The Economy Is Fine (Really)

Wall Street Journal ^ | January 28, 2008 | BRIAN WESBURY

[laxcoach]

Anecdotal evidence does not measure the economy as a whole.

That isn't too diminish your point. The economy as a whole does not tell anecdotes either.

Here's my anecdote that relates to yours:
My father had a small auto repair business until 2 months ago (retired). He always said that when the economy is good or bad he did well. When the economy is changing, his business suffered, and his theory over the years was that people are frugal with cars when they are uncertain.

[Vanbasten]

Anecdotal evidence is easy to find. That doesn’t necessarily mean the economy as a whole is in deep trouble.

[Toddsterpatriot]

For all of 2007, the CPI increased 4.1%, the biggest gain since 1990. Energy prices jumped 17.4% during the year, while food prices rose 4.9%.

[montag813]

Durable goods through the roof this morning. There is no recession.

[expat_panama]

"People can’t pay for their HOMES!"

You didn't get the memo; that's been revised to read "People can’t sell their homes for what they PAID FOR THEM!"

[ECM]

lol, quote of the day!

[1rudeboy]

I stole it from someone . . . maybe that other economist at George Mason (not Walter Williams).

[Ramcat]

The economy maybe rosy for some but not the car makers/dealership. Even with these drops in interest rates people are simply not buying.

I empathize with you and your husband. These are unsettling times.
Do you think the problem is with people not qualifying for financing? Or, are people worried about their jobs?
In my case I can't consider buying a new $40k truck when the energy industry might be on the verge of transition. Will the country stick with ethanol or will there be a shift to hydrogen, natural gas, new battery technology, etc???
Wishing you and your husband well. ramcat

[Toddsterpatriot]

Will the country stick with ethanol or will there be a shift to hydrogen, natural gas, new battery technology, etc???

Your truck will be long gone before we shift to something other than gasoline.

[Freedom_Is_Not_Free]

We are doomed, at least according to Merrill Lynch.

http://cfcr.ml.com/GetDoc.aspx?e=9YhRnwvMzjDHV5nMTFs8bDKppVhpHO9X0%2bgMcb9D4eLNKCYm9wea%2bChrDydr6TEUnZFLbSjxykK09fOPWLTogQ%3d%3d&ctbDocIDs=10689902&v=1&m=qQVXKNXS2W94OW5%2f6C8LqMdMWVM%3d

[Toddsterpatriot]

Thanks for the link. If they’re right and the current account deficit drops to 3.5% of GDP by the end of 2009, what will the whiners complain about?

[Freedom_Is_Not_Free]

WoW! Toddsterpatriot must have a filter on his computer that blocks out anything he doesn't want to see, hear or believe. Where do I buy one?

For those of you who can handle the truth rather than bury your head in the sand, here are the major statements from Merrill Lynch's official statement to their shareholders regarding the financial climate for the next 24 months, from the link I posted to Toddsterpatriot, above.

Merrill Lynch states:

"The recession in housing has spilled over to the rest of the economy..."

ML assumes we are already in the beginning of a recession.

"Home prices are expected to decline by 15% in 2008 and by a further 10% in 2009, with more depreciation likely beyond the forecast period"

ML expects AT LEAST a 25% reduction in home prices in two years and ultimately 30% or more before a bottom in housing is reached. This points to recession.

We expect annual earnings to be $80, down 8.4% from 2007... The annual averages, however, mask a 20% peak-to-trough decline, which is typical of recessionary backdrops. We expect more write-downs will result in a 15% decline in reported earnings this year.

ML believes these losses and decreased earnings are recessionary.

We expect job losses in the range of 2.5 million, close to what we saw in the last recession. This in turn is expected to push the unemployment rate up to 5.57% by the end of 2008, and to 6% by early 2009.

ML believes these job losses are recessionary.

Rising unemployment, $6 Trillion in lost housing wealth, combined with slumping equity valuations, and the lack of participation from the baby boomers for the first time in three decades likely will result in the worst consumer recession since 1980.

That is ML's third declarative statement of RECESSION, clearly backing their reasoning for supporting their conclusions, unlike those who cherry pick data and pulls conclusions out of thin air.

