed, they just haven't noticed yet that being bearish is now consensus. Is there anyone apart from normal folks with normal jobs, who can't control whether there is a recession or not, who don't want a recession? |
Here's another scenario. Autos dominate production stats and they're operating off the bottom, 6% replacement rate of 250m cars, which are being bought to SAVE money. There's no cliff to fall off of. Housing is housing. Xmas is coming. $75 crude with $100 Brent will not only rip down biggest drag on exports it will PROMOTE it. Yes, we are now an oil exporter. Dollar snap back will INCREASE exports and foreign investment in US RE, as deflation created its own lassitude. Govt spending is going nowhere soon--which means it isn't going away. No-one wants loans, NO-ONE, so no-one is being hurt by credit contraction. Likewise there's no assets being borrowed against since the only asset they have access to is their used car--selling at historic highs! And the circle is complete!
De-Carry is a killer--especially when it couldn't happen without higher rates! But leverage is priced in bux, baby. It's a yin/yang thing.
PS with Dow down 222 this moring all the auto sector was up 3%. I'm not looking for $100 SP earnings this year either....we don't need $100.
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