US GDP shrinks 2.9% in first quarter

[SR-91]

Despite your immaturity, I will take your comment seriously. Those trillions were spent on the US defense industry and contractors, flowing through to logistics operators, suppliers, and worker income.

Ok... lets take logic...
please explain me why we spend those Trillions fighting those, who didnt know anything beyond AK47 and RPG.

Are you so uneducated as to think that the money was burned in a bonfire?

Defense minister Rumsfeld himself said that he cannot trace 2.4 trillion dollars. Please educate yourself on that issue before pointing fingers.. and please dnt tell me black projects. find another excuse.

Did you notice that Bush steered the economy back to full employment by 2005, but your messiah hasn't managed to do so. Your clown prince also committed the US to spend "TRILLIONS.
When he took office unemployment was over 11%. Number have decreased ever since.

UN-fking necessary" waste on his CommieCare initiative, which will drag down the US economy for decades, just as all the other entitlement programs have.

You dare call me uneducated.....
1: EDUCATED people know that the TRUE effects of a policy can only be found years later.
2: We are indians, we strongly believe in higher education, dont believe me, Just ask NASA.
3: Most importantly, have you read OBAMACARE bill? or did your friends tell u?

When you go to college, make sure you study some economics so you don't embarrass yourself next time.

And you call me uneducated..

 

[LeveragedBuyout]

Personally, I understand why Bush went to war in Middle East. As costly as it is, it was better aligned with US' long term interest than anything Obama did. The specific execution, of course, is somewhat sloppy, especially comparing to Bush Sr.'s execution in the first Gulf war, but part of that has to do with the changing global political climate post 1991.

Obama is...overhyped to be honest. In all honesty, his title of "first black president in US" is really overshadowing the fact his administrative career prior to his presidency is rather lackluster. I mean, I don't expect him to go through every single level of the administrative position like the Chinese leaders, but I would at least expect a presidential candidate to have governor of a state and/or vice-president on his resume like pretty much every president before him in the past century. (I think the only US president in the past century that doesn't have either vice-president or state governor on his resume is JFK.) But what can you do, the other candidate of democratic party is Hillary Clinton, who has an equally lackluster resume and there is no way Republicans can win a popularity vote after the 2008 financial disaster (Not to mention McCain's resume is ALSO nothing to write home about).

If Ayn Rand had heard of these socialist schemes like Obamacare, she would have committed suicide.

I think Obama is trying to leave behind a legacy. Something that people will remember him for and he is wasting no expense doing it.

Gents, I couldn't have said it better myself. I didn't even get into the nearly $1 trillion wasted by Obama in the American Recovery and Reinvestment Act of 2009, but I no longer believe that Obama fanatics like SR-91 would recognize waste even if it came out of their own pockets (which of course, it did not). Sometimes, after I finish with the self-pity, I leave room to feel sorry for China for lending all that money to us.

Ok... lets take logic...
please explain me why we spend those Trillions fighting those, who didnt know anything beyond AK47 and RPG.

When America is attacked, it will respond. America doesn't just go abroad and destroy--it tries to reconstruct afterward. Sometimes, the locals want to rebuild (Germany, Japan, Korea), and sometimes they prefer to stay undeveloped (Afghanistan, Iraq). The world is complicated. I don't expect you to understand that right now, but when you have some more experience in life, you'll get it.

As far as Obamacare, I did not read it cover-to-cover. I read the portions excerpted as the challenges came up in court. I also observed the abject failure of the exchanges, the gigantic increases in premium rates, and the higher taxes I have to pay for this abomination. If you are still a believer in Obamacare even now, then you are a fanatic, and no facts or reality will change your mind.

 

[tranquilium]

Gents, I couldn't have said it better myself. I didn't even get into the nearly $1 trillion wasted by Obama in the American Recovery and Reinvestment Act of 2009, but I no longer believe that Obama fanatics like SR-91 would recognize waste even if it came out of their own pockets (which of course, it did not). Sometimes, after I finish with the self-pity, I leave room to feel sorry for China for lending all that money to us.

Meh, US bond was decent investment, especially comparing to what else is available in 2009. Vast majority of the US bond is held by Americans anyway. Though, the if the Feds keeps up with QE, I don't how long the situation will last. (The flat rate for US bond is been at 0% for the past few years, but it did pickup a tiny bit this year.)

 

[AgNoStiC MuSliM]

The US economy will have a ceiling of 2% GDP growth as long as a Democrat sits in the White House...

Well that just ain't true, based on historical data at least:

US GDP Growth Rate by Year

 

[LeveragedBuyout]

Meh, US bond was decent investment, especially comparing to what else is available in 2009. Vast majority of the US bond is held by Americans anyway. Though, the if the Feds keeps up with QE, I don't how long the situation will last. (The flat rate for US bond is been at 0% for the past few years, but it did pickup a tiny bit this year.)

China has done fine with its treasury holdings thus far, but as soon as interest rates start to rise in the US, China will suffer large capital losses. China does not want to be in UST, believe me, but it cannot get out as long as its financial system is not liberalized and the RMB floated.

 

[tranquilium]

Well that just ain't true, based on historical data at least:

US GDP Growth Rate by Year

While I agree that US growth certainly isn't capped at 2%, I do like to point out that the chart you linked is for real growth. You need to subtract inflation from it. For example, China's real growth in 2013 is 10.37%, but since China has an inflation rate of 2.57% in 2013, the overall GDP growth is 10.37%-2.57% = 7.8%.

