National Debt at Record $9 Trillion

[sandman]

for all you scared investors out there, read this article. they mention two very good large-cap growth stocks.? ?

Personally I dont' take my advise from analysts who want you to buy and sell stocks, regardless if you lose, because they make money no matter what. It's as dumb as listening to a realtor.

Ironically your last article contradicts what you are claiming: a strong economy. It points out that great buys can be had during a sluggish economy. Which I already said (buy to the bottom) and that the economy is not "healthy" as you said earlier.

Which one is it then? Healthy economy or sluggish one where Blue Chip stocks can be had on the cheap?

it's no secret the economy is slowing. it's being hit with some major turbulance. but overall it's healthy enough to withstand it. everyone was convinced consumer spending would be down in Q3. they were wrong. 

as you sort of stated, the stock market is not the sole measuring stick of the economy.

and also as you stated, just because a senior writer makes a statement, doesn't make it true.

[JMack]

 ? ? I do have to agree with Sandman re:Consumer decisions especially in a over priced housing market. ?I really have to wonder why people buy $800,000 houses and while they're at it borrow a little more to buy that Escalade. ?A few years go by and then they realize that they can't afford it? ?Well I'm very sorry for you dumb ass. ?You have to keep up with the neighbors? ?Don't trust a scum bag house salesperson who is also going to lend you the money either. ?Regardless of your political belief there are more people out there looking to screw anyone over so that their bank account is full. ?It's a sad but true fact of life. ?I wish there were more honest people out there but no there isn't once greed takes hold.
 ? ? Yes I do believe that your porfolio should include foreign investment, but it is for more of a balancing act. ?I wonder if it really matters because of global corporations. ?Many hold a European name only to be owned by Citi-Corp, GE or whoever. ?I do believe in Gold and Platinum for that matter and yes I own stock in Tyson because chicken is good. ?I would love to own a whole load of platinum chickens. ?Honestly does the top 2% of money earners care about anyone or about politics? NO. ?As long as the bulls and bears can retire at night on those stuffed matresses and they're the ones in control of the countries finances. ?IE:Randolph and Mortimer Duke sadly these guys do exist. ?I hope no one here is eating Nova Scotia lox through his fake beard this Christmas season while riding the bus with his drink on.
 ? ? If you look at both sides, you can find valid arguments for both sides. ?If you have investments you would do better riding it out because I've been through it before in the big 80's. ?It's cyclical and your portfolio manager if he wants to earn a commision is going to make sure you don't lose your savings, if they are honest and have half a brain that is.

 ? ?And on one further note PUNK stop yelling "Republican" because I'll hit a lady and then if I find you to be a man I'll bring sexy back on you, being a republican and all I may just start tapping away all up on you.
 ?Lighten up Francis's! ?All of you will be sent to your rooms w/o any political programming Damn it.

[JMack]

All I would like to have is enough for my children to go to college and to be retired in 5 years ok 10 years.  I'm not into greed or keeping up with the Jones's.  Just enough wine for the men, hay for the horses and mud for my turtle is all I ask for.

[fuckin crazy]

everyone was convinced consumer spending would be down in Q3. they were wrong.

The US consumer relying on debt is one of the primary reasons for the weak dollar. In a sense, I agree with you; a weak dollar will make the coming recession less painful and should help balance some of the trade deficit.

[sandman]

i just hate when people talk about debt so negatively. debt is good. but you have to be able to control it. the monthly bills that don't bother me even a little bit are my mortgage payments and my home equity loans. 

i don't feel bad for people that borrowed more than they are able to pay back. partly because along with a high mortgage payment, many have high credit card balances, and expensive cars.

and i don't feel bad for the lending institutions that entered risky markets to make more money. plenty stayed away from the subprime market and they are sitting real pretty right now.

[SLCPUNK]

you also conveniently left out consumer spending and unemployment. 

ok, let's talk DEBT. what do you mean "in the trillions NOW"? you make it seem like this is something that just happened over the last few years. i guess you don't realize the history of our national debt.

and since you don't believe the economy has been in good shape in recent years, i use the late 90's. the national debt was around $4-5 trillion back then. didn't prevent the economy from growing though, did it?

