2004 Democratic Primary

[Swing low, sweet chariot. Comin' for to carry me home.]

Weekly Leading Index Rises to ALL-TIME HIGH

01/23/2004  

NEW YORK, Jan 23 (Reuters) - A record number of new mortgage applications pushed a leading index of the U.S. economy to a new high, a report showed on Friday.
The Economic Cycle Research Institute, an independent forecasting group, said its weekly leading index (WLI) rose to 133.1 in the week ended Jan. 16 compared with the preceding week's revised reading of 131.4. The most recent reading is an all-time high for the index.

The index's components reflected broad-based growth across the country's economy, particularly in the housing sector. On Wednesday, the U.S. Commerce Department reported that December housing starts rose at the quickest pace in nearly 20 years.

Separate ECRI indexes suggested that payroll growth will accelerate soon and inflation pressures will continue to remain low.

"This is a return to a 'Goldilocks' economy," said Lakshman Achuthan, managing director of ECRI, revisting a popular term during the late 199os describing U.S. economy's robust -- but not inflationary -- growth.

The annualized growth rate, a four-week moving average that evens out weekly fluctuations, broke a seven-week streak of declines and increased to 9.6 percent from a revised 8.9 percent.
 
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And don't forget, Q4 GDP numbers come out next week - more bad news for Dems!

[Swing low, sweet chariot. Comin' for to carry me home.]

Hey jmfcst,

Care to hazard a prediction of 4Q growth?  I'm guessing 6.2%.  That's just off the top of my head.

I'd say 5.5% +/-1.5%

[Swing low, sweet chariot. Comin' for to carry me home.]

when do the 4Q numbers come out?

Fri, Jan 30th.

[Swing low, sweet chariot. Comin' for to carry me home.]

Mortgage rates reach 6-month low
 
30-year falls to 5.64%, 15-year to 4.95% and ARM to 3.56% with low rates seen through first half.
 
http://money.cnn.com/2004/01/22/pf/yourhome/q_weekly_rates/index.htm

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Leading indicators rise
 
http://money.cnn.com/2004/01/22/news/economy/lei.reut/index.htm

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Jobless claims slip

http://money.cnn.com/2004/01/22/news/economy/jobless/index.htm

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Housing starts hit 25-year high

http://money.cnn.com/2004/01/21/news/economy/housing_starts/index.htm

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Demand for new mortgages hits record

http://money.cnn.com/2004/01/21/news/economy/mortgage_apps.reut/index.htm

[Swing low, sweet chariot. Comin' for to carry me home.]

 I stand by what I said, the numbers you put out are what the WSJ and the likes of Kudlow spins, and I stand by what I have said, the problems I have listed. If you are not parroting spin, ok, but to me, it sounds almost identical to a collum Kudlow wrote recently. The serious economists I have read and the people I know who have been invested in 25+ years realise the warning signs of a economy that depends too much on fiscal stimulus, and too little on savings, and I trust these people far more than I trust the hype.

  Bury myself in my own words, are we not laying on a bit thick? I gave my opinion on 2004 twice allready

I was hoping for a .2 drop, but .1 is still progress.  Still coming along.

Unemployment did drop another .1 to 5.9%; so still going it he right direction.  Just not as fast as expected.

"Not as fast as expected"?!  

FYI - the unemployment rate was expected to be flat and remain at 6.0%, so the 5.9% was BETTER than expected.

We're cool.

But, notice how JNB has repeatedly refused to give an estimate on the current quarter (2003Q4).  LOL!  He loves to spout doom and gloom about the future, but he is unable to acknowledge current conditions.

Instead of saying, "Yeah, Q3 was excellent and Q4 is going to good, but...", he just can NOT bring himself to allow a single ray of sunshine to pass through his lips.

Sad.

This coming Friday, January 30th, everyone is going to know why JNB refused to give a prediction on 2003Q4 GDP!

[Swing low, sweet chariot. Comin' for to carry me home.]

This is a very good presentation by Macroeconomic Advisers, an extremely respected group:

http://www.missouriventureforum.org/Presentations/Prakken_1103.pdf

[Swing low, sweet chariot. Comin' for to carry me home.]

You really like talking to yourself in this thread, dont you.

No, simply pointing out that it seems quite odd that you can give predictions for 2004 but were unable to give a prediction for 2003Q4.  Would anyone listen to the predictions of a weatherman who couldn’t tell you the current conditions?

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<<Throw in enough fiscal stimulus with a combination of artifically low long term intrest rates due to Japan buying US debt to keep the Yen at depressed levels>>

Let me try to explain this to you very carefully:  The Bank of Japan (BOJ) does NOT buy US debt to boost the dollar because relative lower US rates depresses the dollar.  What is going on is that the BOJ is selling yen to buy dollars on the open market, thus increasing the supply of yen while lowering the supply of dollars in an effort to boost the dollar’s value.

As a result, the BOJ is holding a large amount of dollars with which it then turns around and buys US debt (purchased in dollars) in order to earn interest on all the dollars the BOJ is holding.

