Given our administration's diplomatic skills (or lack thereof), our lack of any cohereny policy in Iraq, our blustering and unwillingness to negotiate with Iran without unacceptable preconditions, the expanding war in the middle east, the deteriorating relations with Russia and Venezuela, and the increasing global demand for all, what would give you any idea that oil prices, and thus gas prices, would decline? As for inflation, why would that decline when passthrough lags price rises in energy, and we are still pushing upward in energy prices? Hello, can you say recession???
But look at those thinking the economy will improve next year. Only 5% of those polled!
I wonder what high end country club they found those folks?
As for the 'predictive power' - my guess is it is a better predictor of political sentiment than future economic behavior. Incumbents of both parties - but especially the majority - can't be too happy about these numbers.
Even given the almost birth-right entrenchment of incumbents, this could prove to be an interesting mid-term election.
FWIW, I'm voting anti-incumbent straight down the ticket this fall, and I'm not alone, in that I know. There has never been a better time for a third party to begin to emerge than now.
"I wonder what high end country club they found those folks?"
I had a good laugh, and there may be something to what you say.
PAUL KRUGMAN (NYT, 7/14/06): "Heres what happened in 2004 [the latest year for which data is available]. The U.S. economy grew 4.2 percent, a very good number. Yet ... real median family income ... actually fell.... So where did the growth go?
"[E]ven if you exclude capital gains from a rising stock market, in 2004 the real income of the richest 1 percent of Americans surged by almost 12.5 percent. Meanwhile, the average real income of the bottom 99 percent of the population rose only 1.5 percent. In other words, a relative handful of people received most of the benefits of growth.... Even people at the 95th percentile of the income distribution that is, people richer than 19 out of 20 Americans gained only modestly."
cr, maybe so, but nobody's told the truckers. I came over the grapevine yesterday & I sure saw PLENTY of trucks. It's my guess we're still muddling along, with credit card companies still lending a LOT of free money, mtg. lenders still trying to identify that last sucker and equity hawkers about to start a little run (albeit a short one)if BB bites on the urgency of trumped-up personal horror stories.
I think you & I are in agreement where this cycle is likely to end up, but when it starts is still anecdotal. The FDIC outlook you linked to was interesting. If I had to guess, I'd cry uncle on my summer '06 call & move my guesstimate back to your '07 bet with the impetus being the huge mtg. resets we'll see.
One sure bet, the redcoats will do all possible to get through this off-year election. Keep up the good work.
You see alot of trucks? I don't. Sure I "see" "Trucks" but you are being subjective.
The real truth is, the economy is being brought down by Housing which looks to dip into negative territory for growth in 2-3 months(a rough figure, for sure, but probably about right) which will continue to deepen into 2007. That will cause the US economy as a whole being, to contract. Yet, the stupid nomads who speak annoying run on sentences do not even give the hint of this. Once this contraction begins and 2007 business models are changed in the Real Estate industry to deal with decline, conditions will fall a good deal in the US.
That is when the country is most open to a crash. What does the rest of the economy do? What do the foreigners do? Really simple as that. The bloodletting is about ready............
To follow on what Anonymous | 07.26.06 - 10:49 pm said... has anyone ever looked at 'volatility' in polls like the one cited above or consumer confidence?
I know they all compute 'sample error' but people's opinions aren't usually rock solid... there has to be more than just sample error at play the way these numbers bounce around.
Anonymous, as I noted in my post, the research shows consumer confidence numbers (especially from the conference board) are really trailing indicators - so I don't really follow them. The only reason I posted this poll was the surprising drop in the number of people that think the economy will improve. And that should be viewed with caution too.
There's really no surprise that consumer confidence is a backwards looking measure with little predicitve value. After all that's WHY we get momentum-driven speculative bubbles. The real question is: "Just how far back to people look when making various economic decisions? Do they look farther back when making long term (a house) decisions than shorter term (dish or cable) ones?"
Grapevine: 20 years ago we made a family trip down I5 to LA and it is boring to the max. I had the kids count cars and trucks as a way to keep them from fighting eachother. The ratio mid day mid week was 50 trucks to 1 car!!!
Forward looking indicators? Like real wage growth? Wealth effects from asset appreciation or changes to the tax code? I wonder where we could be headed?
That more people consider their own position getting worse than the economy getting worse is rather striking. I would have thought their own position would set the floor for their opinions on the economy. Any idea on how frequently has this occurred in the past?
That more people consider their own position getting worse than the economy getting worse is rather striking. I would have thought their own position would set the floor for their opinions on the economy. Any idea on how frequently has this occurred in the past?
Ya - everyone is having fun but me.
Not a good sign. My guess - and only a guess - is you would have to go back quite a ways to find similar situations.
However it has happened regionally A LOT - as recently as the late 90s where everyone in the middle thought the west coast had all the fun. Okay west coast & wall street.
But it wasn't too long before that when the worst part of the early 90s recession was happening on the coast & middle America was doing okay (farm country was doing great).
Can't remember a time when the whole country thought the other guy was having all the fun.
Who is that other guy anyway? Does he have single kids? Mine aren't married.
