Thread: The strongest economy in the world

Originally Posted by Panda

There is an old saying,--- if you put a frog in a pot of hot water he will jump straight out. But if you put him in a pot of cool water and slowly turn up the heat, he will sit there and cook.

Oh! I saw that demonstrated on Glenn Beck!

Originally Posted by Jet Gorgon

Originally Posted by Panda

There is an old saying,--- if you put a frog in a pot of hot water he will jump straight out. But if you put him in a pot of cool water and slowly turn up the heat, he will sit there and cook.

Oh! I saw that demonstrated on Glenn Beck!

Somebody put Glen Beck in a pot of water...?

Originally Posted by Jet Gorgon

Originally Posted by Panda

There is an old saying,--- if you put a frog in a pot of hot water he will jump straight out. But if you put him in a pot of cool water and slowly turn up the heat, he will sit there and cook.

Oh! I saw that demonstrated on Glenn Beck!

Of course it was, despite it's having been proved to be utter bullshit:
snopes.com: Slow Boiled Frog

Originally Posted by robuzo

Of course it was, despite it's having been proved to be utter bullshit: snopes.com: Slow Boiled Frog

Damn. Learn something new everyday.

I hope no frogs were injured disproving the myth.
They got enough problems with global warming and a nasty fungus wiping them out.

Originally Posted by robuzo

Originally Posted by Jet Gorgon

Originally Posted by Panda

There is an old saying,--- if you put a frog in a pot of hot water he will jump straight out. But if you put him in a pot of cool water and slowly turn up the heat, he will sit there and cook.

Oh! I saw that demonstrated on Glenn Beck!

Of course it was, despite it's having been proved to be utter bullshit:
snopes.com: Slow Boiled Frog

Thanks for taking the fall on that one.

Restaurants are feeling the slowdown, as we know.

Chain restaurants struggle, compete for customers


CHICAGO (AP) -- Fortunes at chain restaurants are tumbling, the fallout from a strategy of slashing menu prices in the hopes that a cheap meal will be enough to entice diners back to their booths.

Instead, diners are ringing up smaller checks, or simply staying home.

And the deep discounts, like the two meals for $20 being offered at places such as Chili's and Applebee's, come with a high cost for sales and profits. Some worry the chains are creating a culture of diners looking only for a cheap meal.

"These companies are competing any way they can to get customers in the door," said Morningstar restaurant analyst R.J. Hottovy.

While the discounts became prevalent earlier this year, the problems restaurants are facing stem from when the U.S. economy was flush, people were eating out more and developers could get easy credit for construction projects.

Since 2001, the number of so-called "casual dining" restaurants in the U.S. has grown 14 percent, according to market research firm NPD Group. The number of chain restaurants in the category has grown by more than 26 percent.

That growth may have been simply too ambitious, and now there's quiet speculation that some chains may not survive the economic downturn.

"We don't think this trend is sustainable," Hottovy said of the efforts among the faltering restaurant chains to lure in new customers.

Brinker International, which reported first-quarter results Tuesday and owns 1,700 restaurants, most of them Chili's Grill & Bars, said customer traffic fell for the 21st consecutive quarter.

Meanwhile, revenue skidded 21 percent and profit sank 34 percent, despite efforts around its three-course meal deals for two, priced at $20. That sent shares down more than 11 percent Tuesday, and the stock continued to decline Wednesday, falling 48 cents, or another 3.3 percent, to $14.17 in late-afternoon trading.

Despite the roughly 5 percent decrease in customer traffic, the offer is bringing in customers, temporarily. But Stifel Nicolaus & Co. analyst Steve West said the deal is cutting into profits for diners whose dollars will be fleeting -- a trend that was apparent in September already the company temporarily shelved the promotion and saw fewer customers.

"Customers are conditioned to 'shop the discounts,' as sales declined when promotions were absent -- a dangerous line to walk, in our view," West wrote to investors in a research note.

On Wednesday, Asian-themed eatery P.F. Chang's China Bistro Inc. delivered disappointing results, too. Even as net income rebounded from last year when it was weighed down by a one-time charge, customer traffic was off as much as 7 percent.

Its shares fell $2.49, or 7.4 percent, to $31.14 in late trading Wednesday.

Late Tuesday, Japanese steakhouse owner Benihana Inc. said sales in locations open at least a year fell almost 10 percent during its most recent quarter. That comes after the measure fell 6.5 percent the year earlier. Its shares sank 34 cents, or 6.2 percent, to $5.19 in late afternoon trading Wednesday.

And earlier this month, Ruby Tuesday said its revenue fell 7 percent. It attributed the sales decline to operating 45 fewer restaurants this year and said customer count actually managed to grow during in the quarter -- something analysts partially attributed to its offer of offering a $10 entree free with the purchase of another entree.

But sales in locations open at least a year, an important restaurant measure, fell 3.1 percent, showing diners were spending less when they did come in.

http://finance.yahoo.com/news/Chain-...04496.html?x=0
__________________

^ I heard hot dog vendor sales are up.

"Asian leaders are considering rival plans from Australia and Japan for an EU-style economic and political bloc, as they wrap up the East Asia Summit in Thailand."
ASEAN leaders consider EU-style bloc - ABC News (Australian Broadcasting Corporation)

and

"China-ASEAN FTA to accelerate RMB regionalization"
China-ASEAN FTA to accelerate RMB regionalization_English_Xinhua


"Alongkorn Ponlaboot, deputy minister of commerce of Thailand, believed RMB would play a more important role in bilateral trade between China and ASEAN in the future. He said yuan was a very stable currency and expanding its use could help reduce risks faced by the ASEAN countries in using the U.S. dollar, which has become highly volatile as a result of the global financial crisis"

Quite obviously the two articles have a common thread. There appears to be moves afoot to cultivate the domestic Asian consumer market and move away from the $US hegemony.

Another link I'm afraid, but worth a quick peep

its about debt, spending, government obligations etc. Pretty shocking group of stats and observations!

linky

Originally Posted by Milkman

Very true, Hootad, and welcome back to the board

Cheers!

Originally Posted by Panda

"Asian leaders are considering rival plans from Australia and Japan for an EU-style economic and political bloc, as they wrap up the East Asia Summit in Thailand."
ASEAN leaders consider EU-style bloc - ABC News (Australian Broadcasting Corporation)

and

"China-ASEAN FTA to accelerate RMB regionalization"
China-ASEAN FTA to accelerate RMB regionalization_English_Xinhua


"Alongkorn Ponlaboot, deputy minister of commerce of Thailand, believed RMB would play a more important role in bilateral trade between China and ASEAN in the future. He said yuan was a very stable currency and expanding its use could help reduce risks faced by the ASEAN countries in using the U.S. dollar, which has become highly volatile as a result of the global financial crisis"

Quite obviously the two articles have a common thread. There appears to be moves afoot to cultivate the domestic Asian consumer market and move away from the $US hegemony.

Originally Posted by Spin

Another link I'm afraid, but worth a quick peep

its about debt, spending, government obligations etc. Pretty shocking group of stats and observations!

linky

Thanks for the link Spin, another scary outlook, but fits with Pandas post, what is extraordinary is that the ASEAN comes out with a statement like that in the open, the other big players have tried to keep their slow move away from the total dependence on the Dollar as a reserve currency quiet not to create a sudden collapse of the Dollar, I'm not sure how diplomatic smart they think this message from ASEAN is, as from your link Spin the quote from Hemingway- "a man goes broke slowly, then all at once"

Look at the bright side There be big changes afoot and we all have ringside seats!

I am kind of enjoying getting to see the end result of many years of screwing the pooch.

"May you live in interesting times" was'nt that an old chinese proverb or curse?

Originally Posted by Muadib

Worldwide, investors and analysts now view the U.S. as the weak link in the global economy, with its markets seen as among the riskiest by a plurality of those surveyed. One in four respondents expects an unemployment rate of 11 percent or more a year from now, compared with a U.S. administration forecast of 9.7 percent. The jobless rate now is 9.8 percent, a 26-year high.

All through next year.

Dollar’s Decline

The skepticism about the U.S. is taking a toll on the dollar, with a plurality of respondents saying it will weaken against most other currencies in the next year, the yen being the major exception among the 11 currencies tested. Thirty-seven percent say the dollar should not continue as the world’s reserve currency in 10 years.

The USD needs faith. Faith is waning.

From Bangkok Post d.31/10

US consumer spending dips suddenly

US consumer spending, a critical growth driver, fell for the first time in five months in September, official data showed Friday amid fears the economy may slow just after exiting recession.
<img alt="" border="1" vspace="3" hspace="3"> A girl shops at H&M Boutique in New York City on October 24, 2009. US consumer spending fell for the first time in five months in September after a government program boosting auto sales ran out, official data showed Friday.

Household spending decreased 47.2 billion dollars or 0.5 percent last month, as expected by most economists, following a revised 1.4 percent jump in August, the Commerce Department said. It was the biggest drop since December 2008.
The fall in spending came as Americans' income turned flat in September following a 0.1 percent increase the previous month as the country emerged from nearly two years of recession stemming from a home mortgage crisis.
The spending decline was attributed largely to the August end of a highly popular "cash-for-clunkers" program, which gave consumers a tax credit toward the price of a new car or truck if they traded in a less fuel-efficient vehicle.
The program spurred consumer spending that fueled economic growth in the third quarter after a year of contractions, hauling the world's largest economy from the worst recession since the Great Depression, government data showed Thursday.
After shrinking a sharp 6.4 percent in the first quarter, the world's largest economy has been on life support from the federal 787-billion-dollar emergency stimulus and other crisis measures.
"The takeaway is that stimulus efforts helped turn the economy around in the third quarter. Once the cosmetics are taken away, though, will things look as pretty? Probably not," said Patrick O'Hare, analyst at Briefing.com.
"We expect a growth relapse in the next few quarters -- though not into negative territory," said Nariman Behravesh, chief economist of IHS Global Insight.
Consumer spending could grow but at a more subdued pace due to rising unemployment, resulting in lack of income support, reduced wealth, high debt and tight credit, according to IHS Global Insight.
US consumer confidence has also slumped.
The University of Michigan said Friday its final index reading of American consumer sentiment in October dropped to 70.6, from 73.5 in September, which was the highest in more than a year.
The Conference Board, a private research firm, said earlier in the week its consumer confidence index declined for the second month in a row.
"The lack of meaningful improvement in consumer sentiment evident in the latest data illustrates how troubled the job market is and how much uncertainty remains over the initial strength of the recovery," said Ryan Sweet, a senior economist with Moody's Economy.com.
The unemployment rate is expected to hit 10 percent in October for the first time since 1983.
High Frequency Economics, a research firm, said that US gross domestic product (GDP) would expand by a mere one percent in the fourth quarter and between one and two percent through 2010.
"And even that modest performance assumes there will be another federal fiscal stimulus package next spring, if only to offset the inevitable further tightening in the state and local level," said its chief US economist Ian Shepherdson.
But analysts at Barclays Capital and Deutsche Bank think growth could accelerate.
"The mix between final demand and inventories points to noticeable further strengthening in economic activity over the next couple of quarters at least relative to our earlier projections," said Joseph LaVorgna of Deutsche Bank.
"In particular, the immediate need for producers to restock inventories to meet stronger-than-anticipated demand will most likely lead to a bulge in GDP growth this quarter and next," he said.
Growth should accelerate to four percent in fourth quarter 2009 and five percent in first quarter 2010," said economist Dean Maki of Barclays Capital.










Very conflicting expectations ???

An article written by Ron Paul on October 30, 2009. (Yesterday.)

http://mensnewsdaily.com/sexandmetro...for-the-worst/

Friday, October 30, 2009
Be Prepared for the Worst
by Ron Paul

Any number of pundits claim that we have now passed the worst of the recession. Green shoots of recovery are supposedly popping up all around the country, and the economy is expected to resume growing soon at an annual rate of 3% to 4%. Many of these are the same people who insisted that the economy would continue growing last year, even while it was clear that we were already in the beginning stages of a recession.

A false recovery is under way . I am reminded of the outlook in 1930, when the experts were certain that the worst of the Depression was over and that recovery was just around the corner. The economy and stock market seemed to be recovering, and there was optimism that the recession, like many of those before it, would be over in a year or less. Instead, the interventionist policies of Hoover and Roosevelt caused the Depression to worsen, and the Dow Jones industrial average did not recover to 1929 levels until 1954. I fear that our stimulus and bailout programs have already done too much to prevent the economy from recovering in a natural manner and will result in yet another asset bubble.

Anytime the central bank intervenes to pump trillions of dollars into the financial system, a bubble is created that must eventually deflate. We have seen the results of Alan Greenspan’s excessively low interest rates: the housing bubble, the explosion of subprime loans and the subsequent collapse of the bubble, which took down numerous financial institutions. Rather than allow the market to correct itself and clear away the worst excesses of the boom period, the Federal Reserve and the U.S. Treasury colluded to put taxpayers on the hook for trillions of dollars. Those banks and financial institutions that took on the largest risks and performed worst were rewarded with billions in taxpayer dollars, allowing them to survive and compete with their better-managed peers.

This is nothing less than the creation of another bubble. By attempting to cushion the economy from the worst shocks of the housing bubble’s collapse, the Federal Reserve has ensured that the ultimate correction of its flawed economic policies will be more severe than it otherwise would have been. Even with the massive interventions, unemployment is near 10% and likely to increase, foreigners are cutting back on purchases of Treasury debt and the Federal Reserve’s balance sheet remains bloated at an unprecedented $2 trillion. Can anyone realistically argue that a few small upticks in a handful of economic indicators are a sign that the recession is over?

What is more likely happening is a repeat of the Great Depression. We might have up to a year or so of an economy growing just slightly above stagnation, followed by a drop in growth worse than anything we have seen in the past two years. As the housing market fails to return to any sense of normalcy, commercial real estate begins to collapse and manufacturers produce goods that cannot be purchased by debt-strapped consumers, the economy will falter. That will go on until we come to our senses and end this wasteful government spending.

Government intervention cannot lead to economic growth. Where does the money come from for Tarp (Treasury’s program to buy bad bank paper), the stimulus handouts and the cash for clunkers? It can come only from taxpayers, from sales of Treasury debt or through the printing of new money. Paying for these programs out of tax revenues is pure redistribution; it takes money out of one person’s pocket and gives it to someone else without creating any new wealth. Besides, tax revenues have fallen drastically as unemployment has risen, yet government spending continues to increase. As for Treasury debt, the Chinese and other foreign investors are more and more reluctant to buy it, denominated as it is in depreciating dollars.

The only remaining option is to have the Fed create new money out of thin air. This is inflation. Higher prices lead to a devalued dollar and a lower standard of living for Americans. The Fed has already overseen a 95% loss in the dollar’s purchasing power since 1913. If we do not stop this profligate spending soon, we risk hyperinflation and seeing a 95% devaluation every year.

Ron Paul is a Republican congressman from Texas

200+ point daily swings in the US markets is driving the VIX crazy... There is fear in the air...

VIX Volatility Index Hits Highest Level Since July - WSJ.com

VIX Volatility Index Hits Highest Level Since July

By GEOFFREY ROGOW

The stock market's so-called fear gauge jumped to its highest level in nearly four months Friday, moving above a mark that traditionally indicates heightened concern among traders.

The Chicago Board Options Exchange's volatility index hit an intraday high of 31.25, its highest level since July 8, amid a stock market sell-off inspired by renewed concerns about the sustainability of any economic recovery. The VIX was recently up 22% at 30.22, while the Dow Jones Industrial Average fell 238 to 9725.

The move comes at the end of an exceptionally volatile week. On Thursday, the VIX dropped more than 11% and stocks showed their biggest gains since July following news that third-quarter U.S. gross domestic product rose more than expected.

The sharp rise for the VIX above the key 30 level provides the latest evidence that investors are increasingly fearful that the rally in stocks since March may have run out of steam.

Since the VIX tracks prices that investors pay to buy and sell options on the Standard & Poor's 500 index -- often to protect themselves against dips in the market -- the index tends to move up when stocks move down, and vice versa.

While the VIX only measures options market activity, professional equity traders use it as a gauge of uncertainty and fear. As a result, moves higher in the VIX can beget selling in the broader equities market.

In slightly more than a week, the VIX is up roughly 50%, even with Thursday's slide.

The move in the VIX coincided with a spate of recent triple-digit moves in stocks. For October, the Dow has already swung more than 100 points in either direction nine times and appears ready to close the month with another huge move.

Todd Salamone, vice president of Research for Schaeffer's Investment Research, said the move above 30 has heightened importance given the VIX's 160-day moving average, also at 30.

"Earlier in the year, every time there was a VIX pullback, the 160-day held," said Mr. Salamone. "As soon as we broke below in March that's when we started surging. On the way back up, a close above 160 could lead to further advances."

Gee, Soros must be on vacation.

CIT Files Bankruptcy; U.S. Unlikely to Recoup Money (Update3) - Bloomberg.com

CIT Files Bankruptcy; U.S. Unlikely to Recoup Money (Update3)

By Tiffany Kary, Dawn McCarty and Lester Pimentel

Nov. 1 (Bloomberg) -- CIT Group Inc., a 101-year-old commercial lender, filed for bankruptcy to cut $10 billion in debt after the credit crunch dried up its funding and a U.S. bailout and debt exchange offer failed.

CIT listed $71 billion in assets and $64.9 billion in debt in a Chapter 11 filing in U.S. Bankruptcy Court in Manhattan. The U.S. Treasury Department said the government probably won’t recover much, if any, of the $2.3 billion in taxpayer money that went to CIT.

follow link for full story...

^
I wonder how much they paid out in bonuses since they got the bailout money. Weren't they part of the TARP bailout group?

^ To the tune of 2.3 billion...

Originally Posted by MrG

^
I wonder how much they paid out in bonuses since they got the bailout money. Weren't they part of the TARP bailout group?

But they need to pay out those multi million dollar bonuses to get the best people to run the business. Otherwise they would all be going bankrupt with incompetant CEOs running them into debt.