I ?conveniently? left it out huh? What were we talking about again anyway? I know you think that countries build economic powerhouses from weak currencies, that soaring debt is actually a good thing, and that a deficit even better yet! Are you also implying that consumer spending is up?

Maybe you should read your history books. Clinton actually created a surplus, so he was able to pay the debt down.  During Clinton?s term the Dow moved from 3300 to over 10,000, and had the largest Surplus Economy in history. And are you implying that the economy is good again?  In the start of the thread you said it was great, then you said everybody knows it?s slowing down, now you are implying that it?s good again. Which one is it?

I know you are real gung ho on the ?weak dollar is good for the trade deficit.? But again, did it occur to you that we have an atrocious trade deficit to begin with? That does not strike you bad? Bush took the largest growth economy (Clinton) and turned it into a $5T Trade Deficit, $5T Spending Deficit (in reality a type of tax) and the country is heading into recession if the Fed can't dump enough money into the economy (Over $300 billion so far), which doesn?t seem to be working well. Besides, you ignore all the bad things associated with having such a weak currency. I guess I could say ?conveniently? left out. I?d be concerned about people moving to the Euro as the trading standard for starters.

Yes the economy is slowing, yes we are pointing towards a recession, and I?d say we are already seeing recession characteristics in specific sectors already. Is it the end of the world? No. But don?t sit there and try to tell me everything is rosy when the data says the opposite.

So go read your articles written by wall street hacks, with vested interests in painting a picture of a healthy economy. I?ll stick to reports, and statistical analysis that provide a more realistic profile.

So, just for the record, you do not think we are the cusp of a recession? You think the economy is doing well (Final answer?)

i just hate when people talk about debt so negatively. debt is good.

Debt is good huh?

[SLCPUNK]

I hope no one here is eating Nova Scotia lox through his fake beard this Christmas season while riding the bus with his drink on.

That was Solius Symbiosus after the TFHL Xmas party. He flashed Lisa that same night.

All I would like to have is enough for my children to go to college and to be retired in 5 years ok 10 years.  I'm not into greed or keeping up with the Jones's.  Just enough wine for the men, hay for the horses and mud for my turtle is all I ask for.

My goal is to simply not work.

And on one further note PUNK stop yelling "Republican" because I'll hit a lady and then if I find you to be a man I'll bring sexy back on you, being a republican and all I may just start tapping away all up on you.

You wanna put jelly on a lady?

[The Chad Cometh]

i just hate when people talk about debt so negatively. debt is good.

Debt is good huh?

Exactly how is debt a good thing?

[freedom78]

i just hate when people talk about debt so negatively. debt is good.

Debt is good huh?

Exactly how is debt a good thing?

I took it as this:

Debt can be fine, if it's responsible debt.  A house payment or car payment, for example...things people can't usually afford in one payment, but which can be deemed as necessities (shelter/transportation). 

Of course it's still backwards.  If I buy a car worth $20K, then my payments over five years add up to more than $30K.  If some rich dude wants to buy that same $20K car (probably for his spoiled 16 year old), he only pays $20K.  Nice system.

[AxlsMainMan]

it's no secret the economy is slowing. it's being hit with some major turbulance. but overall it's healthy enough to withstand it.

If the US economy is so healthy, then why would Canada refuse to amalgamate currencies with the US?

..Because the US economy is one of the poorest performing economies in the world right now, whereas Canada has one of the strongest

[fuckin crazy]

the US economy reminds me of an idiom in the 60s- 70s "burn baby burn".

[The Chad Cometh]

it's no secret the economy is slowing. it's being hit with some major turbulance. but overall it's healthy enough to withstand it.

If the US economy is so healthy, then why would Canada refuse to amalgamate currencies with the US?

..Because the US economy is one of the poorest performing economies in the world right now, whereas Canada has one of the strongest

The Australian economy is also fucking strong ... so we're gonna vote out our leader and replace him with an economic rookie ... Australians are smart huh? **Sigh**

[sandman]

the point of this thread was to scare people into thinking the $9T debt is something to worry about. it is not.

of course a recession is possible, but it's not a guarantee. there are some very positive signs right now which i am hoping can balance things out and help the economy's growth to continue. and if one occurs, it will be short lived. much like the recession in 2001.

consumer spending accounts for 70% of the economy. and despite the issues over the last year, consumer spending was up 3% in Q3. the predictions of "experts" are largely based on the expectations that consumer spending will decline due to the weakness of the housing market.

i think the low unemployment rate and increasing payrolls will be enough to keep consumer spending on the rise.

[GeorgeSteele]

the point of this thread was to scare people into thinking the $9T debt is something to worry about. it is not.
 

What amount of debt would be something to worry about?  Are you suggesting the debt number is irrelevant?



 

[sandman]

the point of this thread was to scare people into thinking the $9T debt is something to worry about. it is not.
 

What amount of debt would be something to worry about?? Are you suggesting the debt number is irrelevant?



 

that's a tough question to answer. and you need to consider what the money is paying for, and the benefits it has provided our society.

[SLCPUNK]

Sheeple ^

[sandman]

Markets cheered by economic data

December 5, 2007
Wall Street rallied today after new data showed the U.S. economy is in good shape and that another interest rate cut is still a possibility. The Dow Jones industrial average rose more than 170 points.

Stocks turned around following two sessions of losses after a report showed hiring in the U.S. private sector expanded at a faster pace in November. ADP Employer Services said 189,000 jobs were added during the month ? an increase that bodes well for consumer spending.

??The best news for the market is good news on the economy,?? said Jack Ablin, chief investment officer at Harris Private Bank. ??There might be a general malaise among homeowners these days, but as long as more people are getting paychecks then the economy can withstand the stress.??

This week?s economic reports are being closely watched by the Federal Reserve, which meets next Tuesday to discuss interest rates. Investors also weighed reports on manufacturing and factory orders.

It is widely expected central bankers will lower rates to help pump up the economy and head off a recession. However, some investors are betting the Fed will go beyond the generally anticipated quarter percentage point cut, and lower rates by a half point.

Oil
OPEC decided Wednesday to keep output ceilings steady for now, a move that briefly propelled crude prices above $90 a barrel. Meanwhile, the government reported that U.S. oil supplies fell steeply last week while gasoline stockpiles rose, both by greater margins than analysts had expected.

Light, sweet crude rose 19 cents to $88.51 a barrel on the New York Mercantile Exchange at midday.

[SLCPUNK]

LOL, I read that earlier today. You left out this part:

"Still, there is enough uncertainty in the economy -- in particular the financial sector that is still struggling from months of credit problems -- that the market expects the Fed to lower rates. Some investors are betting the Fed will go beyond the generally anticipated quarter percentage point cut, and lower rates by a half point."

Still making rate cuts to prop it up. The last rate cut kept the street rallying for what? Five days? Then.....

[sandman]

Forecast says economy will avoid recession

LOS ANGELES - The nation's housing doldrums will drag on at least through 2009, dampening U.S. economic growth and job creation, but the slowdown won't push the economy into a recession, according to a new economic report.

Despite plunging housing values, rising oil prices and credit problems that continue to plague Wall Street, the nation's job market is unlikely to suffer the kind of steep losses that would tip the economy into recession, according to the quarterly Anderson Forecast by the University of California, Los Angeles.

"We still think an official recession is not in the immediate future," concluded Edward Leamer, director and co-author of the forecast set for official release Thursday.

Some economists and financial pundits have warned the nation will sink into recession, with a wave of reset adjustable-rate mortgages tearing through the economy next year.

Leamer, however, insisted the housing woes alone won't hobble the economy enough to cause two consecutive quarters of negative economic growth in the nation's gross domestic product _ the standard used to define a recession.

In addition, the U.S. unemployment rate would have to soar from the current 4.6 percent to nearly 6 percent by the end of next year, the equivalent of a loss of at least 2 million jobs, Leamer said.

