Economic Roundup

[thechenman]

The U.S. economy grew in the Q3 09. That's a fact. the first positive read since Q2 08 and the largest increase in two years. Take out the spending on motor vehicles (about 1.7%) and the economy still grew.

Current-dollar personal income increased 0.6% in Q2 09. It decreased 0.5% in Q3 09. I don't see that as significant. As long as the economy grows the money will come.

Private domestic investment rose 11.5%

Fixed investment advanced 2.3%

Residential investment increased 23.4% The largest advance since 1986

Domestic investments contributed 1.22% towards total GDP

I'm not calling that a success. I'm calling that growth.

In keeping with the threads original

question. My neck of the woods is looking better, little by little.

Sources: Reuters, BEA, MarketWatch.com, Briefing.com, Wall Street Journal

Tugboat...you are right, the economy did grow in Q3'09...but how much of that growth was subsidized growth by the government (read: taxpayer). How much of that growth was paid for by Treasury sales (read: governement borrowing) to China and other foreign countries. Growth is not just growth, and money does not just flow in becasue we see GDP growth. It isnt' that simple, and it is not black and white. There is a net effect to this growth and it is a negative sum gain.

Taxpayers funded each car sold in the Cash for Clunkers program to the tune of $22K to $24K. Yes, car dealers accepted the payments for those cars, but that cash is borrowed cash. Money borrowed from you that the dealer deposited (read: invested) in their bank accounts. They took that money and paid it out to thier employees who then purchased goods with borrowed money and depostied borrowed money into their brokerage accounts. Yes...dollar investment figures are up, but those savings are from taxpayer dollars. Money that is borrowed by Uncle Same and must be repaid in time.

Residential housing grew becasue of the 1st homebuyer subisdy, and CA saw even greater sales becasue they had a $10K state program on top of the federal program. These are subsidies. Without them, residential real estate would nto have done as well as it did. Also keep in mind that in general, for each home sale made, you are pulling an individual or family out of a rental unit. These means that the owner of that rental unit loses income and has to find someone to fill that empty rental unit. That means to be competitive, he will ultimately have to reduce his rent which puts pressure on home price appreciation. If residential real estate recovery is going to be the backbone to this recovery...people are going to be in for a long wait.

Growth yes...we saw growth, but at what cost?

As for what is happening in Westchester County (my local area), NY. Real estate values are easily down 20% from their peak a few years ago. Not many foreclosure sales in my area. This is good because much of my area is single family homes with one income provider. Those with jobs are pretty much living the way they have lived before, but definitely with some belt tightening. I know the membership list at my golf club has taken a hit, so there are those who have lost their jobs. The malls are no where near as crowded as before, and it will be intersting to see what the holiday shopping season is like. I've seen restaurants close in our area, which likely means people are eating out less. My local B&M mentioned to me that more and more customers are looking for deals and are buying/smoking cheaper cigars than they had been before.

I commute into Manhattan every weekday, and I can say the trains while full are not as packed as they once were. Wall Street has taken a hit, that is for sure. I have friends that have been out of work for almost a year now. Real estate even in the city has taken a pounding, and not just residential. From the looks of it CRE psft. looks down - a lot with all the layoffs at law firms and financial firms, even big archetectural firms. NYC needs jobs for us to see a recovery on that front. Many worrying about their year-end bonuses...no one wants more company stock that vests in 5 years. Cash is king, and when bonuses make up at least 1.5x plus your salary...it is the bulk of you annual compensation. People are definitely nervous and axious, especially as many of seen pay cuts for the last year or two.

[anacostiakat]

Here in DC there are plenty of jobs in certain sectors (Accounting, IT, etc.). Unemployment rate is high like everywhere else.

[Shelby07]

Here in DC there are plenty of jobs in certain sectors (Accounting, IT, etc.). Unemployment rate is high like everywhere else.

A little over a year ago I didn't know anyone who was unemployed. Now I know several highly educated professional people who are out of work and finding it very difficult to find work. Some are on unemployment and all are digging into their savings or retirement accounts. Most of them are willing to take any sort of job at any salary. I would guess that when they do find a job they may go off of the unemployment rolls but they will be making a good amount less than their last paycheck.

The answer is simple... If it looks like a duck, and walks like a duck, and quacks like a duck, and craps like a duck, it's probably a duck.

Look around... do you see any ducks?

[smk819]

The economy in Washington which was not very good to begin with was hit by the announcement from Boing that the new 787 Assembly plant is to be built in South Carolina. This will mainly hit the towns to the north of Seattle, I am 60 miles south. In addition to Boing Employees a large number of suppliers to Boing will also be seeing a loss of business . On the home front, my wife is still unemployed, but she has had several encouraging interviews recently. Fortunatly I am stable and make enough that while the loss of her income hurts we will not be out on the streets or hungry. I really don't see recovery in the future as I believe the deficit is unsustainable and the only way to pay it back or service the debt is with inflated dollars, Remember the old Chinese curse "May you live in interesting times."

[peteando]

I work for a bank affiliate broker-dealer. We had some layoffs in early 2009, but everyone that was left picked up the slack. I think that is the problem--companies are realizing that they can make due with a smaller headcount, and 10% unemployment becomes the norm.

