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US economy returned to growth last quarter, expanding 2.6%

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Re: US economy returned to growth last quarter, expanding 2.6%

#261

Post by [deleted] »

rendang wrote: post #24
importantbrian wrote: post #6

This is the weirdest "recession" I can remember. Business leaders are constantly talking about how challenging the economic environment is and the need for layoffs etc. Meanwhile most of the underlying indicators are actually positive. Growth is strong, employment is strong. Anecdotally we're still having trouble finding good candidates. It's almost like there is a class of business leaders who are just trying to wis…

Another piece of the puzzle is the big drop in labor productivity lately - https://fred.stlouisfed.org/series/OPHNFB . Could the data you mention be explained by workers previously being in jobs where they were unproductive, being laid off but then quickly reabsorbed by the hot labor market into more efficient lines of work?

[deleted]

Re: US economy returned to growth last quarter, expanding 2.6%

#262

Post by nly »

disgruntledphd2 wrote: post #181
trentgreene wrote: post #125

Earlier quoted context omitted.

I've worked in small start ups before, but all boot strapped out of pocket / revenue. Wouldn't having to borrow money constantly be a red flag that the business is bad / not profitable?

Depends. If your income comes in 90 days post invoice, but you pay monthly then borrowing some money to smooth over cash flow makes loads of sense. If you need to buy loads of stuff to sell, it also makes sense. Software businesses are pretty weird in the lack of capital costs.

An alternative to borrowing to achieve that smooth cash flow is treasury savings.

Re: US economy returned to growth last quarter, expanding 2.6%

#263

Post by com2kid »

TexanFeller wrote: post #256
dfxm12 wrote: post #226

Earlier quoted context omitted.

Look at their profits. This is a symptom of greed more than inflation. Recent research illustrates these inflationary-profit trends, in particular busting the myth of a wage-price spiral driven by increased worker incomes. Over 53% of price increases in the last two years have been driven by profit margin gains https://www.forbes.com/sites/errolschweizer/2022/05/10/how-w...

Ask yourself why all of these companies were not greedy in previous years, and how it happened that they all became greedy at approximately the same time. The answer is that this line about greed is political propaganda you’ve been fed. The companies involved were merely responding to market forces as they always do, /for example: 1) Near zero interest rates during the pandemic - technically set by the Fed, but under…

> Ask yourself why all of these companies were not greedy in previous years,

In the case of Safeway/Albertsons, they jacked food prices up to make their finances look better for a merger.

Flip side of this would be a subscription company dropping prices (or offering lots of promos) to gain lots of subs before a merger.

Re: US economy returned to growth last quarter, expanding 2.6%

#264

Post by nathanaldensr »

UncleOxidant wrote: post #102
subsubzero wrote: post #60

Earlier quoted context omitted.

It is weird, they say history does not repeat but it rhymes. What is troubling about this good news about GDP growth is the fed's course of raising interest rates will continue on and interest rates will keep getting higher and higher. This will lead to a housing market that will grind to a halt and expect that whole sector will hemorrhage jobs. In addition growth companies will be hit hard by rates being high as we…

Mortgage rates at 7% is pretty much the average mortgage rate going back 70 years or so. We're basically at the average mortgage rate now. The Fed screwed up by keeping rates too low for too long which juiced home prices such that a huge chunk of people who would like to be able to buy a home are priced out of the market. The problem, though, is that home building needs to continue in order to improve the housing sup…

Sorry, but there is no "the" government. Zoning is a city and state issue with regards to state-incorporated land.

Re: US economy returned to growth last quarter, expanding 2.6%

#265

Post by inquirerGeneral »

idiotsecant wrote: post #213
vikingerik wrote: post #199

Earlier quoted context omitted.

That's exactly what I'm talking about. Don't look at year-over-year numbers, you're falling for the illusion. A rent jump of 20% for 2022 is because rents were artificially suppressed in 2020 and 2021. The right comparison is to look at 2022 compared to 2019 and see if it looks out of line for a three-year period. A few things are, but most aren't. Also, citing one grocery chain is a cherry-picked outlier. Cite them…

This line of thought doesn't stand up to scrutiny when you look at real data. According to the USDA ERS food price outlook reports @ https://www.ers.usda.gov/data-products/food-price-outlook/ the 20 year average percent change year on year is something like 2.0% - 2.5%. The change from sept. 2021 to sept 2022 has been 11.2%. The forecasted change in 2022 is approximately 10%. The foretasted change in 2023 is approxim…

Don't worry, @vikingerik will continue to double down.

