# More Great Economic News

Discussion in 'Business & Economics' started by sandy, Jun 2, 2007.

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1. ### TruthSeekerFancy Virtual Reality MonkeyValued Senior Member

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15,162
I don't think she understands economics. Nor does she want to understand.

But here's a simple way of understanding some issues.
For instance, the GDP is not an accurate caluclation because it doesn't take into account all transactions. For instance, transactions between drug dealers are not taken into account, because they are unknown. When "illegals" get paied, that is not counted either (and since they get less the minimum wage, the overall result would obviously be an increase in GDP).

Also, GDP per capita spreads it evenly accross the population- that is, it doesn't take into account the unequal distribution of resources. So while the GDP per capita of the US could be, let's say $800,000 per capita, a few people are getting several billions while a lot of people are getting very little, which when averaged out would give you "$800,000 per capita". In other words, the per capita measure by itself is not very useful.

One of the key factors in economic analysis is the following two words: "nominal" and "real". The nominal figure is the one that is standardly calculated. The real one is the nominal figure adjusted for all other factors.

Here's a simple example. The nominal wage is $8. Wage stays the same, but inflation causes prices to increase. Now people cannot buy as much as before, because their money is not enough to afford the stuff they were buying before. In other words, "nominal" wage was constant, while "real" wage decreased. The problem is that most people always look at the nominal figures and aren't able to analyze the information to get to the real figures. 2. ### Google AdSenseGuest Advertisement to hide all adverts. 3. ### sandyBannedBanned Messages: 7,926 The only ones making$8 are the ones who work the really crappy jobs. Criminal alien roofers/construction guys can make $30/hr cash. Union guys get over 40, so the contractors hire the cheaper cash guys. Criminal aliens are making a lot of money in a variety of jobs: trucking, salons, landscape, house cleaning, auto service, handyman etc. I was wrong about the$25/hr cash in CA for house cleaning ladies in the nicer areas. It's up to $50/hr now in some places. 4. ### Google AdSenseGuest Advertisement to hide all adverts. 5. ### kmguruStaff Member Messages: 11,757 The Fed's role in the Bear Stearns Meltdown By Mike Whitney 06/30/07 "ICH" -- -- The Bank for International Settlements issued a warning this week that the Federal Reserve’s monetary policies have created an enormous equity bubble which could lead to another “Great Depression”. The UK Telegraph says that, “The BIS--the ultimate bank of central bankers--pointed to a confluence a worrying signs, citing mass issuance of new-fangled credit instruments, soaring levels of household debt, extreme appetite for risk shown by investors, and entrenched imbalances in the world currency system. 6. ### Google AdSenseGuest Advertisement to hide all adverts. 7. ### sandyBannedBanned Messages: 7,926 The media drives a lot of problems. I blame it for the housing slowdown. They were screeching for years how the bubble was bursting. Yes the volatile areas (CA,FL,NV,NY...) go up and down with the market, but most of the rest of the country is ok. We are seeing a correction now. The last 7 years were out of control skyrocketting prices in many areas. A lot of people I know made their fortunes. I prefer to remain optomistic. Please Register or Log in to view the hidden image! 8. ### TruthSeekerFancy Virtual Reality MonkeyValued Senior Member Messages: 15,162 That was an example. E-X-A-M-P-L-E. Criminal alien roofers/construction guys can make$30/hr cash. Union guys get over 40, so the contractors hire the cheaper cash guys. [/quote]
I take you can live with that kind of money? How much do you need to survive there? I mean... the minimum for a single person?

Also, if employers can afford paying them less, why don't they do that?

Would you like to do any of those jobs? Theya re not taking really high paying jobs. And according to you, the unemployment rate is not high. So what's up with all the complaining?

Good for them. That's what you get for cleaning rich peoples' homes!

9. ### nietzschefanThread KillerValued Senior Member

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Yup and why are they doing that do you think? So they can foreclose and take everybody's stuff.

10. ### kmguruStaff Member

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11,757
Ladies in Mustang Ranch make much more...

11. ### quadraphonicsBloodthirsty BarbarianValued Senior Member

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Not true. GDP is usually calculated by summing up consumption spending, adding investment, adding government spending, and then adding the difference between exports and imports. Employee compensation figures are normally not used. So, as long as the drug dealers eventually spend the money they're making (and every indication is that they consume a disproportionately high level of their income), it will show up in the consumption numbers. The only portion that goes uncounted is the stock of capital they retain for funding drug purchases. In the case of illegal workers, the vast majority are paid above-the-board using fake social security numbers. So their pay is on-record (and taxed, and they don't get below minimum wage); the only discrepancy is that the social security number in question doesn't match up to the right person. Even the small amount of under-the-table illegal workers' product shows up in the consumption spending, as they need to a place to sleep and food to eat.

A much bigger hole in GDP calculations, at least in developed countries, is that uncompensated work (i.e., charity) is not included.

12. ### TruthSeekerFancy Virtual Reality MonkeyValued Senior Member

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15,162
How much money is in the drug industry then?

And you are talking about the GDP from the expenditure side?

13. ### kmguruStaff Member

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11,757
Calculations most closely followed by the industry:

GDP = C + I + G + (X-M)

C= Personal consumption irrespective of debt (so if you are borrowing money, count that too)

I = Gross private Investment (Do not count government giveaway)

G = Government purchases (Do not double count...that is hard)

X -M = Net export

Usually C is the largest number. Perhaps they count all the companies annual sales data. They might add all the people income too from IRS. Underground economy such as drug trade is difficult to count unless

C= Gross income of all people plus gross sales of all companies with the assumption that everything someone produces is consumed and anything left in the underground is bought by the personal income.