Given our administration's diplomatic skills (or lack thereof), our lack of any cohereny policy in Iraq, our blustering and unwillingness to negotiate with Iran without unacceptable preconditions, the expanding war in the middle east, the deteriorating relations with Russia and Venezuela, and the increasing global demand for all, what would give you any idea that oil prices, and thus gas prices, would decline? As for inflation, why would that decline when passthrough lags price rises in energy, and we are still pushing upward in energy prices? Hello, can you say recession???
But look at those thinking the economy will improve next year. Only 5% of those polled!
I wonder what high end country club they found those folks?
As for the 'predictive power' - my guess is it is a better predictor of political sentiment than future economic behavior. Incumbents of both parties - but especially the majority - can't be too happy about these numbers.
Even given the almost birth-right entrenchment of incumbents, this could prove to be an interesting mid-term election.
FWIW, I'm voting anti-incumbent straight down the ticket this fall, and I'm not alone, in that I know. There has never been a better time for a third party to begin to emerge than now.
"I wonder what high end country club they found those folks?"
I had a good laugh, and there may be something to what you say.
PAUL KRUGMAN (NYT, 7/14/06): "Heres what happened in 2004 [the latest year for which data is available]. The U.S. economy grew 4.2 percent, a very good number. Yet ... real median family income ... actually fell.... So where did the growth go?
"[E]ven if you exclude capital gains from a rising stock market, in 2004 the real income of the richest 1 percent of Americans surged by almost 12.5 percent. Meanwhile, the average real income of the bottom 99 percent of the population rose only 1.5 percent. In other words, a relative handful of people received most of the benefits of growth.... Even people at the 95th percentile of the income distribution that is, people richer than 19 out of 20 Americans gained only modestly."
cr, maybe so, but nobody's told the truckers. I came over the grapevine yesterday & I sure saw PLENTY of trucks. It's my guess we're still muddling along, with credit card companies still lending a LOT of free money, mtg. lenders still trying to identify that last sucker and equity hawkers about to start a little run (albeit a short one)if BB bites on the urgency of trumped-up personal horror stories.
I think you & I are in agreement where this cycle is likely to end up, but when it starts is still anecdotal. The FDIC outlook you linked to was interesting. If I had to guess, I'd cry uncle on my summer '06 call & move my guesstimate back to your '07 bet with the impetus being the huge mtg. resets we'll see.
One sure bet, the redcoats will do all possible to get through this off-year election. Keep up the good work.
You see alot of trucks? I don't. Sure I "see" "Trucks" but you are being subjective.
The real truth is, the economy is being brought down by Housing which looks to dip into negative territory for growth in 2-3 months(a rough figure, for sure, but probably about right) which will continue to deepen into 2007. That will cause the US economy as a whole being, to contract. Yet, the stupid nomads who speak annoying run on sentences do not even give the hint of this. Once this contraction begins and 2007 business models are changed in the Real Estate industry to deal with decline, conditions will fall a good deal in the US.
That is when the country is most open to a crash. What does the rest of the economy do? What do the foreigners do? Really simple as that. The bloodletting is about ready............
CR any comments on consumer confidence numbers suprising to the upside yesterday?
To follow on what Anonymous | 07.26.06 - 10:49 pm said... has anyone ever looked at 'volatility' in polls like the one cited above or consumer confidence?
I know they all compute 'sample error' but people's opinions aren't usually rock solid... there has to be more than just sample error at play the way these numbers bounce around.
Anonymous, as I noted in my post, the research shows consumer confidence numbers (especially from the conference board) are really trailing indicators - so I don't really follow them. The only reason I posted this poll was the surprising drop in the number of people that think the economy will improve. And that should be viewed with caution too.
Best Wishes.
"FWIW, I'm voting anti-incumbent straight down the ticket this fall"
Do you happen to live in one of the few toss-up states?
There's really no surprise that consumer confidence is a backwards looking measure with little predicitve value. After all that's WHY we get momentum-driven speculative bubbles. The real question is: "Just how far back to people look when making various economic decisions? Do they look farther back when making long term (a house) decisions than shorter term (dish or cable) ones?"
Grapevine: 20 years ago we made a family trip down I5 to LA and it is boring to the max. I had the kids count cars and trucks as a way to keep them from fighting eachother. The ratio mid day mid week was 50 trucks to 1 car!!!
Forward looking indicators? Like real wage growth? Wealth effects from asset appreciation or changes to the tax code? I wonder where we could be headed?
That more people consider their own position getting worse than the economy getting worse is rather striking. I would have thought their own position would set the floor for their opinions on the economy. Any idea on how frequently has this occurred in the past?
That more people consider their own position getting worse than the economy getting worse is rather striking. I would have thought their own position would set the floor for their opinions on the economy. Any idea on how frequently has this occurred in the past?
Ya - everyone is having fun but me.
Not a good sign. My guess - and only a guess - is you would have to go back quite a ways to find similar situations.
However it has happened regionally A LOT - as recently as the late 90s where everyone in the middle thought the west coast had all the fun. Okay west coast & wall street.
But it wasn't too long before that when the worst part of the early 90s recession was happening on the coast & middle America was doing okay (farm country was doing great).
Can't remember a time when the whole country thought the other guy was having all the fun.
Who is that other guy anyway? Does he have single kids? Mine aren't married.