Q1 ’07 GDP

[LA_Renter]

“The export number is key, as exports add directly to GDP.”

The only problem with that is we are not set up to benefit from a falling dollar with exports.

“Analysts said the bulging US trade deficit, which is especially pronounced with China, as well as the housing market downturn have conspired to hobble growth.

US exports fell 1.2 percent in the January-March quarter while imports rose 2.3 percent, contributing to the weakest overall growth pace since the first quarter of 2003 when America launched a war to topple former Iraqi leader Saddam Hussein.

Rising demand for imported goods can dent growth, especially if it means that Americans, for example, are buying more foreign-made cars than comparable models made in Detroit.”

[LA_Renter]

Herewego,

You may have a good point there. I just ran across this.

“Trade provided the biggest surprise, when exports fell unexpectedly and imports continued growing, subtracting half a percentage point from economic growth, according to the report.

Economists pointed out that the preliminary data on trade is particularly sketchy because the government did not yet have a good handle on exports and imports in March. But the data bewildered some analysts, who pointed out that the combination of a weak dollar and faster growth in Europe and elsewhere should be providing a lift to exports.

“We completely discount this number,” said Nariman Behravesh, chief economist at Global Insight of Lexington, Mass. “It’s inconsistent with everything else going on in the world.”

He suggested the estimate for first-quarter exports could be revised upward. And if not, he predicted, exports should record a sharp upswing in the spring quarter that is under way now.”

There is a strong tug of war going on. Let’s see how consumer spending plays out also. Right now that data is like looking into a rear view mirror.

[HereWeGo]

LA-

Had the Q1 earnings come in at or below expectations, then I would tend to agree with the recession forecast. But given that Q1 earnings were so strongly buttressed by international sales/revenue, it’s tough to stick with that forecast at this point.

That said, if someone wants to play the bear game, I think there are opportunities for shorts and puts, but I would focus on sectors and companies that have little international exposure and strong housing exposure. Off the top of my head, furniture companies, maybe discretionary spending (certainly discretionary spending focused in bubble RE markets,) maybe lenders, but be wary of potential buyouts.

[Anonymous]

Aw, FSD, the boys at the Commerce Department are piling on, now:

http://news.yahoo.com/s/ap/20070531/ap_on_bi_go_ec_fi/economy_26;_ylt=Ar65_ehPn1EnH0najQ6xKy4E1vAI

2.0% GDP growth is a distant memory, isn’t it? And, it will be for many, many years.

[Anonymous]

Aw, FSD, the boys at the Commerce Department are piling on, now:

http://news.yahoo.com/s/ap/20070531/ap_on_bi_go_ec_fi/economy_26;_ylt=Ar65_ehPn1EnH0najQ6xKy4E1vAI

2.0% GDP growth is a distant memory, isn’t it? And, it will be for many, many years.

[(former)FormerSanDiegan]

Once I saw that news, I figured it would cheer you up.
I see that the stock market yawned at the report (for now at least).

Ahh, the good old days of anemic 2% growth, how I long for thee.

[(former)FormerSanDiegan]

Once I saw that news, I figured it would cheer you up.
I see that the stock market yawned at the report (for now at least).

Ahh, the good old days of anemic 2% growth, how I long for thee.

[4plexowner]

Some of the stuff I’ve read about capitalism says that it MUST continue to expand forever – the only other option is collapse

ie, there is no steady-state end game in a capitalistic system

Another interesting idea (which George Ure at http://www.urbansurvival.com talks about fairly often) is how a culture grows in a petri dish – the culture will grow at whatever its growth rate is UNTIL it hits the edge of the petri dish (runs out of resources) – George believes that humans are very near the edge of the dish at this point

Tying these two ideas together says that we need some amount of growth but we have limitted resources so we might choose to limit the rate of growth

How’s that for a long-winded way of saying, 2% growth is much better than 10% growth

[4plexowner]

Some of the stuff I’ve read about capitalism says that it MUST continue to expand forever – the only other option is collapse

ie, there is no steady-state end game in a capitalistic system

Another interesting idea (which George Ure at http://www.urbansurvival.com talks about fairly often) is how a culture grows in a petri dish – the culture will grow at whatever its growth rate is UNTIL it hits the edge of the petri dish (runs out of resources) – George believes that humans are very near the edge of the dish at this point

Tying these two ideas together says that we need some amount of growth but we have limitted resources so we might choose to limit the rate of growth

How’s that for a long-winded way of saying, 2% growth is much better than 10% growth

[(former)FormerSanDiegan]

4plex – I’d agree that 2% growth is better than 10%. But I am not sure whether I would agree that 10% growth comes at the expense of using 5x the natural resources of 2% growth.

[(former)FormerSanDiegan]

4plex – I’d agree that 2% growth is better than 10%. But I am not sure whether I would agree that 10% growth comes at the expense of using 5x the natural resources of 2% growth.

[Author]

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