14. ### Billy TUse Sugar Cane Alcohol car FuelValued Senior Member

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23,198
We can describe it differently and still agree on the LEVEL, but I am also looking at which way the level is changing. BTW, the glass was very full a decade ago when oil sellers and China were happy to hold dollars.(Now all are trying to get out.)

Don't take my word for the fact that many Americans are also now trying to get out of dollars. Hear the chief analysist (a lady) for Charles Schwab tell you which funds are receiving the greatest inflows. (3 times more going into foreign funds and ETFs that invest outside of the US than are going into US mutual funds and ETFs.) Etc.

I warned you years ago. Told you to buy ADRs. She states the foreign markets have gained >90% while the US markets, even when stated in weaker dollars, are up only 30%, in same period. etc.

Listen to her information packed five minute presentation at:

http://q1.schwab.com/s/r?l=43480&m=10001468cf2ef00014107a

Last edited by a moderator: Jul 5, 2007

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16. ### Billy TUse Sugar Cane Alcohol car FuelValued Senior Member

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23,198
me too.

I Just heard on CNN that the British pound is at a 26 year high against the dollar. I will tell you the main reason: Lawrence of Arabia.

Ever since he helped build "nations" (Job still far from complete - still more tribal monarchs, extended family clans etc. than real nations - why Iraq intervention was doomed from start, even if well done, instead of stupidly.) the Arab sellers of oil and Iran etc. have turned to London for their financial services, ususally even if the end investment was in USA, a British agent made the deal for them.

Thus, now that they do not want to get stuck holding dollars, and also understand that they will be invaded by US if they sell oil for Euros etc. (as Saddam learned the hard way when he did so) they sell oil for dollars and immediately send these dollars to London to exchange for items of more lasting value. Thus, like Brazil for other reasons, there is flood of dollars coming to London and few who really want them. - I.e. people only willing to buy dollars for relative-few, historically-low, number of pounds. That is, the Pound is very strong and getting stronger as the dollar grows weaker every year.

This slide of the dollar down is still very orderly and the bankers will keep it so as long as they can, but the "run on the dollar" is coming, probably about the same time that the US social security system pays out more than the FICA tax takes in to the SS system in 2012. As I have been predicting, in 5 + or - 3 years. Perhaps by 2010 when many will foresee what I did 5 years ago: - The new world order with only China, India (and perhaps S. Korea, Japan or even Vietnam?) and their suppliers of raw materials and energy escaping the extreme depression that will follow dollar colapse.

Some, in denial, still can not see these unpleasant facts may report me for being "off thread" as it is hardly "more good news."

Last edited by a moderator: Jul 5, 2007
17. ### sandyBannedBanned

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7,926
Even more great economic news:

Employers boosted payrolls by a better-than-expected 132,000 jobs in June.
Workers saw solid gains in their wages last month.

New hiring in the areas of education, health services, leisure and hospitality and government drove overall job growth last month. Construction companies also expanded employment .

http://biz.yahoo.com/ap/070706/economy.html?.v=10

Yay. :bravo:

18. ### Billy TUse Sugar Cane Alcohol car FuelValued Senior Member

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23,198
Looking at the trend of water level ("Glass half full or half empty" only looks at the level):

Euro hits all time high against the dollar today (11 July - Takes 1.37+ dollars to buy a Euro.)

China's June trade hits all time one month high (27 billion dollars* up 80% compared to July 05)

DR Horton, largest builder of homes in USA, has first quarterly loss in its entire history - sales down 40%, backlog of unsold homes near or at all time high, prices dropping. Sub prime problem growing worse - no one expects any recovery in 2007 Sears, Home Depot, etc. shares dropping approximately 5% in one day despite announcing big buy-back of shares.

See article

21. ### Billy TUse Sugar Cane Alcohol car FuelValued Senior Member

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23,198

"...Many homeowners are already in trouble. Figures from MacroMavens, an economic consultancy, suggest that 23% of adjustable-rate mortgages, covering loans with a value of \$693 billion, are already in negative equity, where the loan is worth more than the property. But the full impact of defaults may not be felt until the low “teaser” rates on mortgages expire and push up borrowing costs. These teaser loans were done on a “two and 28” basis (with low rates applying for the first two years, and higher rates for the next 28). So the worst news from the 2006 vintage may not be felt until 2009.

Nor does default necessarily mean the end of the road. Few lenders want to foreclose, a process that takes ages, incurs massive costs and often causes the departing residents to trash the house. It is better to agree on a quick sale. But too much selling will force prices lower, weakening the rest of the portfolio.

So it may take a while for the property of struggling borrowers to trickle onto the market. Jeffrey Kirsch of American Residential Equities, a company specialising in buying delinquent loans, says foreclosing a property can take more than three years. He doubts the housing market will bottom out until the first quarter of 2009. ..."

22. ### sandyBannedBanned

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Stocks Soar; Dow Up More Than 330

Stocks Soar; Dow Up More Than 330

NEW YORK (AP) - Wall Street barreled higher Wednesday for the second day in a row, giving the Dow Jones industrial average its biggest two-day point gain five years after a Federal Reserve official hinted that the central bank may lower interest rates again....

http://www.breitbart.com/article.php?id=D8T6TL781&show_article=1

:bravo:

23. ### pjdude1219The biscuit has risenValued Senior Member

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16,447
thats all well and good but what about the people who cannot afford stocks?