Re: US economy returned to growth last quarter, expanding 2.6%

#266

Post by trentgreene »

Kye wrote: post #239
trentgreene wrote: post #125

Earlier quoted context omitted.

I've worked in small start ups before, but all boot strapped out of pocket / revenue. Wouldn't having to borrow money constantly be a red flag that the business is bad / not profitable?

Being able to is actually a green flag. Banks wouldn't keep lending it if the companies didn't pay it back. This isn't VC we're talking about here.

Interesting, I can see this as lending implies some due diligence into a companies financials. At the same time, at the personal level, I know I can get lines of credit that would be very tough for me to pay back. Is corporate borrowing much more stringent?

Re: US economy returned to growth last quarter, expanding 2.6%

#267

Post by D13Fd »

jvanderbot wrote: post #5
alexb_ wrote: post #2

>Housing investment, though, plunged at a 26% annual pace, hammered by surging mortgage rates as the Federal Reserve aggressively raises borrowing costs to combat chronic inflation. It was the sixth straight quarterly drop in residential investment. Thank christ. Please bring on a housing crash ASAP.

We took a hard look at the economy before buying our house. Ultimately, we bought when interest rates were high, but prices had not yet come down. There's no crystal ball, but it sure looks like our investment will go down in value in the next few years, perhaps precipitously. I think of it this way: We bought the house we want for the price we can afford, and will happily enjoy it for two decades without price infla…

That's a good outlook.

If it's any consolation, we invested in the market in a big way for the first time in October 2021. We just got the "Congratulations on your first year of investing!" e-mail from the service with a link to our account, which happily displays a big red 25% loss on our solidly six-figure investment.

(I do think the stock market losses may be driving a lot of the recession talk. Those losses have happened, for sure)

Re: US economy returned to growth last quarter, expanding 2.6%

#268

Post by dariusj18 »

floxy wrote: post #229
vikingerik wrote: post #199

Earlier quoted context omitted.

That's exactly what I'm talking about. Don't look at year-over-year numbers, you're falling for the illusion. A rent jump of 20% for 2022 is because rents were artificially suppressed in 2020 and 2021. The right comparison is to look at 2022 compared to 2019 and see if it looks out of line for a three-year period. A few things are, but most aren't. Also, citing one grocery chain is a cherry-picked outlier. Cite them…

Prices of used cars: https://www.cargurus.com/Cars/price-trends/ ...you can select the start date for the chart as early as August of 2010. Price increases starting in late 2020 don't look illusory to me.

This is pretty obvious knock on effect of the pandemic too. Inflation isn't making it so that every new car is selling at or above MSRP currently.

Re: US economy returned to growth last quarter, expanding 2.6%

#269

Post by [deleted] »

trentgreene wrote: post #266
Kye wrote: post #239

Earlier quoted context omitted.

Being able to is actually a green flag. Banks wouldn't keep lending it if the companies didn't pay it back. This isn't VC we're talking about here.

Interesting, I can see this as lending implies some due diligence into a companies financials. At the same time, at the personal level, I know I can get lines of credit that would be very tough for me to pay back. Is corporate borrowing much more stringent?

[deleted]

Re: US economy returned to growth last quarter, expanding 2.6%

#270

Post by seanmcdirmid »

jvanderbot wrote: post #217
seanmcdirmid wrote: post #182

Earlier quoted context omitted.

> As a bonus, just remember that the US gov always does everything it can to keep housing prices stable or up What country doesn't do this? China surely does that even more aggressively than the USA; Australia, yep; so...Japan? That's the only country I can think of that doesn't mind some long term lowering of housing prices.

There are 195 countries in the world. A dart thrown at a map would probably not hit a spot that is likely to prop up the general home-owning public.

Japan is the only notable exception I can think of.
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