Jump to content
House Price Crash Forum
Sign in to follow this  
Guest

Us Gdp Shrinks 2.9% In First Quarter

Recommended Posts

annualised rate of 2.9%

...

Growth in the US economy has now been revised down by 3% since the first estimate.

That's one heck of a downward revision. Well played by the commerce department. :o

Share this post


Link to post
Share on other sites

That's one heck of a downward revision. Well played by the commerce department. :o

And it was completely predictable.....

Real wages shrinking for the majority meaning lower spending power, shrinking QE which is currently supporting consumption, and an economy that is 70% based on consumption. What did the s*** for brains economists think would be the end result?

We will see exactly the same thing happen in the UK, especially when the monies flowing into the economy from out of the housing bubble starts to decline.

Share this post


Link to post
Share on other sites

Markit Economics @MarkitEconomics 18m

US PMI surveys signal surge in growth to post-crisis high in June, commentary note via @WilliamsonChris http://******/1nGhcmP

Q2 is going to be even stronger than the weather related bounce-back.

Flash PMI
TM
data signal strongest rise in business activity since the recession
GDP set to expand by at least 3% in Q2
Employment Index also hits post-crisis high
Edited by R K

Share this post


Link to post
Share on other sites

Does anyone think there is any correlation between them cutting back on their Q.E backed handouts and this figure ?

No. Rates and QE remain accomodative.

from my link:

The revision in part reflected a steep downgrade to service sector growth in the first quarter, which was itself largely due to
a revision to estimated ‘Obamacare’ spending. The revision to 0.3% growth (1.4% annualised) brings the service sector trend back

down closer into line with the PMI survey

Share this post


Link to post
Share on other sites

expected to bounce back in Q2?

isn't this just massaging the statistics? they realise that Q1 would be negative whatever, so how to capitalise on it?

"pull forward" Q2 decline to exaggerate Q1 decline, Q2 can then actually report a +ve figure relative to Q1.

instead of Q1 -1% and Q2 -1% which would be a technical recession, we'll have Q1 -2,9% followed by Q2 +1%

same net result, but entirely different politics.

Share this post


Link to post
Share on other sites

No. Rates and QE remain accomodative.

from my link:

The markets reacted immediately to this putting gilts up by nearly 1%........all bets are off on interest rates rising this year now.

Share this post


Link to post
Share on other sites

Economic pundits ecstatic as new home sales 'soar' to same level as 1991 housing depression low... :blink:

Untitled23.png

Very odd then that anyone would call it a 'boom' wouldn't you say?

Looks very much like a generational buying opportunity.

Edited by R K

Share this post


Link to post
Share on other sites

Very odd then that anyone would call it a 'boom' wouldn't you say?

Looks very much like a generational buying opportunity.

At your "cheap prices" sure. That's why the world needs HTB. And your mythical wage inflation.

Doctor Housing Bubble
January 2014
California has plenty of land to build but we see building permits at near all-time lows. Is California built out?
California builders not taking the chance
The difference between the massive run-up in price from 2013 versus say that which occurred in 2005, 2006, and 2007 is that builders are betting on this price rise as an anomaly. For example during the boom days we were seeing privately owned housing start permits hitting a range of 12,000 to 14,000 as measured by the US Department of Commerce. Today it is near the 3,000 range. This is a big difference. If these price increases were organic, as in regular families buying homes based on incomes you would see more builders building out in places like Riverside and San Bernardino. Yet they are not.
Take a look at permits being issued on privately owned 1-unit structures:
california-housing-starts.png
Privately owned housing starts have fallen 78 percent since 2005. Are we not adding more people?
Didn’t home prices surge by 20 to 30 percent in California in various markets? The problem with the current boom is that it is based on manipulated supply, artificially low rates, and massive demand from investors. Take one or two of these items away and the market slows down. It has and we have proof with the modest rise in interest rates from last summer. Now we are seeing what happens when some investors begin to pullback.
The affordability question in California
The problem with having a boom and bust market in California is that it forces a winner versus loser situation on families merely looking for homes. Instead of having housing as a small part of the economy and focusing on more important job creating sectors in places like California, housing has become the modern day gold rush. People try to get rich quick and see real estate as the perfect vehicle. These dramatic shifts do not bode well and you see this with massive amounts of young adults living at home or with roommates with little prospect of purchasing a home.
Doctor Housing Bubble
April 2014
The big question for many is whether buying today makes sense. Hopefully the 7 million foreclosures within the last decade highlights that housing isn’t always a simple buying decision. Investors have been dominant in the market since 2009. Big money is clearly pulling back from inflated markets like those in California. This trend is fairly new but even with this minor twist, inventory is picking up and sales are still very low.
It helps to understand that many foreclosures are happening because people are spread thin. People are still maxed out. Unlike big banks with sophisticated deals and systems in place, most households are living paycheck to paycheck even those with higher incomes.
7 million foreclosures and currently 9.1 million seriously underwater home owners. It should be apparent that when it comes to buying a house, you really need to run the numbers. Investors have and they are pulling back from certain markets.
Doctor Housing Bubble
June 2014

Why are builders not out building homes in this hot market? Newer homes typically go to your more traditional buying crowd and carry a premium, a premium that many income constrained households just cannot pay. That is very clear. What we have is a lack of affordable housing based on current financial conditions of US households. The market is largely manipulated and we all know this. The nonsense of “supply and demand” is for a kindergarten school books when you have the Fed buying up nearly 100 percent of all mortgage-backed securities, investor/dark pools of money crowding out regular buyers, mark-to-market fully stunted, and banks essentially dragging their feet like zombies on the foreclosure process only moving when it makes sense in their benefit (after leveraging every penny out of the bailouts). So yes, supply and demand matters if this were a fully normal economic system but alas it is not.

Share this post


Link to post
Share on other sites

At your "cheap prices" sure. That's why the world needs HTB. And your mythical wage inflation.

Generationally cheap in the US yep. Ticked up from the lows, but still far from expensive.

Wage inflation isn't mythical, it's happening. Now. You really need to understand what has been and is going on here. I'm not making this stuff up. It's for real. You're repeating all the same arguments that I heard in 2009 in the housing and equity markets.

What one wants to happen and what is going to happen are two different things. If you're going to be a participant you need to align yourself with the latter and not become overly hung up on the former.

Share this post


Link to post
Share on other sites

Wage inflation isn't mythical, it's happening. Now. You really need to understand what has been and is going on here. I'm not making this stuff up. It's for real. You're repeating all the same arguments that I heard in 2009 in the housing and equity markets.

Not in the UK though.

http://www.theguardian.com/business/2014/jun/11/employment-surges-wages-lag-inflation

The figures also showed that pay growth fell to 0.7%, sharply down from 1.7% the month before and well below inflation, running at 1.8%.

Share this post


Link to post
Share on other sites

Why would a company put up it's workers wages?

If a company had a billion pound on deposit it could decide to put up wages by 4%.

But it's not just the extra money in wages that they have to think about. the billion pound that they have got has just been devalued by 4% as well. In the same way all debt will have gone down by 4%. I think CEO's are more informed today than in the past.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   211 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.