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  #1  
Old 07-02-2017,
Antonia05R Antonia05R is offline
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Default Signs of impending doom in the economy?

I got this email yesterday from briefing.com...

Word From the CEO

The Great Untold Story: Katrina and Rita have dominated the headlines. There are concerns that the direct impact may slam economic growth. High energy prices and fears that a housing bubble may burst have even led to talk that the US economy may be on the verge of a consumer led recession.

That isn't going to happen.

There is as yet no evidence whatsoever of a consumer pullback. Declines in sentiment readings simply reflect the emotional reaction to the hurricanes. Major retailers have said that store sales are on track.

It may take a few weeks of economic data to realize that economic growth in the fourth-quarter will be above long-term trends. But it will happen.
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Old 07-02-2017,
Antonegop Antonegop is offline
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Combine this with inflation and these probably here to stay gas prices, and people simply are not going to have the money to be able to support our economy with their money. I am currently building a more cash-oriented portfolio and awaiting the impending market crash, as well as increasing my stake in international markets.
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Old 07-02-2017,
AraSonnier AraSonnier is offline
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To me there is little doubt that our economy is heading toward a recession. It seems like up till now, the economy has been laughing in the face of inflation, high energy prices and the amount of money that people have leveraged. The fact that the market has done so well the past few months is a complete mystery to me.

Not only are people borrowing more for their homes with short term ARM loans, but they continue to rack up massive amounts of debt on their credit cards. When the initial low rate on the ARM is up and they are faced with a drastically higher mortgage payment, the credit card debt will only continue to increase. While in the short term they will continue to charge items they need, at some point they will no longer be able to make purchases.
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Old 07-04-2017,
AracelisSh AracelisSh is offline
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Amidst all of this, however, is a huge untold story. Third quarter earnings growth is spectacular.

Third quarter operating earnings for the S&P 500 in aggregate are expected to rise 18% over the same period last year. This is up from the 12% growth in the first half of this year.

Energy company profits are up sharply, but even excluding that sector, profits are forecast to rise 12%.

Ultimately, stock values are a function of profits. Exchange rates, gold, government deficits, oil prices and sentiment readings are tangential issues that matter only in how they eventually impact profits.

So while the market obsesses over tangential indicators and how much of a hit the economy will take from the hurricanes, the key fundamental factor is flat-out bullish.

At some point, the strong profit growth will boost the market. That may very well be once the market recognizes that the economy will be just fine.
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Old 07-04-2017,
AquaMact AquaMact is offline
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The impact will be different for each demographic group. Of course the hardest hit will be the low income population while the upper middle class/upper class will hardly feel a dent.

deepinwonder. Third quarter might be good but pretty soon companies are going to start to feel the pinch of higher energy costs. I don't dispute that some industries will continue to outperform (energy) in the coming quarters but don't be surprised if some companies disappoint Q1 & Q2 next year.
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  #6  
Old 07-05-2017,
admin admin is offline
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The problem with those that say that the recession isn't going to happen is that they're basing their opinion on economic measures from before now. Yes - it hasn't happened yet but that doesn't mean it won't!

The problem with those that say it will happen is that they're basing this prediction on economic potentials and conditions that have never come together before - or not in the last 80years anyway.

To me, the hurricanes are being totally over-reported in terms of their negative economic/emotioanal affects. They're just as likely to have a positive affect on the economy. The huge federal help has to raise inflation though.

The fact is though that the amount of leverage/debt that people are into amazes me. I don't understand it. And this is the so-called middle-class we're talking about here - not the working class. I think in the end some pigs will get slaughtered but that the economy as a whole will roll on.

Much like the point about reporters and bandwagons, I think analysts often research and report what they want to see happen rather than what they might think would happen if they were completely impartial.
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