http://news.yahoo.com/s/nm/20070306/bs_nm/usa_economy_dc;_ylt=AjjWwSz5XQ2cnUEUJpQ6E69v24cA

"WASHINGTON (Reuters) - Factory orders suffered their steepest drop in six years last month and an index of pending homes sales fell, according to data on Tuesday highlighting weak spots in the economy and risks to output.

Separately, fourth-quarter worker productivity was revised sharply lower and unit labor costs soared, suggesting inflation pressure that may make the Federal Reserve wary of cutting interest rates despite worries about growth.

U.S. Treasury bond prices pared losses on the factory data, which economists said could mean businesses might be holding back from spending while waiting for signs of stronger demand.

"That's what got the market more excited, that there may be a more broad-based slowdown in business activity, which could transfer into (weaker) employment," said Cary Leahey at Decision Economics in New York.

The Commerce Department said U.S. factory orders fell 5.6 percent last month and that durable goods orders were revised to an even steeper 8.7 percent decline, compared with the 7.8 percent retreat announced last week.

"The orders report ... suggest that there is a significant loss of confidence in companies regarding new investments," Leahey said.

Non-defense capital goods spending excluding aircraft, seen as a good proxy for business investment, slumped 6.3 percent in January for the deepest decline in three years.

Worry that weakness in manufacturing and housing could spill into the wider U.S. economy were among the factors that spooked equity investors last week and sent markets tumbling..."

for those ARM homeowners crossing their fingers for the Fed to lower the interest rates, ahem... I wouldn't count on it. Can't pull the article (reg required) but here's the headline. Anyway, it's pretty obvious except to investors in risky ventures who think that just because they are about to lose their butts the Fed is going to come in and save them. The Fed is going to let them take their losses.

Bernanke Says Fed Unlikely to Alter Rates at The Washington Post (reg. req'd)

this one pretty much says the same thing:

Don't Expect Fireworks from the Fed
http://www.businessweek.com/bwdaily/dnflash/content/jan2007/db20070118_610618.htm?chan=top+news_top+news+index _businessweek+exclusives

Bernanke is also assigning some personal responsibility to risk-taking here - ie: taking risks is risky and don't expect the Fed to bail you out just because you didn't win your bet:

Bernanke: Toughen up on mortgage giants
http://news.yahoo.com/s/ap/20070306/ap_on_bi_ge/bernanke_10;_ylt=AiW2PhwrKDwXKqcxda1fRshv24cA

"WASHINGTON - Federal Reserve Chairman Ben Bernanke urged Congress on Tuesday to bolster regulation of mortgage giants Fannie Mae and Freddie Mac, and suggested limiting their massive holdings to guard against any danger their debt poses to the overall economy.

Bernanke has previously supported efforts to pare the two mortgage companies' huge portfolios. This time, however, he was a bit more specific and recommended that their holdings might be linked to a "measurable public purpose, such as the promotion of affordable housing... "


he may be smarter than I've been giving him credit for up to now.

It's about time for the next down turn in the business cycle. We've been up for quite a while now.

I ran across this interesting editorial regarding the stock market upheaval of last week.

I'm curious what others think about this.

Stock Market Drop Should Scare Congressional Protectionists

"Remember the 1994 movie Speed? It's the one where a madman (Dennis Hopper) takes a bunch of bus passengers hostage and then rigs the vehicle to explode if its speed falls below 50 mph. That's a pretty good way of thinking about China right now. The Chinese economy is all about speed. It's growing at about 10 percent a year, as it seems to do year after year. But if the economy slows just a bit, lots of bad things will very likely happen. While China is often portrayed as an unstoppable economic juggernaut, the mixed Chinese economy–described by some as "Leninist corporatist"–is full of stresses, inefficiencies, and imbalances. For example, the World Bank has estimated that if Chinese GDP growth fell by just 2 percentage points, 60 percent of the country's bank loans would become nonperforming. A sharply higher yuan–the goal of U.S. "fair trade" proponents–might have just that effect. And this is an economy that needs to create 24 million new jobs a year to keep up with the flood of peasants continuing to pour into cities looking for a better life. Social unrest is already rising in China, and a slowdown would surely make things far worse...

