U.S. economy grows at 4.8% Q-Q annualized rate

[Colonâ„¢]

Originally posted by DanS
The trade deficit was better in March than expected. The 4.8% in Q1 might be revised upward to as much as 6%. Much higher than should be expected at this point in the business cycle.

Ahum. 2nd quarter of 2000: annualised quarter-to-quarter GDP growth of +6%. Next quarter: a contraction of 0.5%. And 2 quarters later the US was "officially" in a recession.

[Odin]

I remember reading somewhere that our growth is being proped up by the housing market and a negative savings rate.

Swiss Cheese economy indeed.

[DanS]

Originally posted by Colonâ„¢
Ahum. 2nd quarter of 2000: annualised quarter-to-quarter GDP growth of +6%. Next quarter: a contraction of 0.5%. And 2 quarters later the US was "officially" in a recession.

No doubt. Not only that, but the two periods were preceded by a runup in interest rates.

However, corporate profits are very strong now, whereas they were weak at the beginning of 2001. This cycle seems to have lots of legs left.

[MRT144]

Originally posted by Kidicious
This thread has been infected by the herpes viris.

Anyway, I think the symptoms decrease in a few years. That's just what I heard though. And isn't there medicine for it now?

it doesnt eliminate the virus only reduces outbreaks and shedding. whoopty dooo!

[Colonâ„¢]

Originally posted by DanS


No doubt. Not only that, but the two periods were preceded by a runup in interest rates.

However, corporate profits are very strong now, whereas they were weak at the beginning of 2001. This cycle seems to have lots of legs left.

Hmmm. Firstly, corporate profits by no means is *the* determinant for future economic performance, and even so, it's only a determinant in so far it is actually re-invested, thereby generating additional employment and income. So far, new orders for non-defense capital goods have peaked in November '05. (although I wouldn't want to rule out a rejunevation, to be honest)

I've also been checking the composition of corporate profits by industry, and I think it's interesting ("interesting" because I wouldn't want to draw any firm conclusions out of it) that of the $200.4 billion growth in profits in domestic industries during Q405, $104.9bn was from financial industries and $95.5bn from non-financial. In Q106 profits in financial industries rose by $67.1bn, non-financial was $40.5bn. This, even though the aggregate ratio is a 30/70 financial/non-financial. I wonder what the profits results will look like if the recent turmoil in the financial markets isn't rectified, for instance.

Checking the further breakdown of Q4 '05 within non-financial (such breakdown isn't available yet for Q1 '06) , there was a $19.9bn increase in utilities, which literally doubled aggregate profits compared to the previous quarter (I venture heating bills may have a lot to do with it), and also a $9.9bn increase in petroleum and coal products. Not that the profits results in the other sectors were abysmal though, just not quite as eye-popping (except of retailing).

[self biased]

summary?

[KrazyHorse]

DanS is an incurable optimist and mrt has herpes because he's a dumbass.

[Saras]

Colon will soon get to manage a usd 50 bn macro hedge fund and triple it by betting vs the greenback. Short USD. And also, when in doubt, sell cable too.

[Colonâ„¢]

Plus, there's an inverse correlation between the degree of insomnia and the degree of readability of my posts.

I can barely read myself what I wrote.

[MRT144]

Originally posted by KrazyHorse
DanS is an incurable optimist and mrt has herpes because he's a dumbass.

thanks krazyhorse, you really know how to turn it into an enlightening situation.

[Drake Tungsten]

DanS is an incurable optimist

Only a cynic or a partisan hack could be disappointed with the performance of the US economy over the last few years.

[Bosh]

Originally posted by DanS


No doubt. Not only that, but the two periods were preceded by a runup in interest rates.

However, corporate profits are very strong now, whereas they were weak at the beginning of 2001. This cycle seems to have lots of legs left.

Unless the housing bubble pops, then things get scary. That sort of thing makes me very nervous personally because I'm sitting in the middle of another housing bubble (housing prices in southern Seoul are INSANE and have been growing by 8%+ for years and years).

[DanS]

Originally posted by Colonâ„¢
Plus, there's an inverse correlation between the degree of insomnia and the degree of readability of my posts.

I can barely read myself what I wrote.

Hardly readable. But I understood all of it.

[Dinner]

Originally posted by Drake Tungsten

DanS is an incurable optimist

Only a cynic or a partisan hack could be disappointed with the performance of the US economy over the last few years.

Or they could be one of the 3/4 of Americans who haven't seen real incomes rise since Clinton was President.

Over all the economy is ok. It is Great for corporations and the top 1/4 but nothing exciting for the other 3/4ths of the population. Increases in housing prices is what has kept that 3/4 feeling richer but that can't last forever. It's respectable but this isn't a return to the boom of the Clinton years.

[Kidlicious]

Originally posted by Colonâ„¢
Hmmm. Firstly, corporate profits by no means is *the* determinant for future economic performance, and even so, it's only a determinant in so far it is actually re-invested, thereby generating additional employment and income. So far, new orders for non-defense capital goods have peaked in November '05. (although I wouldn't want to rule out a rejunevation, to be honest)

Dividends and corporate cash stocks are increasing quite a bit.