GDP, M&A, EBITDA, P/E, NASDAQ, Econo-thread Part 13

[TCO]

Originally posted by Colon


Too bad those dumps were enthusiastically used a couple of years ago to prove the miracle. Now those stats can't be used anymore it's just a matter of faith. Noy much IMHO.
Really, you'll have to come with something from impressive with an acceleration from sub-par productivity growth to mediocre to show the US has undergone a transformation to withstand any kind of economic imbalance.

1. (typical problem) You are fighting an absent opponent. Proving exagerations by the New Economy boosters does not prove that "there is little superior about the US". Plenty of people, including Euopeans, have written about superior aspects of the US financial system for a long time. Also, to disprove claims, you should cite them.

2. Dumping statistics without giving the "so what" is poor business communication. A big table of statistics can make a lot of different points. Ef should state his claim and than show what aspect of the stats support it. Just dumping a table of numbers like a lead weight is asinine. Ef should also do some analysis. (Calculate the CAGRs to show change over time. Do a regression to show correlation. Subtract corresponding numbers for a comparison. Call attention to an outlier point if that is the issue.)

3. Is the issue refuting previous claims? Or making new claims of weakness in the US economy? Can the statistics shed any light on the claims of different benefits from regulatory policies (monetary policy, government spending levels, worker mobility laws, etc.) In other words, how does it all tie together?

4. Ef's data dumps seem more like an attempt to throw some random mud, without making a clear point for discussion. If we have a clear claim, we can bring other data to bear on it. We can also look at confounding factors. Please, label the mud.

[Ted Striker]

Either you consume, either you save (and fund investments), it's really that simple.

Where is Spikey when you need him.

Says who? Can't do both? Is this some "guns and butter" type theory? That's a little simplistic. Secondly, by all of your own admissions, you have told us about capital import. The only thing that stops capital inflows is Roland's ever-present doomsday scenarios.

*Waits for one of the two stats boys to bring in some stat about reduced capital inflows.*

[Ted Striker]

About the defecits, those include massive one time charges

[Colonâ„¢]

Originally posted by Ted Striker


Says who? Can't do both? Is this some "guns and butter" type theory? That's a little simplistic. Secondly, by all of your own admissions, you have told us about capital import. The only thing that stops capital inflows is Roland's ever-present doomsday scenarios.

Savings are by definition the portion of your income you don't spend, therefore there's only an option between saving and consuming. You can't do both or you'd happen to have a magic money multiplier.

The US has pretty much been borrowing abroad to sustain its consumptions and surely you realise that debts have to be repaid. (unless the US is going to default on its debts of course)
And the thing that would stop capital flow is a reassessment of the "unique investment opportunity" the US provides. I wouldn't expect too much from charity.

*Waits for one of the two stats boys to bring in some stat about reduced capital inflows.*

I wouldn't dare to shake your faith dearest.

[Ted Striker]

Originally posted by Colon
Savings are by definition the portion of your income you don't spend, therefore there's only an option between saving and consuming. You can't do both or you'd happen to have a magic money multiplier.

So, say I set aside $200 a month that goes directly into a retirement plan. I also spend $200 a month on buying stuff (food, clothes, hoes). Who says I have to only spend $400 or only save $400?

The US has pretty much been borrowing abroad to sustain its consumptions and surely you realise that debts have to be repaid. (unless the US is going to default on its debts of course)

We've been a debtor nation for decades.

And the thing that would stop capital flow is a reassessment of the "unique investment opportunity" the US provides. I wouldn't expect too much from charity.

Haven't yet seen any reassessment. Except from a few Eurocoms with an unhealthy fetish for stats.

[Colonâ„¢]

Originally posted by GP
1. (typical problem) You are fighting an absent opponent. Proving exagerations by the New Economy boosters does not prove that "there is little superior about the US". Plenty of people, including Euopeans, have written about superior aspects of the US financial system for a long time. Also, to disprove claims, you should cite them.

Well, what does it prove then? I haven't seen many arguments. The new economists are death but the claim of US as a superior place to invest in (hope that's a better wording) is still alive and kicking. You just need to open your paper to get references. It always come down to the same, that the US enjoys a higher rate of productivity because it's more fleixble. I'd love a more substantial argumentation but I don't often see it.

2. Dumping statistics without giving the "so what" is poor business communication. A big table of statistics can make a lot of different points. Ef should state his claim and than show what aspect of the stats support it. Just dumping a table of numbers like a lead weight is asinine. Ef should also do some analysis. (Calculate the CAGRs to show change over time. Do a regression to show correlation. Subtract corresponding numbers for a comparison. Call attention to an outlier point if that is the issue.)

3. Is the issue refuting previous claims? Or making new claims of weakness in the US economy? Can the statistics shed any light on the claims of different benefits from regulatory policies (monetary policy, government spending levels, worker mobility laws, etc.) In other words, how does it all tie together?

4. Ef's data dumps seem more like an attempt to throw some random mud, without making a clear point for discussion. If we have a clear claim, we can bring other data to bear on it. We can also look at confounding factors. Please, label the mud.

I don't understand your issue with EF and I think I've already been explaining how it all ties together. If you want clarification then point me out where.