...Given all that, just imagine the effect of a trade war kicked off by a future president and Congress slapping a 27.5 percent tariff on Chinese goods, an idea that has already been suggested by U.S. senators such as Charles Schumer and Lindsey Graham as a way of battling America's huge trade deficit with China. The Chinese economy would tank, as would the economies in Asia that export heavily to China. All that slowing of global growth might well push the U.S. economy into a recession. Making things worse, U.S. interest rates would shoot up as Chinese demand for our government bonds–Chinese already own more than $300 billion worth–dissipated. That would make any slowdown even worse. So are you still wondering why concerns about the Shanghai stock market might contribute to market downturn on Wall Street? What happens to the economy over there matters greatly to the economy here...."

I'm not sure if it's true because it's an editorial but it certainly sounds persuasive and moreso, if it's true, then a worldwide recession is almost a given because the speed of China's or anyone's economy can't last forever... it's subject, as you point out, to ups and downs. Kind of creepy, eh?

But if you think this downturn now is normal, it's not, my opinion. It's related to how much of the rise in our economy has been driven by (increasingly bad) debt. It's going to continue to get worse before it gets better, I think.

The stock market closed up 150 today.....it about as predictable as an wild animal.....

on a day to day basis, absolutely, but trends can be cautiously predicted. that's what investors bet on.

I think it's going to be pretty lumpy and I think when the final tally for the housing bust kicks in with it's defaulted and overvalued mortgages, it's going to have an effect over the foreseeable future.

OMG Spabbers just posted at DA :woot:

:hi: jojo

http://news.yahoo.com/s/nm/20070306/bs_nm/usa_economy_dc;_ylt=AjjWwSz5XQ2cnUEUJpQ6E69v24cA

"WASHINGTON (Reuters) - Factory orders suffered their steepest drop in six years last month and an index of pending homes sales fell, according to data on Tuesday highlighting weak spots in the economy and risks to output.

Separately, fourth-quarter worker productivity was revised sharply lower and unit labor costs soared, suggesting inflation pressure that may make the Federal Reserve wary of cutting interest rates despite worries about growth.

U.S. Treasury bond prices pared losses on the factory data, which economists said could mean businesses might be holding back from spending while waiting for signs of stronger demand.

"That's what got the market more excited, that there may be a more broad-based slowdown in business activity, which could transfer into (weaker) employment," said Cary Leahey at Decision Economics in New York.

The Commerce Department said U.S. factory orders fell 5.6 percent last month and that durable goods orders were revised to an even steeper 8.7 percent decline, compared with the 7.8 percent retreat announced last week.

"The orders report ... suggest that there is a significant loss of confidence in companies regarding new investments," Leahey said.

Non-defense capital goods spending excluding aircraft, seen as a good proxy for business investment, slumped 6.3 percent in January for the deepest decline in three years.

Worry that weakness in manufacturing and housing could spill into the wider U.S. economy were among the factors that spooked equity investors last week and sent markets tumbling..."

for those ARM homeowners crossing their fingers for the Fed to lower the interest rates, ahem... I wouldn't count on it. Can't pull the article (reg required) but here's the headline. Anyway, it's pretty obvious except to investors in risky ventures who think that just because they are about to lose their butts the Fed is going to come in and save them. The Fed is going to let them take their losses.

Bernanke Says Fed Unlikely to Alter Rates at The Washington Post (reg. req'd)

this one pretty much says the same thing:

Don't Expect Fireworks from the Fed
http://www.businessweek.com/bwdaily/dnflash/content/jan2007/db20070118_610618.htm?chan=top+news_top+news+index _businessweek+exclusives

Bernanke is also assigning some personal responsibility to risk-taking here - ie: taking risks is risky and don't expect the Fed to bail you out just because you didn't win your bet:

Bernanke: Toughen up on mortgage giants
http://news.yahoo.com/s/ap/20070306/ap_on_bi_ge/bernanke_10;_ylt=AiW2PhwrKDwXKqcxda1fRshv24cA

"WASHINGTON - Federal Reserve Chairman Ben Bernanke urged Congress on Tuesday to bolster regulation of mortgage giants Fannie Mae and Freddie Mac, and suggested limiting their massive holdings to guard against any danger their debt poses to the overall economy.

Bernanke has previously supported efforts to pare the two mortgage companies' huge portfolios. This time, however, he was a bit more specific and recommended that their holdings might be linked to a "measurable public purpose, such as the promotion of affordable housing... "


he may be smarter than I've been giving him credit for up to now.


Not smarter than you gave them credit for at , it's just that we'r just as dumb as they give us credit for .

