Any FA guy here care to comment on this one?

小亥

[size=130%]Basically...

2008 GDP = $14.3 TRILLION
2009 GDP (assuming THE NEED for 4% growth) = $14.9 TRILLION
2010 GDP (assuming THE NEED for 4% growth) = $15.5 TRILLION

2008 GDP (roughly $14.3 Trillion) Breakdown by component:

• $10.1 Trillion Consumer Spending (71%)
• $2 Trillion Business Investment (14%)
• $-600 Billion Import/Export (-5%)
• $2.9 Trillion Government Expenditure (20%)

OK, let's conservatively assume a 25% contraction in personal consumption expenditures over the next 2 years (-12.5%/annum). I am basing my estimates of a 25% contraction in consumer spending upon the following:

• Overall numbers of unemployed going forward
• Average percent decline in value of housing
• Percentage(or ratio) of consumer debt to consumer spending (Remember, consumerdebt of roughly $2.5 TRILLION comprises 25% of the consumerexpenditures portion of GDP and 17% of overall GDP.)

So, a 25% contraction in consumer expenditure over the next 12-24 months means:

• 2009 Consumer Spending as a measure of GDP = $8.75 Trillion
• 2010 Consumer Spending as a measure of GDP = $7.5 Trillion

Now, we also need to realize the business investment will contract roughly at a level that shadows a drop in consumer spending.

• 2009 Business Investment as a measure of GDP = $1.75 Trillion
• 2010  Business Investment as a measure of GDP = $ 1.4 Trillion

Exportswill not increase. If anything, we will continue to see a contractionin the relationship between imports and exports. For the sake of myargument, however, I will keep the ratio at roughly -5%, or -$500 Billion.

So, let's look at 2010:

• GDP (assuming THE NEED for 4% growth) = $15.5 TRILLION
• Consumer Spending = $ 7.5 Trillion
• Business Investment = $ 1.4 Trillion
• Import/Export = $-500 Billion

[size=130%]7.5 + 1.4 - .5 = 8.4

15.5-8.4 = 7.1

CONSERVATIVELY, the government will need to spend roughly $7 TRILLION in 2010 to "produce" 4% GDP growth. That $7 TRILLION will represent roughly 45% of GDP.

In2010, the government expenditure portion of GDP will have risen fromit's current level of about 20% to 45%, or from $2.8 TRILLION to $7TRILLION. All of this spending MUST occurso that the government can claim that we are, in fact, growing GDPyear-on-year and that the "Recession" is over. I have a few questions:

• What's the government spending those $7,000,000,000,000 on?
• How's the government getting the money to spend?
• Where is the money coming from?
• What does the government think 2011 and 2012 will look like?

I have my opinions. What are yours?

revolver

So what's your opinion please?

小亥

This is not mine article. http://ashizashiz.blogspot.com/2 ... tml?ref=patrick.net

My view is marginal GDP will be negative for 2009 and 2010. The real results hang in the hands of U.S. people. Sorry, should be US congress and senate. Most likely, they will just play bullsh*t political games. 互相扯皮。It's likely that congress will pass another big spending bill for next year. However,  it's a big question mark whether it can save us from the depression scenario.

小亥

One possible scary scenario is US turn into a Fascism state.  What do you think?

colderdown

4# 小亥

I own NOC. OK, that's my point.