[Colonâ„¢]

Originally posted by Ted Striker
So, say I set aside $200 a month that goes directly into a retirement plan. I also spend $200 a month on buying stuff (food, clothes, hoes). Who says I have to only spend $400 or only save $400?

I didn't say you can only save all of your income or spend it all.

We've been a debtor nation for decades.

No, only since the early 90's, growing to a negative net asset position of over $2 trillion since then.

Haven't yet seen any reassessment. Except from a few Eurocoms with an unhealthy fetish for stats.

A couple of hundreds of billions less in stock purchases and FDI and a drop the drop of the dollar by 14% vs the euro last year. I'd those few have an awful lot of influence.

[Ted Striker]

Originally posted by Colon
I didn't say you can only save all of your income or spend it all.

You said there was a mutual exclusivity. If that isn't the case then explain in more detail:

"there's only an option between saving and consuming. You can't do both or you'd happen to have a magic money multiplier." Royal Bank of Canada disagrees with you but maybe that's because Canadians make money of off US consumers that buy all their exports.

No, only since the early 90's, growing to a negative net asset position of over $2 trillion since then.

There's also several trillion in cash sitting on the sidelines.

A couple of hundreds of billions less in stock purchases and FDI and a drop the drop of the dollar by 14% vs the euro last year. I'd those few have an awful lot of influence.

That usually happens during a contraction. Now how does that add up to a long term trend?

[TCO]

Originally posted by Colon


Well, what does it prove then? I haven't seen many arguments. The new economists are death but the claim of US as a superior place to invest in (hope that's a better wording) is still alive and kicking. You just need to open your paper to get references. It always come down to the same, that the US enjoys a higher rate of productivity because it's more fleixble. I'd love a more substantial argumentation but I don't often see it.

"It" proves that the New Economy was overhyped. YOU were the one claiming a larger proof (that there is little superior in the US). If you really think so, make the connection. Try to rise above the hurt regional pride and back and forth sniping and make the interesting arguments/points. I used to see more of that.

There has been a lot of writing that claims various benefits from freer labor and capitol mobility in the states other than New Economy writings. Do you doubt what I said? Or just want to read those works? A good start would be the first chapter of the second edition of Valuation by Copeland, et al.

I don't understand your issue with EF

I've explained it in my 4 points. As for specific issues, I will bring them up as they come, but the last two data dumps are good indicators of my kvetch. It's a stylistic point. But an important one. How can we move the argument forward and learn something if we don't make clear arguments. I very much appreciate ef doing some grunt research and bringing facts to the table. But he may think the stats prove something different from what they do. How can I argue with him unless he makes his point? Or, conversely, he may have some wonderful insight, but since he hasn't clearly made his point, I may miss it.

Really, this is just common sense. Don't dump data. Don't even just dump charts. Have a chart and than clearly show the "so what".

[Colonâ„¢]

Originally posted by Ted Striker


You said there was a mutual exclusivity. If that isn't the case then explain in more detail:

"there's only an option between saving and consuming. You can't do both or you'd happen to have a magic money multiplier." Royal Bank of Canada disagrees with you but maybe that's because Canadians make money of off US consumers that buy all their exports.

Wasn't it obvious that I'm talking in terms of proportion of income? It's odd you twist it to an all-or-nothing issue.

Yes, Canada has a trade surplus with the US, so has China, Japan and the EU. That's why the US has a current account deficit, no?

There's also several trillion in cash sitting on the sidelines.

There's always several trillions sitting on the sidelines, banks use that money to lend. Are you saying that consumers should withdraw the money from their deposits and banks get the funds from abroad too?

[DanS]

"Don't even just dump charts."

I am innocent of all charges!

[Ted Striker]

Originally posted by Colon
Wasn't it obvious that I'm talking in terms of proportion of income? It's odd you twist it to an all-or-nothing issue.

No twisting involved. When you say either this, or either that, that means one or the other to me.

Yes, Canada has a trade surplus with the US, so has China, Japan and the EU. That's why the US has a current account deficit, no?

And is exactly why a deficit isn't exactly a bad thing. It points out how important US consumers are to the world economy. You want us buying stuff and spending money because if we don't, where are you going to sell all that stuff?

There's always several trillions sitting on the sidelines, banks use that money to lend. Are you saying that consumers should withdraw the money from their deposits and banks get the funds from abroad too?

Just pointing out where some of that money is that isn't in the markets, and that there isn't some impending reckoning day of death coming if the consumers don't pay down the aggregate debt.

[Sten Sture]

Perhaps it would be useful to look at the income and savings definitions to see what is included in those before we get too excited about how americans all have negative personal balance sheets...

Certainly I am very much in favor of governments having fiscal discipline, consumers not overextending themselves, and corporations improving their productivity. Both here in the States, and in the EU, and in the rest of the world as well.

[TCO]

Originally posted by Ted Striker


No twisting involved. When you say either this, or either that, that means one or the other to me.

Well...anyway it's settled now. No need for you two to go Berzerker.

[TCO]

Originally posted by Sten Sture
Perhaps it would be useful to look at the income and savings definitions to see what is included in those before we get too excited about how americans all have negative personal balance sheets...

Totally agree. Let's try to understand this stuff more fundamentally.