Filed under: Economic data, Presidential elections, Housing, Federal Reserve

Today’s report that the US economy grew buy 4.9% in the 3rd quarter even with pressure from the housing market, is a tribute to the strength of the economy. The fact that in the third quarter, the housing slump cut a sizable 1.08% off GDP, makes you admire just how strong and resilient the economy is. I hate to burst the bubble of the mainstream media (could they have a political agenda?), but facts are facts. Unemployment remains low at just 4.7%, the economy is growing, taxes remain low, and interest rates are falling. I admit that fourth quarter (Q4) GDP numbers wont equal Q3’s but a recession? Not going to happen. The pessimist always say that the consumer will stop spending and that will be the nail in the coffin. Well I have been hearing this for years and years, and they continue to spend and there is no reason to think they will stop spending.

The claim will be made that foreclosures are surging and that will be a big drain on the economy. What the FED needs to do is drop short-term rates even more. The sub-prime adjustable-rate mortgages (ARMs) are due to reset and since they are linked to Fed Funds markets as well as the LIBOR rate, so if the FED cuts these rates it will provide relief to the mortgage holder.

Continue reading Don’t want to be the Grinch, but the economy isn’t so bad

Read | Permalink | Email this | Comments

Share This

This entry was posted on Friday, December 21st, 2007 at 12:41 am and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.