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Oh I guess this is where you change the topic again. Not only is having cash on hand much different than having a profit, but corporate profits although increasing are still much lower than pre-recession levels! .
Gee "Corporate profits are still much lower than pre-recession levels!" - Well DUH! That's because that was "PRE-RECESSION". What a stupid "observation" you just made. In effect what you just said was "companies made more profit when times were good than when the economy is just starting to come out of recession". Did you think that up all by yourself? LOL
Quote:
Originally Posted by user_id
I always get a kick when people tell you to "learn the facts" when they say something not supported by facts. Peak spending should be in the 2010 Q1, but peak growth from the stimulus was in 2009 Q3. See the charts here:
Hence, the stimulus effect on growth is starting to wear off.
What I said is true, feel free to cite information that shows otherwise. And please, don't change the topic again. It is the stimulus' effect on growth that is at issue here, not how much stimulus money is left.
The issue is that the stimulus money was spent most quickly at first and the rest is going to be applied more slowly over a longer period of time.
You didn't do well in math did you (or logic for that matter) did you?
The stimulus effects are not starting to "wear off" - the RATE of "CHANGE" is slowing down after an initial burst of money - but that IMPACT is CUMULATIVE.
LOL
You guys can post weblinks from CNBC, Money, etc etc etc. all day long to do your arguing for you. They are all irrelevant. There are as many predictions as positions. I'm not one to listen to pundits talk about the economy. They were all 100% wrong in predicting the current crisis and they are completely wrong in reporting statistics they don't even understand. The real question that should be asked is this:
What has been changed in the economy to fix the problems that caused it to fall apart in the first place?
Nobody ever talks about that because the answer is nothing. Not one article that has been posted in this topic mentions that. Some of that reporting is no better than witch doctors reading chicken entrails to predict the future.
Take away the federal goverment spending and this economy shuts down. Period. The interesting thing about that really becomes how long can they keep it up. If I were not living in the country, it would be a fascinating study of a society self destructing because it has forgotten the difference between creating wealth and consuming wealth. Unfortunately I do live here, and I don't see anything, and I mean nothing at all, at street level that shows things are getting better. In fact there is every sign that it is going to get worse.
(I will admit they are doing what they can to create a bubble that will last, hopefully for them, until the 2010 elections are over. )
Gee "Corporate profits are still much lower than pre-recession levels!" - Well DUH! That's because that was "PRE-RECESSION". What a stupid "observation" you just made...
You are ignoring the point. Even during good times corporate profits do not translate into having cash on hand, but suggesting that because corporate profits have increased a bit from the depths of the recession that they are some how flush with cash is just absurd.
Quote:
Originally Posted by LordBalfor
The stimulus effects are not starting to "wear off" - the RATE of "CHANGE" is slowing down after an initial burst of money - but that IMPACT is CUMULATIVE.
Right the rate of change will slow down after 2009 Q3, that is to say the effects of the stimulus are wearing off in terms of GDP.
You are ignoring the point. Even during good times corporate profits do not translate into having cash on hand, but suggesting that because corporate profits have increased a bit from the depths of the recession that they are some how flush with cash is just absurd.
Really?
"The balance sheets of large U.S. corporations are for the most part in good shape. Many big companies have piles of cash on hand and credit markets have thawed so that they can raise new funds. Between Jan. 1 and Nov. 2, U.S. corporations overall raised $740.8 billion by issuing bonds, up from the $522.2 billion raised during the same period last year and almost as much as the $779.8 billion raised in the go-go year of 2007."
The fact is, US corporations as a whole have a LOT of cash on hand and are at this point simply waiting until they are more certain the recovery is taking hold. Once they are more sure, they will reinvest that money and begin growing again.
The real question that should be asked is this:What has been changed in the economy to fix the problems that caused it to fall apart in the first place?
This is not really the "real question", as business cycles and bubbles are a normal part of capitalist economies. The economy will self-adjust, the only question is whether the government can make it happen quicker or not.
The government will undoubtedly pass new regulations, etc that will prevent a repeat of the same events. But years down the road they will be another bubble with a different form.
This is not really the "real question", as business cycles and bubbles are a normal part of capitalist economies. The economy will self-adjust, the only question is whether the government can make it happen quicker or not.