So, the effect on the value on the dollar of the BOJ purchase of dollars (increasing the dollar’s value) is partly being offset by the BOJ buying US debt (decreasing the dollar’s value).

If you’ll take a look at the pdf link I posted yesterday, you’ll find that the dollar’s value is still well above the level of the mid 1990’s.  In fact the bleeding of US manufacturing is closely tied to the sharp spike in the dollar’s value during the late 1990’s.
 

[Swing low, sweet chariot. Comin' for to carry me home.]

The Japanese cannot allow the dollar to weaken too much against the yen, b/c if it did they would go down even worse than they already have. In reality, they're pegged to the dollar.

Japan is screwed (as are many countries other than the US) because they rely on exports as their engine for growth.  The US is a consumer led economy that generates its own wealth rather quickly.

The public debt of the US is roughly 40% of GDP and is owed in US dollars.  Japan’s public debt well over 100% of GDP.

The US currently has the:
1)Lowest inflation in 40 years
2)Lowest interest rates in 40 years
3)Highest productivity growth in 50 years
4)Highest GDP growth in 20 years
5)Highest home ownership on record
6)Highest business profits (>$1 Trillion/year) on record
7)Hottest housing market in 25 years

The US also has the most nibble economy of any of any of the G8 countries.  And the US is the most technologically advanced country in the world.  The US remains the envy of the world.

[Swing low, sweet chariot. Comin' for to carry me home.]

Throw in enough fiscal stimulus with a combination of artifically low long term intrest rates due to Japan buying US debt

One further note:  US interest rates are currently IN-LINE with what is prescribed by the Meyer version of Taylor's Rule.  Thus, they are NOT "artifically low".  

We have the lowest inflation in 40 years and the lowest interest rates in 40 years.  

Simple.

[Swing low, sweet chariot. Comin' for to carry me home.]

Existing home sales surge
 
Sales of pre-owned homes, biggest sector of housing market, grow faster than forecast in December.
 
http://money.cnn.com/2004/01/26/news/economy/existing_homes/index.htm

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interesting quote from article: "interest rates have stayed stubbornly low, keeping housing demand high"

This is the second time in a week CNNfn has characterized interest rates as “stubbornly low”.  I’ve always hate going to a “stubbornly” good party, don’t all of you?

CNNfn continues to try to throw a wet blanket on the economy due to CNN’s bias against Bush’s economic policies.

[Swing low, sweet chariot. Comin' for to carry me home.]

Well, your economy is doing relatively well, but let's not overdo it.

Not overdoing it at all.  Simply posting well known facts.

[Swing low, sweet chariot. Comin' for to carry me home.]

Well, your economy is doing relatively well, but let's not overdo it.

Not overdoing it at all.  Simply posting well known facts.

Well, "the envy of the world" and "many countries are screwed" I felt was overdoing it a little.

I didn't know there was any doubt that the US is the envy of the world.

[Swing low, sweet chariot. Comin' for to carry me home.]

2003 Q4 rate of growth in broadest measure of economy healthy at 4%, but half of Q3's pace

Consumer spending rose at a pace of 2.6 percent in the fourth quarter, compared with a rate of growth of 6.9 percent in the third quarter.

Business spending grew at a healthy 6.9 percent pace, compared with a 12.8 percent annualized rate in the third quarter.

http://money.cnn.com/2004/01/30/news/economy/gdp/index.htm

[Swing low, sweet chariot. Comin' for to carry me home.]

Weekly Leading Index Slips  (see 1st chart on opening post of this thread)

01/30/2004  

NEW YORK, Jan 30 (Reuters) - A drop in mortgage applications pulled down a leading index of the U.S. economy, but the growth improved on higher commodity prices and healthy stock market gains, a report showed on Friday.
The Economic Cycle Research Institute, an independent forecasting group, said its weekly leading index (WLI) fell to 132.7 in the week ended Jan. 23 compared with the preceding week's upwardly revised reading of 133.3.

The annualized growth rate, a four-week moving average that evens out weekly fluctuations, increased to 10.8 percent from an upwardly revised 10.1 percent.

"It's clear evidence that the economy will continue to experience above trend growth even in light of this morning's GDP number," said ECRI managing director Lakshman Achuthan.
 
http://businesscycle.com/showstory.php?storyID=612

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Michigan sentiment revised up
 
Closely watched measure of consumer confidence stronger than expected in January.
 
The University of Michigan's preliminary consumer sentiment index for January jumped to a revised 103.8 from 92.6 in December

http://money.cnn.com/2004/01/30/news/economy/michigan/index.htm

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Midwest manufacturing surges
 
The National Association of Purchasing Management-Chicago said its business barometer rose to 65.9 from 61.2 in December, the highest level since July 1994. Economists had forecast the index at 62.0.
 
http://money.cnn.com/2004/01/30/news/economy/napm.reut/index.htm

[Swing low, sweet chariot. Comin' for to carry me home.]

Hey jmfcst,

Care to hazard a prediction of 4Q growth?  I'm guessing 6.2%.  That's just off the top of my head.