For the sake of those of you who aren't like ToddsterIDontWantToKnow, let me repeat ML's financial projections for their shareholders for the next 24 months...

...likely will result in the WORST CONSUMER RECESSION SINCE 1980.

Sorry for shouting, but it was worth repeating, and firmly, otherwise some might be tempted to be swayed by Toddsterpatriot's desire to disregard all of this key information.

Market participants and policy makers alike have pretty much abandoned the notion that the US slowdown is merely confined to housing.

US retailers just experience the worst holiday season since 2001. Which cannot have come as much of a surprise considering that consumer confidence hit the lowest point it ever has during any crisis in the last 20 years.

Let me repeat that again...

...consumer confidence hit the lowest point it ever has during any crisis in the last 20 years.

My fingers are tired, so people will just have to read the rest of the information at the link above, and posted to see why Merrill Lynch believes we have begun a long, deep recessionary period and to appreciate how much compelling data ToddsterWhatICantHearYou? glossed over in his attempt to completely discard professional financial projections. This information is not some editorial garbage, but the official financial forecast for Merrill Lynch's shareholders.

I wrote this post for the benefit of others, not for ToddsterIOnlySeeWhatIWantToSee, so you can see the FACTS of the matter in the link I provided to you, so you can appreciate the content in the link if you didn't already read it, and FWIW the conclusion by Merrill Lynch that we are already in a recession that will be deep and will be long.

Never mind the attempt to ignore that compelling financial data by those who would rather put their heads in the sand and pretend all is well and things are just peachy in the financial/business/economic world.

In the meantime, ToddsterOsterich ignores all he doesn't agree with, which is why I rarely to never post anything to him. It is a useless exercise in futility. The blind willingly remain stumbling in the dark. We'll see what he says after he trips and falls down...

[Freedom_Is_Not_Free]

Here is the link again, for those who did not open Merrill Lynch’s future economic projections and would like to:

http://cfcr.ml.com/GetDoc.aspx?e=9YhRnwvMzjDHV5nMTFs8bDKppVhpHO9X0%2bgMcb9D4eLNKCYm9wea%2bChrDydr6TEUnZFLbSjxykK09fOPWLTogQ%3d%3d&ctbDocIDs=10689902&v=1&m=qQVXKNXS2W94OW5%2f6C8LqMdMWVM%3d

[Toddsterpatriot]

WoW! Toddsterpatriot must have a filter on his computer that blocks out anything he doesn't want to see, hear or believe. Where do I buy one?

Wow! That's pretty funny! In case anyone thinks that Merrill Lynch is infallible, I present a chart of their stock for the last year.

Earnings for the last year were a loss of $9.69 per share.

Merrill Lynch's official statement to their shareholders

The shareholders who saw the stock drop from $95 to $57 appreciate the statement. They'd appreciate not losing 40% in the last year a little more.

Merrill Lynch states:

ML assumes...

ML expects...

ML believes...

ML believes...

That is ML's third declarative statement of RECESSION

LOL! You'd think their impressive record of economic prognostication would have lead to a rising instead of a falling stock price. They're so good, you'd expect an annual profit instead of a $9.69 per share loss.

Sorry for shouting, but it was worth repeating, and firmly, otherwise some might be tempted to be swayed by Toddsterpatriot's desire to disregard all of this key information.

Sorry for laughing, but my predictions for the last year seem to have worked out much better than Merrill's.

to see why Merrill Lynch believes

Believes. Not knows.

so you can see the FACTS of the matter

Still laughing.

This information is not some editorial garbage,

LOL!

and FWIW the conclusion by Merrill Lynch that we are already in a recession that will be deep and will be long.

I'll wait to see the huge earnings Merrill posts the next two quarters.

Never mind the attempt to ignore that compelling financial data

Predictions are not data.

[Mase]

Given the performance of Merrill Lynch last year along with their need to go begging to sovereign wealth funds to stay afloat, it's no wonder they see nothing but doom. They're the last organization I'd be looking to for advice about the economy...unless of course you believe that a global financial collapse is upon us and 25% unemployment and soup lines are just around the corner.

Some of these guys will even tell you that it won't be long before we're killing each other outside Kroger fighting for the last box of Corn Flakes. What a depressing way to go through life.