Economy grows at best pace in 2 years (insurance, borrow, companies)

[BankREO]

Originally Posted by JackTheRipper

WASHINGTON - The economy grew at a 3.5 percent pace in the third quarter, the best showing in two years, fueled by government-supported spending on cars and homes.

The Commerce Department's report Thursday delivered the strongest signal yet that the economy entered a new, though fragile, phase of recovery and that the worst recession since the 1930s has ended.

Many analysts expect the pace of the budding recovery to be plodding due to rising unemployment and continuing difficulties by both consumers and businesses to secure loans.

Economy grows at best pace in 2 years - Stocks & economy- msnbc.com

Please, take the financial support in the market and the government stimulus like "cash for clunkers" or the home tax credit and then reality sets in that we are still in recession and the risk of a depression is still very real.

[wanneroo]

Originally Posted by BankREO

Please, take the financial support in the market and the government stimulus like "cash for clunkers" or the home tax credit and then reality sets in that we are still in recession and the risk of a depression is still very real.

I think with the anti business attitude the current government has taken, with tons of new taxes and bureaucracy on the way, not to mention all the bloated wasteful spending, we are in for the long haul on a bumbling economy.

Some of the panic I think has worn off, but the malaise has set in.

[user_id]

Originally Posted by tallrick

Look at the price of commodities like oil and at gold and silver. If that is not inflation I do not know what is. Even consumer prices on food have gone up. In the real world inflation is happening.

The CPI 12-month average is negative, in the real world inflation is no where to be found.

The current price of oil is almost half what it was a bit ago, the price of gold and silver don't matter.

[user_id]

Originally Posted by wanneroo

I'm finding it easily in my local supermarket and at the gas pump.

I suggest you find a new grocery store to shop at because food prices have been doing down. Gas is cheaper than it was much of last year.

[cdcdguy]

Originally Posted by user_id

I suggest you find a new grocery store to shop at because food prices have been doing down. Gas is cheaper than it was much of last year.

Food prices are certainly not going down in my area. Also, gas a year ago was at record lows. Got all the way down to 1.29 in Nov. and Dec here. Course, your point is valid about earlier last year. Gas was coming off 4 dollars and something.

[user_id]

Originally Posted by cdcdguy

Food prices are certainly not going down in my area.

The price declines are only noticeable in some products like diary which is much cheaper than it was last year. The sales on most products are much more aggressive than they were last year though.

Groceries stores react first by offering sales, its only after months of this that they will start to drop the list price of something. Kroger stores have been pretty aggressive in dropping their prices though, they are trying to gain market share from Safeway, etc. Anyhow, some areas only have 1-2 companies running stores in their area and I'd imagine prices would come down slower in such areas. Here there are at least 10 different companies you could shop at within 10 miles or so, so the competition is rather aggressive.

[amirelez]

Originally Posted by user_id

Inflation is no where to be found.

Obviously a good deal of the growth is due to the stimulus package, but a good .5~1% is likely from natural growth. The recession more than likely ended during the summer.

This thing hasn't even got all the way warmed up yet. The stimulus was a good healthy dose of inflation. Don't believe the government lies. I know it's not patriotic or whatever but it's just false. That bear market rally we've had in stocks recently is just a symptom of inflation every time stocks rally our dollar gets hammered! I don't know about you but I've been feeling the symptoms of inflation in the cost of things going up. The stimulus has just kept the real recession at bay when we really needed a good wipe out and liquidation of all the garbage but the government has just kept propping it up with more debt and inflation. In the same quarter debt has risen and so has our trade deficit not to mention personal savings dropped as well. Can you see how stimulus has been the problem and how that's not a good thing?

During the dirty thirties the gnp grew a majority of the decade. GNP between 34 and 37 consecutively grew an average of over 8% per year but nobody said the depression was over, actually unemployment was rising as well. I appreciate an optimist but I just think you may be premature on your assumptions. Our gdp numbers show housing and autos was the reason so the growth is phony it's just more government interference in the "Free"[not even close] market. Propping up more things we need less of like housing and cars which is over supplied is phony growth and takes resources away from other things that may have been more beneficial.