All our jobs are leaving . Whats left here is being given to low wage third worlders they are filling this nation up with . The rich corps are bussy little workers bringing in the NWO . Welcome to serfdom .
These restrictions on morgages will only pertain to us nationals ,Spabby [hello ] . In case you missed it , the illegal immigrants get a , " get out of regulations free card " . Rules onl;y apply to the rest of us .

Check out the banks ,like major ,' Bank of America [ how ironic ] 'that insist on you having several forms of ID to open or close account, yet illegals don't even have to prove they are who they say they are . One illegal can in and open up several credit card accounts or morages in several different names .

PS, seems you have been ignoring me last year or so, any reason for this ? Me ,aka Who

lol who, I haven't really posted for the last year or so... real life, romance and all of that. :)

it is really good to see you.

I have noticed this trend of good numbers coming out, Bush saying the economy is strong, and then a downward revision on page 12 about three weeks later. Any time you print money like mad or have an increase in cost of a fundamental component of the economy (say, oil) you will wind up with stagflation. This is a pest because it takes a few years to rear its ugly head and, when it does, there is no mechanism to fix it. Economists argue over what might help a little, but no one is naive enough to think there is a remedy.
For those of you unfamiliar with the term, stagflation is a situation where the economy is not moving forward, but inflation is. If your GDP growth without inflation is under 3-4% (which it was last year) and inflation is coming in well over that, from a Federal Reserve perspective, you're pretty much screwed. Increasing interest rates will fully stall the economy if not cause it to shrink, and lowering interest rates is likely to fan the flames of inflation.
Luckily, in order to have this kind of economic problem you have to either have a huge change in the price of a necessary and realistic irreplacable factor of industry or be stupid enough to run record deficits year after year.

Check out the headlines on yahoo from like an hour ago:

http://www.geocities.com/deadsheepwalking/7mar07econyahoo.txt

the "growth" IS the rising consumer debt. that's what they don't tell you. notice it's the CEOs talking about a stronger economy.

they did the same thing when they claimed wages had risen last quarter. if you read the article it said wages grew in two segments of the American population - CEOs and Federal employees. :|

grimr, I think you pegged the effects of either lowering or raising the interest rate. from what I can tell of what Bernanke has said, the Fed has no plans to do either.

lol who, I haven't really posted for the last year or so... real life, romance and all of that. :)

it is really good to see you.


Ok, .I know you've been gone for awhile, but you were acting a littlle stand offish ,so glad it's nothing and glad your back . :nice:

Check out the headlines on yahoo from like an hour ago:

http://www.geocities.com/deadsheepwalking/7mar07econyahoo.txt

the "growth" IS the rising consumer debt. that's what they don't tell you. notice it's the CEOs talking about a stronger economy.

they did the same thing when they claimed wages had risen last quarter. if you read the article it said wages grew in two segments of the American population - CEOs and Federal employees. :|

grimr, I think you pegged the effects of either lowering or raising the interest rate. from what I can tell of what Bernanke has said, the Fed has no plans to do either.



I was born one morning it was drizzling rain, fightin and fussin was my middle name , one fist of iron, the other other of steel, if the right one don't get ya, then the left one will ..you load 16 tons, what do ya get ,another day older and deeper in dept . Saint Peter don't you call me cause I can't go , I owe my soul to company store ! [ thats all i remember of it ] .

lyrics to old coal miner song by Tennesee Ernie Ford . These people didn't own anything either, the company owned the houses , the stores, the mine and the people . So the more the miners worked, the more they had to spend and put back into the coffers of the company . And it wasn't black slaves working in those mines, it was mostly white ' LEGAL ' immigrants and poor ignorant nationals . Sharecroppers, same thing, the ol, Grapes of Wrath gang .

The difference of now and then, if you worked hard and sacrificed yourself, your kids could getan education and not have to live like that . It escalating an industry boom, but also a education boom . Credit was warned about and something most people avoided as much s possible . They knew that the borrorer is slave to the lender , ' like the Bible told them so ' . They lived within their means in small homes and shacks, drove old cluckers or took the bus . Not anymore, we got to have it all now, big homes , new cars and the Saudis are ranking in the dough . They own most of our morgages, credit cards, and now they even own over 5% of 'conservative ' Fox News . We ain't going to be hearing no bad news about the muslims yall ! It may soon be Hannety and Laden . :confused: