Replies to post #110670 on Biotech Values

[BTH]

Don't fight the Fed.

[jbog]

Blade,

How can any of these guys make a prediction when the stimulus and QE programs roll out on a weekly basis?

No one can predict anything in this environment without knowing the governments next move.

For crying out loud, last Friday the presidents deficit panel comes in with numerous warnings and solutions and then Monday morning the government responds with another trillion dollar package.

It's going to be an outside force that ends this madness.

[zipjet]

IMO Rosenberg was close enough (IMO) on his unemployment call given the nature of the index. The bigger problem with the index is that it depends heavily on who is looking for work - thus discouraged workers are not counted as unemployed in the rate. There are lots of those who have dropped out. The smaller error is in the sampling and that can (if memory serves me) add or subtract another 0.3% points to the rate. So 9.8% could be as high as 10.1% on that factor alone.

Here are a few other econ comments that may interest some:

- Growth in US GDP since 1990* has largely come from growth in debt;
- From 1990 to 2008 government debt as a percent of GDP declined;
- Consumption as a percent of GDP rose from 58% in 1952 to 73% in 2008 as savings went from 8% to 2%;
- After an average recession (mild and severe), 10 quarters from the prior GDP peak GDP has risen 5.1%;
- After the Great Recession, 10 quarters from the prior peak, GDP is down 1.3%;
- That gap of 6.4% of US GDP is ~$1T shortfall rate;
- Thus the GDP gap is costing the US $1T per year and counting;
- Long-term Unemployment rate as a percent of total unemployment has ranged from 20% to 25% for the last 3 decades;
- Fed projects unemployment rate to remain stubbornly high for an extended period;
- Since the Great Recession LTUR/TU peaked at 45%;
- Capacity utilization is still very low at 74.8% after spiking to an all-time low of 68.3%;
- RE property prices are still declining;
- YOY Core CPI continues to trend down and at 0.8% is the lowest in decades supporting the fear that disinflation will become deflation;
- Housing affordability is at a record high of 179.1;
- At recent absorption rates it will take 6 years to work off the housing backlog;
- Mortgage delinquencies remain near peak levels;
- Ratio of household liabilities to Disposable income and the Household Financial Obligations Ratio are each dropping but much of the drop is accounted for by debts eliminated in bankruptcy;


ij


The economic data came from a recent presentation by the Chief Economist of Commerce Bank, Scott Colbert, CFA.



* Yep - that takes in the whole Clinton period where debt was promoted in the private sector and much of the Bush terms, and the credit crisis term (Bush/Obama) where the debt was taken on by government.