Going deeper into debt to spend money on things that we don't need and can't afford isn't even close to real growth. We need to save our money and start sawing away on our trade deficit by producing things here again. We can't borrow and spend our way to prosperity.

[floridasandy]

Originally Posted by amirelez

This thing hasn't even got all the way warmed up yet. The stimulus was a good healthy dose of inflation. Don't believe the government lies. I know it's not patriotic or whatever but it's just false. That bear market rally we've had in stocks recently is just a symptom of inflation every time stocks rally our dollar gets hammered! I don't know about you but I've been feeling the symptoms of inflation in the cost of things going up. The stimulus has just kept the real recession at bay when we really needed a good wipe out and liquidation of all the garbage but the government has just kept propping it up with more debt and inflation. In the same quarter debt has risen and so has our trade deficit not to mention personal savings dropped as well. Can you see how stimulus has been the problem and how that's not a good thing?

During the dirty thirties the gnp grew a majority of the decade. GNP between 34 and 37 consecutively grew an average of over 8% per year but nobody said the depression was over, actually unemployment was rising as well. I appreciate an optimist but I just think you may be premature on your assumptions. Our gdp numbers show housing and autos was the reason so the growth is phony it's just more government interference in the "Free"[not even close] market. Propping up more things we need less of like housing and cars which is over supplied is phony growth and takes resources away from other things that may have been more beneficial.

Going deeper into debt to spend money on things that we don't need and can't afford isn't even close to real growth. We need to save our money and start sawing away on our trade deficit by producing things here again. We can't borrow and spend our way to prosperity.

good points! we also can't hide our way back to prosperity with the derivative time bomb ticking away:

As a brief recap, let’s consider the following:

The current notional value of derivatives on US commercial banks’ balance sheets is $203 trillion.
97% of these ($196 trillion) sit on FIVE banks’ balance sheets
If even 1% of this $203 trillion is “at risk” … you’re talking about $2 TRILLION in at risk bets made in the derivatives market
If 10% of that 1% end badly, you’re talking about $200 billion in losses
Total equity at the five banks is $737 billion. So, if you assume that only 1% of derivatives are “at risk” (odds are it’s more) and 10% of that at risk money is lost, you’ve wiped out nearly 1/3 of the banks’ equity.

If 2% of derivatives are “at risk” and 10% of those bets go bad, you’ve wiped out $400 billion or nearly half of the banks’ equity.

If 4% of derivatives are “at risk” and 10% of those bets go bad, you’ve wiped out all of their equity and they go to zero.
http://seekingalpha.com/article/1698...ting-to-go-off

those are our "too big to fail" banks....

[amirelez]

Originally Posted by floridasandy

good points! we also can't hide our way back to prosperity with the derivative time bomb ticking away:

As a brief recap, let’s consider the following:

The current notional value of derivatives on US commercial banks’ balance sheets is $203 trillion.
97% of these ($196 trillion) sit on FIVE banks’ balance sheets
If even 1% of this $203 trillion is “at risk” … you’re talking about $2 TRILLION in at risk bets made in the derivatives market
If 10% of that 1% end badly, you’re talking about $200 billion in losses
Total equity at the five banks is $737 billion. So, if you assume that only 1% of derivatives are “at risk” (odds are it’s more) and 10% of that at risk money is lost, you’ve wiped out nearly 1/3 of the banks’ equity.

If 2% of derivatives are “at risk” and 10% of those bets go bad, you’ve wiped out $400 billion or nearly half of the banks’ equity.

If 4% of derivatives are “at risk” and 10% of those bets go bad, you’ve wiped out all of their equity and they go to zero.
Derivatives: A Banking Time Bomb Waiting to Go Off -- Seeking Alpha

those are our "too big to fail" banks....

200 Trillion is like wow how much larger than the economy? Too big too fail and too big to stay intact

[Icy Tea]

Smoke and mirrors and creative accounting. Even when the Titanic was sinking part of it was rising.