I'd say 5.5% +/-1.5%

Hey, jmfcst, hats off to you - 4%, just at the lower end of your range.  Turns out my 6.2% was way too optimistic.

The first ("Advanced") GDP report has an error range of +/- 1%, so let's hope this number is revised upward and not downward.

4% is not good considering the momentum the economy had coming out of the 3rd quarter.  December must have been bad.

[Swing low, sweet chariot. Comin' for to carry me home.]

5.7% unemployment is 5.7% Too High.

I don't know how to respond to such a comment.  Maybe it would help if I pointed out to you that in 2000 anyone with an IQ over 75 could have gotten a job and the unemployment rate was still 4.0%.

Some people are simply unemployable.

[Swing low, sweet chariot. Comin' for to carry me home.]

<<There are many intelligent people who can't find jobs.>>

OK, then hopefully they will match their intelligence with the wisdom to retool their skills in order to make themselves more employable in today’s maketplace.

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<<you are missing the main point which is that we are in, and have been in, a recession since Bush took office.>>

1)Your definition of “recession” is unconventional.
2)The recession started in 2000Q4, BEFORE Bush took office.

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 <<If you look at the facts you see that the number of jobs Bush has lost is the worst in decades. Compare this to the successes of the Clinton administration.>>

Clinton NEVER had to deal with a recession.  The economy was expanding 20 months before Clinton took office and was in recession when he left office.  But I don’t blame Clinton for the recession that started in 2000Q4, it’s simply due to what is know as the “Business Cycle”.

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<<Also, under Clinton, the beginning of fiscal responsibility began>>

You mean when the GOP swept the Congress in 1994.  And the surplus was do in part to all the capital gains the Fed was raking in during the stock market boom.  

Clinton and the GOP congress did seem to make a good team for the economy by hardly being able to pass anything through Congress.

[Swing low, sweet chariot. Comin' for to carry me home.]

Home ownership rate hits new record

The Census Bureau said 68.6 percent of homes were occupied by their owners in the fourth quarter of 2003, up slightly from a 68.3 percent home ownership rate in the fourth quarter of the previous year.

http://money.cnn.com/2004/02/03/news/economy/homeownership.reut/index.htm

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Service sector jumps

Growth in the U.S. service sector accelerated in January, the nation's purchasing managers said Wednesday, beating analysts' expectations.

http://money.cnn.com/2004/02/04/news/economy/ism_services/index.htm

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Factory orders top estimates
 
Dec. gain of 1.1% beats views for growth of 0.2%, helped by strong demand for machinery.
 
http://money.cnn.com/2004/02/04/news/economy/factory_orders.reut/index.htm

[Swing low, sweet chariot. Comin' for to carry me home.]

Bush will lose this election against any Democrat, because Americans know that the economy is bad. Really bad. Joblessness is a serious problem, with no end in sight.

The economy is "really bad"?  "Bad" for whom?  Bad for the record number of Americans who own their own home?

With change comes opportunity.

[Swing low, sweet chariot. Comin' for to carry me home.]

No, probably bad for those who have lost their jobs...people who own their own homes are most likely even Republicans already, or idelogical Democrats.

Home ownership in America is at 68%!  That's much higher than the number of conservatives and/or Republicans.  There is probably another 10% who choose to rent but are indeed able to own a home.  The wealth of America is astounding.

[Swing low, sweet chariot. Comin' for to carry me home.]

I don't believe in trickle down economics.

Good, then go out and start your own business and employ your own workers, then you won't have to worry about waiting for something to trickle down to you.  But most of all, stop whining.

[Swing low, sweet chariot. Comin' for to carry me home.]

That is the reality that I have seen personally. My company has been forced to lay off workers and they have not been replaced.

It is a well known fact that US corporate profits are at an all-time high and are over $1 TRILLION dollars per year.  Yes, some companies are hurting; but overall corporate America is extremely healthy and productive.

[Swing low, sweet chariot. Comin' for to carry me home.]

And what about all these jobs going overseas?

Because you're not as talented as you lead yourself to believe.  There are people in third world countries that can replace you at lower costs and thus they provide more VALUE to the company than you.

If you want to be secure, then equip yourself to add more value to your employer than the next guy.

[Swing low, sweet chariot. Comin' for to carry me home.]

I don't believe in trickle down economics.

Good, then go out and start your own business and employ your own workers, then you won't have to worry about waiting for something to trickle down to you.  

Not a good idea. Most businesses fail.
And don't worry you'll be the one whining soon, because Bush's defeat is almost a certainty.

And that sums up your problem in a nutshell:  You blame others instead of taking personal responsibility for your own success and you are unwilling to take risks.  You want the benefits of success that others have earned through their own initiative and hard work.

"Whoever watches the wind will not plant; whoever looks at the clouds will not reap." (Ecc 11:4)

[Swing low, sweet chariot. Comin' for to carry me home.]

or is it because they can be employed at sub-standard wages?

What "standard" are you using?  Certainly not their standard, for they're very grateful for the opportunity to work.  

What we now call "poor" would have been called "rich" just a few generations ago in America; and it is still considered "rich" by a large majority of the world TODAY.