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U.S. Growth May Hinge on Businesses (NYT: US Economy Flirts With Quagmire)
New York Times ^ | December 30, 2005 | LOUIS UCHITELLE

Posted on 12/30/2005 12:02:54 PM PST by presidio9

The housing market is gradually fading as a prop for the economy, eroding a source of increased wealth that allowed consumers to borrow and spend avidly in recent years.

Growing Stronger Meanwhile, the bond market, where short-term interest rates are now slightly above long-term rates in what is known as an inverted yield curve, suggests that the economy is headed for a sharp slowdown, perhaps even a recession. The stock market rally earlier this year has petered out.

So why do most forecasters predict that economic growth will remain relatively strong next year? Perhaps because they are counting on other sectors that have been relatively weak - particularly stepped-up business investment - to help sustain the robust expansion of the last 30 months.

"I think the surprise will be that housing prices and housing sales will decelerate, but the economy will do just fine," said Richard Berner, chief domestic economist for Morgan Stanley.

Mr. Berner is not alone in his optimism. Despite some worrisome indicators, only a handful of the 53 economists surveyed by Blue Chip Economic Indicators predict that the growth rate in 2006 will drop much below the 3.7 percent average so far this year.

That outlook also assumes that consumer spending, deprived of the lift from rising home prices and mortgage refinancing, will not drop very much.

Despite high debt levels, it is still safe to say that Americans will somehow continue to buy on credit, and with energy prices falling, wages now diverted to gasoline purchases should be freed up to spend on the array of goods and services that drives the economy.

-snip-

Forecasters are notorious for missing major turning points in the economy.

-snip-

(Excerpt) Read more at nytimes.com ...


TOPICS: Business/Economy; Front Page News; Miscellaneous; Politics/Elections
KEYWORDS: economicquagmire; nytimes

1 posted on 12/30/2005 12:02:56 PM PST by presidio9
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To: presidio9
"Forecasters are notorious for missing major turning points in the economy."

Only those employed by the NY DNC Times and other Dinosaur Media outlets

2 posted on 12/30/2005 12:04:17 PM PST by MNJohnnie (We do not create terrorism by fighting the terrorists. We invite terrorism by ignoring them.--GWBush)
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To: presidio9

Dubya needs to push another tax cut. Not because we really need it, but just to piss the liberals off.


3 posted on 12/30/2005 12:05:16 PM PST by GaltMeister (“All that is necessary for the triumph of evil is that good men do nothing.”)
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To: presidio9
(NYT: US Economy Flirts With Quagmire)

But according to the NY Times, the economy hasn't been good under Bush. I guess they will revise that meme only if the economy actually starts to stagnate. Then they will tell us the economy was good, but faltered under Bush's leadership even though they've never admitted it was good.

4 posted on 12/30/2005 12:05:26 PM PST by SolidSupplySide
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To: presidio9

"U.S. Growth may hinge on Businesses"

Kinda makes you want to say, "as opposed to...?" doesn't it?


5 posted on 12/30/2005 12:07:15 PM PST by ArmstedFragg
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To: SolidSupplySide

The one thing that can't be argued is that many Americans are absolutely swimming in debt. That is the only thing that scares me in today's economy.


6 posted on 12/30/2005 12:07:30 PM PST by celejrm313
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To: MNJohnnie
I included that bit in the excerpt, because if you read the entire article it becomes obvious that the author hopes that this is just one of those times. "Things may look ok now, but hopefully there'll be a nasty recession soon, so we can get those idiot Rpublicans out of power and resume screwing up the nation/world."
7 posted on 12/30/2005 12:07:40 PM PST by presidio9 (Islam is as Islam does)
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To: presidio9
Not since the early to mid-1990's has the wage loss been so broad.

How did this slip in?

8 posted on 12/30/2005 12:08:41 PM PST by ncountylee (Dead terrorists smell like victory)
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To: presidio9

And acroos town, the Wall Street Journal says:

http://www.freerepublic.com/focus/f-news/1549380/posts


9 posted on 12/30/2005 12:10:11 PM PST by groanup (Shred for Ian)
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To: SolidSupplySide

Actually, US economic growth under Bush has been almost the same as it was under Clinton, even before you factor in 9/11 and Katrina. And unemployment is lower. In fairness, the Times has never referred to "growth" under Clinton. In it's pages, it is always "RECORD growth."


10 posted on 12/30/2005 12:10:31 PM PST by presidio9 (Islam is as Islam does)
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To: ncountylee

The country as a whole is prospering. The 'wage loss' is in the dinosaur media. Less people want their product. Sucks to be them!


