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  • inlet_boater inlet_boater Sep 4, 2011 3:16 PM Flag

    Is Normlasky a BBT plant?

    GDP growth for the first half was almost non-existent and the second qtr may still be revised to negative. Every major financial institution (GS, MS, UBS, etc) has cut growth rate estimates for the second half (some twice). Recent data points have been terrible (latest Aug employment). S&P earnings estimates have and are being cut. $100 next year is a dream.

    I do not see how you can suggest that recession is not likely - many analysts now have the liklihood at 50% or more).

    QE3 ( http://www.financialsense.com/contributors/bruce-krasting/2011/09/01/the-feds-plan-rumors-of-news ) may provide a respite, but this situation will not be over until the financial system is flushed of 10s of trillions $s of toxic derivatives.

    You need to trade those rose colored glasses for ones with clear lenses. :>)

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    • "GDP growth for the first half was almost non-existent and the second qtr may still be revised to negative."

      If you've be tracking the #s you would have known that the bureau of economic analysis in August 2011 changed their methodology in estimating quarterly gdp resulting in the drop in 1st qtr gdp from 1.9 to .4%. Major revisions were also made to subsequent qtrs and years. The 1.5% pt. drop was primarily due to changes in inventories and trade balance. Real personal consumption still increased 2.1% in the 1st 2011 unchanged I believe from the third estimate.

      If the economy is so bad, why did real personal consumption spending in July increase .8% or 9.6% annualized? Imo, I think it's due to "catch up" from the second qtr 2011 when real pce spending was reported at less than 1%. I think's there's some fluff in the gov't data and I look at trends and not blips in data points. Retail sales and car sales continue to be ok and do not suggest recession.

      Really doubt we'll see negative gdp in the second qtr 2011. Generally, there are not huge changes from the second to third and final estimate.

      Take off my rose color sunglasses? Last time I checked they're clear.

      • 1 Reply to normlasky
      • If you've be tracking the #s you would have known that the bureau of economic analysis in August 2011 changed their methodology in estimating quarterly gdp resulting in the drop in 1st qtr gdp from 1.9 to .4%.

        That makes no sense. If the methodology changed in August then it was known in April when GDP was first reported for qtr1.

        Like you said gotta look at the trend. There are two things about personal consumption we have to be aware of - the % of consumption of the upper echelon consumer (and it is a very significant % of consumption).

        I would argue looking at the results of companies like Dollar General tells you more than month to month consumption #s. Things are so bad people are trading "down" from WalMart. How do you explain that away? Consumers are hurting and consumer debt is still at 2007-2008 levels.

 
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