That would require major job losses from a sector other than construction, something the UCLA economist doesn't see happening.

Heavy job losses in manufacturing, which has shed about 3 million jobs since 2001, could have such an impact, but Leamer believes that is implausible.

Still, he projects the economy will remain sluggish for another couple of quarters before starting to rebound in the second half of 2008.

The forecast estimated the housing slump cost the U.S. economy a percentage point of growth this year, or one-third of the typical 3 percent annual rate of increase.

Leamer predicted U.S. housing prices will continue to drop, and levels of new construction will remain depressed, through 2009.

Even so, the housing drag on the national economy will "substantially abate" by mid-2008, with housing starts bottoming out by next summer to about 900,000 units, Leamer said.

"That means that the builders are going to continue to suffer," he noted. "Starting middle of next year is when things stop getting worse ... that doesn't mean the housing market is healthy."

Many economists are worried that rising oil prices combined with housing and credit problems will shake consumer confidence, a key driver of growth.

The UCLA forecast said consumer spending will likely lag, particularly on large items such as cars.

"The auto sector is going to have a weak year," Leamer said.

Meanwhile, the decline in the value of the dollar should help fuel U.S. exports for the next several years, and the decline in consumer spending will mostly affect other countries as U.S. consumers purchase fewer foreign-made products, Leamer said.

[SLCPUNK]

Man you are desperate to make a point huh?

"Forecasts" said that the housing market would level out then bounce back up. Even greenspan said the housing market was "frothy" but not in a bubble. 

I base my opinions on raw data available right now.

The WSJ:

Surge in Auto-Loan Delinquencies Is Latest Trouble for the Economy - WSJ.com

By JEFFREY MCCRACKEN and GREGORY ZUCKERMAN
December 6, 2007; Page A1

First came housing loans and the subprime-mortgage crisis.

Now, signs of stress are creeping into another key consumer area: auto loans.

Delinquencies in the auto-loan market are ticking up to their highest level in several years. Lenders are tightening terms in some cases, and interest rates have risen from the rock-bottom levels of a few years ago. About $575 billion in loans for new and used cars are made annually, according to the National Automotive Finance Association.

About 4.5% of auto loans made in 2006 to top-rated borrowers were at least 30 days delinquent as of the end of September, up from 2.9% the previous month, according to a Lehman Brothers survey of companies servicing these loans. That is the biggest one-month jump in at least eight years. Lehman says 12% of subprime borrowers, who have poorer credit records, were delinquent on their 2006 auto loans as of September. That is the highest level since 2002 and up from 11.1% the previous month.

"The numbers will get worse for auto loans," says Dan Castro of GSC Group, a New York firm that runs debt-related investment funds. "We're starting to see signs of rising losses, and delinquencies are creeping up."

Few in the auto-loan industry see the strain as the kind of disaster-in-the-making that home mortgages have become. Still, there is a connection between the two categories, since the squeeze on some home borrowers may make it harder to carry car loans. The trouble signs in auto loans suggest that the credit woes could be spreading to the broader economy, a development that has been worrying investors and policy makers in Washington.

Other corners of the credit market are also sending troublesome signals. Shares of First Marblehead Corp., which packages student loans into securities, dropped to a two-year low yesterday after an analyst cut his rating on the stock and Moody's Investors Service threatened to downgrade some of its securities, also because of delinquency concerns.

Car loans differ from home loans in one crucial way. During 2004-06, many home loans were made to speculators on the assumption that the underlying asset -- the home -- was sure to keep rising in value. Many people, inspired by fervor in the market, took out home loans that in retrospect they had little hope of paying back.

By contrast, everyone understands that the car behind a car loan is an asset destined to lose value. The typical delinquent borrower in a car loan isn't a speculator but someone who became unable to make what previously seemed like a manageable payment. That is why car delinquencies are closely linked to the health of the economy.

"Auto-loan defaults tend to be event-driven, like a job loss or an unexpected health-care bill or a divorce," says Dan Berce, chief executive of AmeriCredit Corp., one of the country's largest subprime auto lenders. "We watch quite closely economic indicators like unemployment rate, weekly job claims or hours worked."