[chuck1rar]

Here in Japan no surprise that nothing much has changed in the last 15yrs....

A new government came into power but most of the parties members are old hands from the LDP who switched sides.

Nothing here will ultimately change until the people grow a backbone and decide to rid the parties of all the old wood.

But of course that will not happen as the people have no real say in who the party elects or its members.

Consumer spending is a little down as LVMH has reported some considerable downturn in Japan which affects about 40% of their global sales. LV recently canceled a development in Tokyo which would have been the biggest store in the world fro the group. But many other industries are seeing little change in their overall sales.

Am looking at selling my apartment here and was surprised to find more interest than I expected and an actual potential profit of about 10K (wow). Property market here is obviously not for investment.

Most people I know who own their own companies report no record profits but also no major losses here either.

Would I venture to say things here are not so bad.....well maybe not just after so long u get used to it always being not so great..

[Guest rob]

Here in Canberra, we never saw a Global Economic Crisis.

The worst that happened was that instead of buying 50" TVs... people bought the 42"

Instead of eating out twice a week, they out out once.

Instead if Cohiba we smoked Upmann.

We are pretty sheltered here... very low unemployment and above average incomes.

On top of all that the the government threw money at us in the way of stimulus packages.

[beachcougar]

Here in Virginia Beach, unemployment is about 6% up from 3.9% last year. We are mostly a military town so we have not been hit too hard. I am in the Defense Contracting business and we have seen no change at all.

Housing in this area is relatively unaffected below 350K. My home actually went up 4K last assessment.

We are lucky to be in a pretty recession proof area. I talk to my family back in Arkansas and Louisiana and there areas are being hit pretty hard.

[mkz]

For me and the Mrs, the economy has never been better actually. This is because of the extremely low house-morgage interests that currently is. Furthermore, I work in the food-industry and I recon people still has to eat...

Neverthenless... many people here has lost their jobs due to the problems in the car industry (Volvo and SAAB are big employers here on the westcoast) and their suppliers.

[Bahnofstrasse]

I own a high end restaurant and we have been seen our top line revenue cut in half. The Convention business disappeared for the most part of this year which is our main source of revenue. It is now just starting to come back as we will have our first monthly increase of the year this month. The concierge that we work with at all the major hotels are saying the bookings look strong for the 1st quarter of '10. Customers have refrained from buying the higher end wines and most are on strict budgets.

Real estate downtown has a glut of excess inventory as the local condo market was way overbuilt. You couple this with what you have on the market via foreclosures and this is truly a buyers market. It will take awhile for this inventory to be absorbed and I do not see that happening anytime real soon.

Job market here is soft. SD has a strong military economy so there is some stability in that area. Overall, things remain weak with subtle signs of the convention/tourism starting to turn.

[dicko]

My perception is that we have fared relatively well in the Western Australian wastelands... and are now on the upside. Long term projects on the up means that there are people with relatively secure jobs for the next five years. The housing market is gathering steam again, people are shopping, having their teeth whitened... building is gathering momentum. That is my perception, but then I may be in the cushy end of town not able to see the devastation... I would be interested to hear the opinion of other sandgropper fellas.

sandgroper here!

I work part time at a bottle shop and also study. work wise, I am in a "recession proof" industry. people still drink the same quantity but I've noticed regulars who used to buy a box of $30 bottles go for the $12 bottles now instead. For me I still get the same hourly rate and the same hours, coupled with lower prices for fuel, retail etc things have been marginally better financially.

However, uni wise, everyone is sh**ting themselves wondering if there will be a job at the end of their degrees. Limited vacation work at companies too (I missed out).

Have a few mates who work in trades, a few lay offs and doing odd jobs around the place. definitely not the big cash for blue collar workers at this stage. However, I would agree Zuma that most people are laughing here or the bad times aren't as bad.

Not being harsh here but a lot of people in this town need to learn restraint in the future. buying a new ute, big tv and holidays to bali from the equity on your overpriced house is not responsible.

[habone]

The place I work is actually 1 of the only places hiring...welders, machinists, etc.(ur basic fab shop). We were slow for that past 4 years and things are looking promising, but elsewhere its depressing. Escpecially NORTHEAST professional sports. The Browns are pathetic. The more things change the more they stay the same.

[CigarZen]

In Michigan unemployment in over 15% and has been for sometime. In Detroit I understand it is over 20%. A good friend in commercial real estate says it is brutal, the economy sucks. Another buddy in that industry does almost all his deal out of state. Lawyers, particularly transactional folks, say business is decidedly down.

I was talking to a bank clerk, she bought a house in a blue collar suburb of Detroit that about 3 years ago sold for north of $100K for $18K. The bank took a bath on a short sale. Time Magazine has moved reporters into a house in Detroit to chronicle the demise.

But in the nice suburbs the more posh restaurants are still fairly filled.

[samb]

A mid-size town in the Texas panhandle. The economy is fair. There are no new jobs, but the ones we have are going strong. The company I work for, a hospital, is doing very poorly, however. They have had 2 rounds of layoffs this year, neither of which affected me, but I'm low level. The future is not bright for my company. The town however is doin ok. As long as nobody quits their job, they should be alright.