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  • normlasky normlasky Sep 4, 2011 8:13 AM Flag

    Is Normlasky a BBT plant?

    " One of two things is going to happen. Unemployment goes to 18% or inflation goes to 10%"

    The driver of last recession was excessive consumer debt fueled by Greenspan, FNM/FRE, and Wall Street greed.

    Tell me what the drivers are go 18% unemployment or double digit inflation considering:

    1. US population growth is 1% per year resulting in 1.1 million new household formations.

    2. Construction is at rock bottom and has been that way for several years. Multifamily housing is likely to increase significantly in 2012 and thereafter.

    3. Manufacturing jobs have increased by 300,000 in last year. Long way to go to recover the 4.5 million jobs lost since 2001.

    4. American business is doing very well driven by 8% growth in emerging nations. Intel, for example, derives 40% of its sales from oversea.

    5. Consumers have substantially cut debt.

    6. Refis have and continue to improve consumer discretionary income. Big surge in refis in 3rd qtr. 2011.

    7. Bank balance sheets are rapidly improving. I think their loan losses will drop to 75 bsp in 2012.

    8. Simpson/Bowles has a good solution to US budget deficit. Can be implemented without wrecking US economy.

    9. Relatively high unemployment will keep inflation down.

    10. US still imports $300 billion of oil. Will drop to zip eventually as US becomes energy independent.

    The list goes on. Maybe you can name a few negatives which will double unemployment to 18%?

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    • Maybe you can name a few negatives which will double unemployment to 18%?

      Who needs a few items - unemploument/underemployment is already near 18%. But let me answer in one word: Japan. Check it out we are on the same path with QE1, QE2, QE3, etc...

      Or, if you don't like that answer I have another one word answer: deflation. It has got to happen to flush the system. The Fed and the govt may delay it but natural economic cycles will be satisfied.

      5. Consumers have substantially cut debt.

      Mainly due to defaulting on mortgages, CCs, etc. The consumer debt still rivals annual GDP so any decrease has been very marginal.

      I can rebut many of your other points, but what is the use - you got those rose colored glasses on. lol

      • 1 Reply to inlet_boater
      • Who needs a few items - unemploument/underemployment is already near 18%. But let me answer in one word: Japan. Check it out we are on the same path with QE1, QE2, QE3, etc...

        We're not Japan. Their population is in serious decline - we're not.

        "deflation. It has got to happen to flush the system?

        Really? So the 25% decline in house prices is only the beginning. Hmmm.. world population increasing 2%/year, China and India growing at 8% per year and commodity prices are going to tumble. I'll have to think about that.

        "The consumer debt still rivals annual GDP so any decrease has been very marginal."

        Incorrect. Go consult the Federal Reserve data. Household debt service as % of disposal income have decline 23% for renters (2004) and 12% for homeowners (2007) (half of them who have no mtgs).

        Also consumer debt as a % of disposal income has dropped by 27% since 2004.

        Marginal you say. Facts do not support your opinion.

        Things are not great in the US. We have many problems. But we're not going to drop off the cliff. It's going to be slow growth for a number of years and this has set the stage for major consolidation and cost reduction in the banking industry. Strong banks are great investments at current prices

    • 1. US population growth is 1% per year resulting in 1.1 million new household formations.

      You should read this on the composition of future population demographics:

      http://finance.yahoo.com/retirement/article/113444/shrinking-workforce-boomers-curb-expansion-decades-bloomberg

    • Norm, your are joking, right. We are at 18% right now, especially given the way the numbers are now defined vs the way they were in the 1970s and this "underemployed" nonsense. The fact is everything good can be explained by two words: MONETARY POLICY. And the current monetary policy is not sustainable...we are simply delaying the inevitable. Just wait when the government (i.e.the fed) has to take out the phony supports. You will not want to be owning this or any other bank stock then. Just gold. then when asset prices plummet and all the foreign investors who are salivating at the dreary price of the dollar get caught with their pants down, then you move back in.

      • 2 Replies to nobankersplease
      • Nobank - you are one sick puppy. I realize you are attempting to destroy this country; however, I have hopes that more intelligent and less selfish people will prevail.

        Incidentally, Norm knows more about banks and banking than you can ever hope to. He shows a lot of patience and tolerance to waste his time attempting to educate someone as ignorant as yourself.

      • "Norm, your are joking, right"

        Your doom and gloom forecast is not justified. Yes, the construction industry is at rock bottom. Our manufacturing industry has substantially declined. There is major abuse in our social programs costing us hundreds of billions of dollars each year. We're currently running a $1.1 trillion deficit per year without war costs. All these things are fixable. I'm optimistic that American business will show our politicians how to be good citizens and stop partisan politics. As a country American business is one of our key competitive advantages and is the major reason we're a great nation.

        If this country is going down the "rat-hole" as you suggest why has disposable income per person in 2005 dollars more than double since 1970: 1970 - $15151, 1980 - $18855, $23557, 2000 -$28886 and 2010 - $32446. Now maybe on a medium basis it is not as favorable because many families do not understand and emphasize the importance of education to their kids while the situation in dramatically opposite in Asia. That's a choice they have made and if they want to live in poverty because they're not competitive with the labor force worldwide so be it.

        Bottom line is that I disagree with your opinions because they are not supported by fact. I think if you spent more time researching your subject matter your opinions might be different. But then again, I think you're lazy and unambitious.

 
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