In the second quarter, borrowers were at least 30 days behind on 2.77% of all auto loans made by nonbank lenders, the main players in the market, according to the American Bankers Association. That was the highest delinquency rate since 1991.

Many auto loans undergo the same Wall Street financial engineering as the mortgage loans that stand at the center of the credit crisis, making this a potential issue for investors. Auto loans often are bundled together into securities, sliced and diced into pieces with varying levels of risk and return, and sold to investors around the world.

In 2006, $89 billion of auto loans were packaged into asset-backed securities and sold to investors, according to Standard & Poor's, making it the biggest asset class for such securities next to mortgages and credit cards. That tally doesn't include certain other types of securities backed by car loans. The market is now slowing. Deutsche Bank estimates such bundling was down to $69 billion during the first 11 months of this year, a 19% drop from the same period last year.

Borrower problems also could deal a blow to the already-struggling auto industry. Auto sales held up during the 2001 recession in part because lenders were able to offer easy borrowing terms. If lenders tighten terms in response to the delinquencies, it would make it harder for some people to buy cars.

U.S. auto sales are down about 2.5% this year, and the auto industry is bracing for sales to decline further in 2008. Interest rates on auto loans have increased to nearly 8% from about 6.5% in late 2004, according to J.D. Power & Associates.

The auto-loan-delinquency problem is somewhat less severe for two lenders associated with the top two U.S. car makers -- Ford Motor Co.'s Ford Credit, and GMAC Financial Services, which is 49%-owned by General Motors Corp. That is because Ford Credit and GMAC don't handle many subprime loans.

GMAC Treasurer David Walker said auto-loan delinquencies in the third quarter were the highest in at least three years, partly because of economic factors, but he said credit losses are still well within historical levels. Separately, GMAC is struggling with the fallout of the subprime-mortgage crisis because one of its units was a big home lender.

AmeriCredit, of Fort Worth, Texas, is also experiencing stress. The company makes about 500,000 new- and used-auto loans a year, valued at about $9 billion, some of which get sold to investors.

In the quarter ending Sept. 30, AmeriCredit reported net income of $61.8 million, down from $74.2 million for the period a year ago. It also lowered fiscal-2008 profit projections, blaming poorer-performing 2006 auto loans. AmeriCredit shares traded at $10.32 in 4 p.m. New York Stock Exchange composite trading yesterday, down 18 cents from the day before and 59% lower for the year to date.

There are reasons to believe the problems in auto loans won't reach crisis levels. Auto lenders and credit counselors say many consumers see their cars as a necessity and would sooner hand back the keys to a home and look for a rental than default on a car loan.

Auto lenders and dealers note that the monthly payment on a car is smaller than a mortgage payment. Most auto loans carry fixed interest rates, unlike subprime mortgages, which often reset to a higher rate after an introductory "teaser" period of two or three years.

Still, auto loans, like home loans, saw credit standards loosen in 2005 and 2006. CarMax Inc., of Richmond, Va., the largest used-car retailer in the country, said at the end of 2005 it lowered lending standards. For example, it allowed consumers to put down less money to buy more expensive vehicles. Car Max made about 140,000 car loans last year.

"We had been too strict and wanted to make more loans and maximize profitability. We expected our delinquencies and losses would go up, but they are up higher than we thought," said Katharine Kenny, head of investor relations at CarMax.

Some subprime auto lenders, such as Capital One Financial Corp., say they are seeing higher risks in parts of the country where home prices are falling the hardest, such as California and Florida. Lenders say rising delinquencies are also tied to higher fuel prices and slowing job growth.

Mr. Berce said rising delinquency rates prompted AmeriCredit to tighten its lending standards early this year and it will reassess the matter next month. It is now demanding that borrowers put down more cash against the value of the cars they are buying, especially among consumers with lower credit scores. Mr. Berce said this tightening of standards could reduce lending volume by about 10%.
--John D. Stoll contributed to this article.

Write to Jeffrey McCracken at jeff.mccracken@wsj.com and Gregory Zuckerman at