Posted on 04/28/2007 2:32:45 PM PDT by Sleeping Beauty
The worst economic growth in four years is raising concern that troubles in the U.S. housing market will spread and throw the country into a recession before the year is out.
Nationwide, the economy practically crawled at a 1.3 percent pace in the opening quarter of 2007, the Commerce Department said. That was even weaker than the sluggish 2.5 percent rate in the closing quarter of last year.
The main culprit in the slowdown was the housing slump, which made some businesses act cautiously. The bloated trade deficit also played a role.
Consumers largely carried the economy in the first quarter. But will they stay resilient in light of the troubled housing market, fallout from risky mortgages and rising energy prices?
"The No. 1 question is can the consumer continue to play Atlas while the housing market crumbles around him?" said Richard Yamarone, economist at Argus Research.
Sharpening that question was a private report released Friday that showed that confidence among U.S. consumers dropped to a seven-month low in April as concerns about fuel prices, inflation and home values intensified.
The Reuters/University of Michigan's final index of sentiment declined to 87.1 this month, from 88.4 in March.
A drop in confidence at the start of the second quarter raises concerns that consumer spending, which accounts for more than two-thirds of the economy, will cool in coming months. Less spending would make the economy more vulnerable to the declines in housing and business investment that undermined growth last quarter.
(Excerpt) Read more at seattlepi.nwsource.com ...
Do you know why the Dow reached 13,000 while the economy is faltering?
What's your theory?
In the meantime, in this worst economy of the past 2 weeks, jobs are at an all-time high, unemployment is lower than it was during the 1990’s, and both the DOW and S&P are at record highs.
OOOOOPs! Bush's fault??
I would attack the paper and the writers.........if they were credible. I’ve lived in Seattle long enough to know you don’t take the PI with a grain of salt....you take it with a salt lick.
Why should we!?! This economy is extremely healthy and has outperformed itself tremendously well....Considering we it has managed through the largest attack on this nation homeland, the largest natural disaster in this nation's history, a WOT going on 6 years, and through that artificially high energy prices to boot.
The economy today is robust. One moderating Qtr (or two) does not cause reason for concern whatsoever!
Though of course the MSM have done nothing but spin negative about this economy for the past 5 years. That you buy into it is foolishness.
Of course in 2000 when we had a quarter of NEGATIVE growth (-.5) and another quarter of 0% growth.....the MSM touted the U.S. economy then as the most robust in history while trying to get Al Gore elected.
Ping
There is a lot of money not being spent.
Good. I’m working way to hard and it’s time to take a break.
Were truth to be spoken it's only because an empoison kleptocrat Democrat is not in the Oval Office.
The Seattle PI is the lickspitle to the DNC.
They are preparing for an all-out assault just-in-time to "talk" the economy into a depression for the '08 campaign.
Who knows better? Wall Street or the paper pundit's? Warren Buffet made his billions by knowing. Yes he speculated but when you put up your hard earned cash and you win ...well you've proven you know what you're doin"
When you're in the news room and your speculation is just a guess then we can ignore you.
Walter Williams is one of my heros 'cause he knows what he's talkin about!!!
Not my theory but when operating near its peak, the Stock Market generally operates on the Greater Fool Theory:
It goes like this - you buy something at a high price, but paying too much is okay because you figure you can find a fool greater than you to buy it later.
There is a lot of money not being spent.
Excellent!
I have one theory about that. For the past 5 years or so, just about everybody refinanced their homes and spent that money on all kinds of stuff. It was a consumer boom.
We know they didn't put it in the bank, because there's a negative savings rate in the US.
As interest rates went back up again (13 consecutive times) home prices stabilized and homes were no longer ATM machines. What's worst, monthly payments on those refis went up, so there's some consumer belt tightening going on.
But does anyone have a theory of why the Dow went up?
Money could flow to consumer goods, or money could flow into the stock market. I don't necessarily see "consumer belt-tightening". I see happy people investing in the future of our strong economy.
It goes like this - you buy something at a high price, but paying too much is okay because you figure you can find a fool greater than you to buy it later. Heh, Riodacat. For sure there's a lot of that going on.
I promise I'll give my theory later (and ping you) but here's a hint:
The Dow was dragged up by a handful of companies. Those companies also dragged up the sectors that they are in, which helped. But there is something that all these high-performance companies have in common that's driving the Dow.
No theory here.
I’m spending money almost as fast as my wife is. Got to do our bit, ya’ know.
Some more ammo, hi-cap magazines for the AR, a few odds and ends.
:-)
Again, because the U.S. economy is very healthy. Productivity is up, wages are up, after taxes income is up, unemployment is ridiculously low, interest rates are low (30yr, just went down).....Price to earning ratios are better today than during anytime in the last 10 years...
Just a few of the reasons.....And oh yeah, we are going into our 6 straight year of economic growth (of each and every qtr).
Straw hat selling season.
Companies performance has NO direct effect on stock price. Price moves are market-forces.
From a technical investing viewpoint, that is correct.
From a fundamental investing viewpoint, certain companies increased their earnings this quarter by as much as 88% profit. That's a lot! That pulls money into the market, as well.
So, why the historic record-breaking profits in the middle of very sluggish economic growth -- according to our own Commerce Department?
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