China has done fine with its treasury holdings thus far, but as soon as interest rates start to rise in the US, China will suffer large capital losses. China does not want to be in UST, believe me, but it cannot get out as long as its financial system is not liberalized and the RMB floated.

Why would China suffer large capital losses? US FDI is only a very small portion of the overall FDI in China. The overall FDI is also only a small part of Chinese economy. Also, Chinese stock market has been kept artificially low since 2007, not to mention the core Chinese stock market isn't even available to foreign investors. Out of the US investment in China, vast majority doesn't even have control share to affect business decisions.

US raising interest rate will devastate a lot of developing economies, but socialist nations are by nature a lot more resistant to these kind of events.

 

[LeveragedBuyout]

Well that just ain't true, based on historical data at least:

US GDP Growth Rate by Year

Understood, but I'm not referring to historical growth rates. I'm referring to every year under Obama having his spin doctors put out a narrative of "the summer of recovery," and we have not managed to sustain above 2% growth rates under his royal highness.

By the way, we do not use nominal GDP growth numbers, we use real GDP growth numbers.

 

[AgNoStiC MuSliM]

While I agree that US growth certainly isn't capped at 2%, I do like to point out that the chart you linked is for real growth. You need to subtract inflation from it. For example, China's real growth in 2013 is 10.37%, but since China has an inflation rate of 2.57% in 2013, the overall GDP growth is 10.37%-2.57% = 7.8%.

My point wasn't so much about the number itself as it was about comparing GDP growth rates (real or inflation adjusted) between the Clinton, Bush and Obama. That comparison does not justify comments implying a link between stunted US GDP growth and Democrat Presidents.

 

[LeveragedBuyout]

While I agree that US growth certainly isn't capped at 2%, I do like to point out that the chart you linked is for real growth. You need to subtract inflation from it. For example, China's real growth in 2013 is 10.37%, but since China has an inflation rate of 2.57% in 2013, the overall GDP growth is 10.37%-2.57% = 7.8%.



Why would China suffer large capital losses? US FDI is only a very small portion of the overall FDI in China. The overall FDI is also only a small part of Chinese economy. Also, Chinese stock market has been kept artificially low since 2007, not to mention the core Chinese stock market isn't even available to foreign investors.

Capital losses as in the opposite of capital gains, not capital inflow/capital outflow. When interest rates rise, the price of treasuries falls. Thus, loss of principal (capital losses).

 

[Chinese-Dragon]

While I agree that US growth certainly isn't capped at 2%, I do like to point out that the chart you linked is for real growth. You need to subtract inflation from it. For example, China's real growth in 2013 is 10.37%, but since China has an inflation rate of 2.57% in 2013, the overall GDP growth is 10.37%-2.57% = 7.8%.

I think you meant nominal growth rate buddy.

The real growth rate is the nominal growth rate adjusted for inflation.

The real growth rate is what is usually referenced in the media.

 

[tranquilium]

My point wasn't so much about the number itself as it was about comparing GDP growth rates (real or inflation adjusted) between the Clinton, Bush and Obama. That comparison does not justify comments implying a link between stunted US GDP growth and Democrat Presidents.

Yeah, that's true.

I think you meant nominal growth rate buddy.

The real growth rate is the nominal growth rate adjusted for inflation.

The real growth rate is what is usually referenced in the media.

Oops, my mistake.

Capital losses as in the opposite of capital gains, not capital inflow/capital outflow. When interest rates rise, the price of treasuries falls. Thus, loss of principal (capital losses).

Erm, can you explain the "When interest rates rise, the price of treasuries falls" part?

 

[SR-91]

Gents, I couldn't have said it better myself. I didn't even get into the nearly $1 trillion wasted by Obama in the American Recovery and Reinvestment Act of 2009, but I no longer believe that Obama fanatics like SR-91 would recognize waste even if it came out of their own pockets (which of course, it did not). Sometimes, after I finish with the self-pity, I leave room to feel sorry for China for lending all that money to us.

Hair in the back of my head stood up, when Rumsfeld blubbered "we are MISSING 2.4 trillion dollars, MISSING. What part of missing you didnt understand?

Only republicans ...

 

[Edison Chen]

Well that just ain't true, based on historical data at least:

US GDP Growth Rate by Year

Dec 31, 1944 118.27%

 

[AgNoStiC MuSliM]

Dec 31, 1944 118.27%

On a lighter note, perhaps we finally understand what Cheney and Bush's "master plan of going to war in Iraq" was all about - mimic the enormous growth rates of a war economy circa WWII!

 

[LeveragedBuyout]

Yeah, that's true.



Oops, my mistake.



Erm, can you explain the "When interest rates rise, the price of treasuries falls" part?

The simple answer: when interest rates rise, there are new bonds in the market paying that higher interest rate (bonds are issued all the time). So the new bonds are more desirable, and the existing bonds less desirable. The existing bonds must therefore trade at a discount to the new bonds to attract buyers.

Slightly less simple answer: it's a mathematical function, as bond prices depend on the prevailing discount rate (the interest rate). Price = (C/(1+i)) + (C/(1+i)^2) + (C/(1+i)^3) + ....+ (C/(1+i)^n) + (M/(1+i)^n)

C = coupon payment
n = number of payments
i = interest rate or required yield
M = value at maturity (or par value)

When C, n, and M are held constant and i increases, the price falls.