11 posted on 12/30/2005 12:11:41 PM PST by GaltMeister (“All that is necessary for the triumph of evil is that good men do nothing.”)
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To: presidio9
from the article....

"...to help sustain the robust expansion of the last 30 months."

AHA! Gotcha, the commie creeps.

The NYT has NEVER reported the Bush economy as a "ROBUST EXPANSION".

12 posted on 12/30/2005 12:12:29 PM PST by DCPatriot ("It aint what you don't know that kills you. It's what you know that aint so" Theodore Sturgeon)
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To: ArmstedFragg

Pretty damed profound, I'd say.


13 posted on 12/30/2005 12:15:19 PM PST by Eric in the Ozarks
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To: presidio9
Show some respect here. The NY Times has predicted 5 of the last 2 recessions.
14 posted on 12/30/2005 12:16:40 PM PST by PMCarey
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To: presidio9
The New York Times is so inept. The real estate boom is a crutch? What the hell are they smoking? Its like saying that our economy hinges on Michigan or the auto industry, yet both are in shambles. The point is that the American economy is bigger than selling houses.

But I don't expect them to get it or any of the great economic news like the 5% unemployment rate. I expect an article by Paul Krugman calling for the elimination of the Bush tax cuts.

15 posted on 12/30/2005 12:17:38 PM PST by KC_Conspirator
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To: presidio9

The economy depends upon businesses? I always thought it was the government that brought us all this wealth.


16 posted on 12/30/2005 12:19:51 PM PST by Mad_Tom_Rackham (A Liberal: One who demands half of your pie because he didn't bake one.)
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To: presidio9
U.S. Growth may hinge on Businesses

In other news, how far the Bears go in the post season may hinge on how many playoff games they win.

17 posted on 12/30/2005 12:20:18 PM PST by thepatriot1 (...brought to you courtesy of the Red, White and Blue)
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To: presidio9

Poor MSM, it has taken them all of this time to come to the correct conclusion that the U.S. economy depends on how businesses do rather than government programs.


18 posted on 12/30/2005 12:21:19 PM PST by zerosix (Native Sunflower)
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To: Mad_Tom_Rackham

In an Algore Paradise.


19 posted on 12/30/2005 12:24:51 PM PST by Eric in the Ozarks
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To: presidio9
How stupid is this headline? U.S. Growth May Hinge on Businesses

I suppose the NYTwits think growth 'hinges' on governemnt spending or electing democrats?

Nevermind. Just answered my own question.

20 posted on 12/30/2005 12:29:09 PM PST by No Longer Free State (No event has just one cause, no person has just one motive, no action has just the intended effect)
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To: presidio9

If the NY Slimes says 2006 is going to be a bad year for the economy, then the exact opposite will happen.


21 posted on 12/30/2005 12:31:29 PM PST by The South Texan (The Democrat Party and the leftist (ABCCBSNBCCNN NYLATIMES)media are a criminal enterprise!)
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To: presidio9

Memo to all slimes employees: Starting Jan. 2, 2006 all employees will wear tweed caps and sing "Brother can you spare a dime?" while working. This will be to insure a proper and acceptable frame of mind as you churn out the daily doom and gloom.


22 posted on 12/30/2005 12:32:42 PM PST by jmaroneps37 (We will never murtha to the terrorists. Bring home the troops means bring home the war.)
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To: presidio9
It's as if the writers at the NYT get up in the morning saying to themselves..."Ok, what can I write to distort reality today?".

The problem that economic naysayers have is that PRODUCTIVITY is what is driving the GDP, and the marriage of technology and the economy is just beginning.

23 posted on 12/30/2005 12:36:45 PM PST by wayoverontheright
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To: presidio9

What's sad about this is that the NYT is so brain dead they think this is philosophically deep when it's really the first hour of lecture in Economics 101.


24 posted on 12/30/2005 12:56:38 PM PST by DustyMoment (FloriDUH - proud inventors of pregnant/hanging chads and judicide!!)
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To: celejrm313
The one thing that can't be argued is that many Americans are absolutely swimming in debt.

And yet household net worth is at an all time high. $51 trillion.

Federal Reserve, PDF page 110 of 124

25 posted on 12/30/2005 1:19:53 PM PST by Toddsterpatriot (The Federal Reserve did not kill JFK. Greenspan was not on the grassy knoll.)
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To: jmaroneps37

"Brother can you spare a dime?">>>>>>>>

I recommend, "I'm busted", instead. Listen to the Ray Charles version and the Johnny Cash version and pick the one you like best. I go more for Ray on that one myself 8 0 )


26 posted on 12/30/2005 3:12:02 PM PST by RipSawyer (Acceptance of irrational thinking is expanding exponentiallly.)
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To: SolidSupplySide

"Then they will tell us the economy was good, but faltered under Bush's leadership even though they've never admitted it was good."