The government will undoubtedly pass new regulations, etc that will prevent a repeat of the same events. But years down the road they will be another bubble with a different form.
"The balance sheets of large U.S. corporations are for the most part in good shape. Many big companies have piles of cash on hand and credit markets have thawed so that they can raise new funds. Between Jan. 1 and Nov. 2, U.S. corporations overall raised $740.8 billion by issuing bonds, up from the $522.2 billion raised during the same period last year and almost as much as the $779.8 billion raised in the go-go year of 2007."
The fact is, US corporations as a whole have a LOT of cash on hand and are at this point simply waiting until they are more certain the recovery is taking hold. Once they are more sure, they will reinvest that money and begin growing again.
What is your point here? This does not show that corporate profits translate into having piles of cash. In fact, it mentions companies raising funds by selling stock, selling bonds, etc. Furthermore, as I said previously, there are certainly some corporations that have "piles of cash" and there are other corporations that have piles of debt. How does the situation look in the aggregate? Even this article mentions that smaller corporations are having problems raising funds.
What is your point here? This does not show that corporate profits translate into having piles of cash. In fact, it mentions companies raising funds by selling stock, selling bonds, etc. Furthermore, as I said previously, there are certainly some corporations that have "piles of cash" and there are other corporations that have piles of debt. How does the situation look in the aggregate? Even this article mentions that smaller corporations are having problems raising funds.
Its funny to what degree you want to twist facts.
I'm not twisting anything.
The fact is, a LOT of American companies are now having good profits AND have lots of cash on hand (as I've already posted - just look back at the financial news and see just how many firms reported good profits (that beat expectations) and have boosted their outlook (it's a LOT)). This is particularly true for larger companies - but also true for many medium and even some smaller firms.
The worst of the shakeout of weak companies is already done. It's not entirely completed yet, but for the most part it's DONE. Companies have tightened their belts and shored up their balance sheets to weather the storm - and NOW as the economy start to recover and sales pick up (as they did this holiday season) those companies will be in a position to GROW (using the cash they have on hand to do so).
And as the job cuts END (which we are just about at that point) consumers will be less nervous about losing their jobs and open their pocketbooks more (even aside from any additional hiring that happens). That's ALWAYS the way it works - and this time will be no exception.
Yes you are, you keep changing the topic and implying things from data that can't be implied.
Quote:
Originally Posted by LordBalfor
The fact is, a LOT of American companies are now having good profits AND have lots of cash on hand (as I've already posted - just look back at the financial news and see just how many firms reported good profits (that beat expectations) and have boosted their outlook (it's a LOT)).
This is so vague as to be meaningless. What is "good profits" mean? What is "a lot"? There are certainly companies that are doing rather well right now, there are also many companies that are doing poorly. It would be just as accurate for me to say "A LOT of American companies are going bankrupt and have horrible profits".
Again, the key question is what does it look like in the aggregate?
Furthermore suggesting that because profits beat expectation in no sense implies that they are "good profits". The expectations are all rather low right now!
Quote:
Originally Posted by LordBalfor
The worst of the shakeout of weak companies is already done. It's not entirely completed yet, but for the most part it's DONE.
This is highly inaccurate. There is a large amount of buyout debt that will be coming due over the next few years. This debt was structured in much the same way mortgage debt was structured and suffers from similar problems. Whether this turns into another crisis or not depends on a variety of issues, but at the very least its going to result in a number of companies failing.
Quote:
Originally Posted by LordBalfor
Companies have tightened their belts and shored up their balance sheets to weather the storm - and NOW as the economy start to recover and sales pick up (as they did this holiday season) those companies will be in a position to GROW
Some companies have done that, and some are over burdened with debt. Again, what does the situation look like in the aggregate? Furthermore, as I stated before the question is what form the recovery will have not whether there will be a recovery.
A recovery over 5~10 years is going to be painful and result in long term cultural changes.
This is not really the "real question", as business cycles and bubbles are a normal part of capitalist economies. The economy will self-adjust, the only question is whether the government can make it happen quicker or not. ...
It's a nonsensical response to the question but not one that is surprising. if it is in fact a component of a normal business cycle then the failure should be very easy to quantify and correct. Especially one that you say will self correct.
A cycle is predictable and if a cycle is predictable then it's components are predictable. That is why they call them cycles. LOL This logic fails.
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LOL
