Happy Times Are Here Once Again!

I guess I am wrong about the economy, employment and the gradual slowdown in durable goods, capex and GDP.

It's safe to say that with construction employment on the upswing, the bottom in real estate must be here! And I guess with all this hiring, we best brace ourselves for the following:

-Big upswing in consumer spending
-Large decrease in foreclosures
-Upswing in U.S. auto sales
-Deceleration in personal bankruptcy filings
-Large increase in new home sales, permits and starts
-Significant gains in existing home sales and prices
-Reversal of the deceleration of corporate profits
-Improvement in manufacturing data and ISM
-Surge in corporate capital expenditures

Yeah! It's a soft landing! The business cycle has been revoked! The worst is behind us! It turns out that Greenspan is a financial genius after all.

How could I have ever doubted any part of the economic system, from BLS to the White House to Wall Street!?!

Comments

[robert99]

Woohoo!

2007 Apr 08 06:22 AM

[Doug Stoltz]

I was looking for page 2 of your comments. Your column has a "tongue in cheek" air about it.

2007 Apr 08 10:53 AM

[Sr. Pessimist]

I'll open my big mouth here, because I recall articles reporting contrary to the following:

-Large decrease in foreclosures- I read foreclosures are nastier than anticipated, with about 450,000 units in danger of foreclosure, out of ~9 million total, here in CA.

-Upswing in U.S. auto sales- is that Toyota or Ford? So far no merger, and Ford is still doomed. Foreign auto makers are doing way better than anything based here, and GM is screwed. Kerkorian is trying to buy Chrysler with a $4.5 billion bid, I think, and that's down from his former $20 billion takeover. He's trying to be friends with the mistreated employees. That huge takeover decrease is bad news.

-Large increase in new home sales, permits and starts- What region? I toured CPW Living and got the feeling they'll go about building a second-phase unit when I close on the purchase.

-Significant gains in existing home sales and prices- $2.4 billion in unpaid loans auctioned off as-is, many nonperforming loans sold pennies on the dollar, with New Century bankrupt and the shatter endangering Alt-A borrowers.

-Reversal of the deceleration of corporate profits- Google is growing fast, but they make a hell of a lot of their money off of people clicking their own adsense ads on their own blogs, and advertisers already don't want to keep paying for non-converting marketing. Microsoft is acting fishy, with the EU almost ready to ban their products, playing "you no sue me, I no sue you" games with competitors and "come steal our software if you steal software" with its customers, and pretty much talked spin about their 20 million Vista Licenses being a record against even XP. Citi's CEO was placed in position specifically to trim costs, which have jumped twice as fast as revenues, digging deeply into profit margins. Intel's going to hell, and AMD is already there, as it appears.

-Surge in corporate capital expenditures- Mergers and acquisitions are getting old. What are they spending on? Youtube was a bad purchase. Google is defending itself against a $1 billion Viacom lawsuit. Spending money can be a great thing if the money is an enabler of performing growth or innovation, but if capital expenditures are just plain up, that's not good, given the current level of ineptitude of corporate officer decision makers. One incompetent behemoth buying a smaller incompetent behemoth makes a larger incompetent behemoth, and quantity has a quality all of its own. But if it's too top-heavy, just remove one good worker from a smaller corporation, or a few select workers from a larger one, and watch capital expenditures go through the roof to try and overcome what they lost in their underpaid talent.

Now this is just a little reflection against the listed statements. I could likely draw upon things that support the statements, but my feeling is still that the economy is really, really bad off. I may have been wrong about the stock market's crash chronologically, but the conditions of the economy are pretty crappy.

Plus, we're preparing for a war against Russia and Iran over oil. Russia is a dictatorship, just like America. Saudi Arabia, China, and Russia all have a problem with being accurate in the publicized wording about the problems of global warming. That means they depend on their oil interests to emerge as leaders in the new economy. Saudi Arabia is an absolute monarchy, and the world's largest producer of oil. Russia has immense untapped oil reserves, and China has all the manpower that needs energy input to power up the new global superpower. We have a huge world war coming up over oil. Things are already bad in the Middle East.

My opinion still stands that the economy is bad and getting worse. I hope, however, that you're right, Mr. Ritholtz. I'd rather not see a huge mess hit. I just suspect differently, despite my wishes. Now if currency all dies off, then the proletariat can take charge and end this crap. But conclusions from currency expenditure patterns possibly indicative of economy optimism themselves do not support the end of currency saving the economy.

2007 Apr 09 01:53 AM