Sort of like the way the liberals refers to the wonderful solidarity, consensus, and resolve against the Soviet foe that "we" all shared during the cold war, in contrast to the divisive atmosphere created by Bush?


27 posted on 12/30/2005 3:30:35 PM PST by Flash Bazbeaux ("I'll have the moo goo gai pan without the pan, and some pans.")
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To: Flash Bazbeaux
Sort of like the way the liberals refers to the wonderful solidarity, consensus, and resolve against the Soviet foe that "we" all shared during the cold war, in contrast to the divisive atmosphere created by Bush?

Not a bad analogy. I never thought of it that way. But I must say that the Dems don't ordinarily mention how much they supported the Cold War.

28 posted on 12/30/2005 3:58:00 PM PST by SolidSupplySide
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To: MNJohnnie

Forecasters are notorious for missing major turning points in the economy."
Only those employed by the NY DNC Times and other Dinosaur Media outlets


If they really want to do some brainiac economic forecasting, they should research the slide of the Old Grey Lady's stock price towards oblivion. It's like watching a train that has run off the end of a collapsed bridge.

http://finance.yahoo.com/q/bc?s=NYT&t=5y


29 posted on 12/30/2005 4:17:53 PM PST by FastCoyote
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To: celejrm313
The one thing that can't be argued is that many Americans are absolutely swimming in debt. That is the only thing that scares me in today's economy.

The Fed: Pulling on a Rubber Band

Your fear is not misplaced...We are a nation deeply in debt; to ignore it and explain it dismissively is foolish...and dangerous...

30 posted on 12/30/2005 4:28:33 PM PST by antaresequity (PUSH 1 FOR ENGLISH, PUSH 2 TO BE DEPORTED)
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To: antaresequity
We are a nation deeply in debt

We are also a nation with large assets. See post #25.

31 posted on 12/30/2005 4:46:11 PM PST by Toddsterpatriot (The Federal Reserve did not kill JFK. Greenspan was not on the grassy knoll.)
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To: GaltMeister

More tax cuts offset by spending cuts....


32 posted on 12/30/2005 4:47:55 PM PST by misterrob
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To: presidio9
From this link:

Earlier this month, the New York Times Co., which also publishes the Boston Globe and International Herald Tribune, said it would not issue 2006 forecasts for earnings, revenue growth, or expense growth due to a tough advertising environment.

Snort. Yup, I'd really trust their business reporting.

33 posted on 12/30/2005 4:52:49 PM PST by mewzilla (Property must be secured or liberty cannot exist. John Adams)
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To: GaltMeister

And make it retroactive to 2000.


34 posted on 12/30/2005 4:55:11 PM PST by TASMANIANRED (Post Christmas shopping for a new tag line.)
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To: celejrm313

"The one thing that can't be argued is that many Americans are absolutely swimming in debt. That is the only thing that scares me in today's economy."

And that so many baby boomers have less than $50,000 saved for retirement(according to some guy on Fox last night). Wonder what the break down is of dems/reps/other who are not in debt and have retirement well in hand and visa versa?


35 posted on 12/30/2005 5:31:03 PM PST by penelopesire
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To: GaltMeister
The country as a whole is prospering. The 'wage loss' is in the dinosaur media. Less people want their product. Sucks to be them!

It must also be hard for them to be objective writing such a story.

36 posted on 12/30/2005 7:14:01 PM PST by p23185 (Why isn't attempting to take down a sitting Pres & his Admin considered Sedition?)
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To: FastCoyote
If they really want to do some brainiac economic forecasting, they should research the slide of the Old Grey Lady's stock price towards oblivion. It's like watching a train that has run off the end of a collapsed bridge.

Wow, you sure nailed it F.C. Happy New Year to you and yours!

37 posted on 12/31/2005 12:38:06 AM PST by MNJohnnie (We do not create terrorism by fighting the terrorists. We invite terrorism by ignoring them.--GWBush)
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To: ArmstedFragg

as opposed to consumers, who kept the economy from imploding in 1998-2001. The current economy is the result of stromg consumer demand, while business investment has not rebounded from its amazing collapse in 2000. Now the shift will be, for a while at least, to B2B sales.


38 posted on 12/31/2005 9:36:20 AM PST by dangus
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