US economy in negative growth

[Chinese-Dragon]

BBC News - US economy contracted in first quarter of 2014

The US economy shifted into reverse in the first three months of 2014 shrinking by an annualised rate of 1%, official estimates have shown.

It is the worst economic performance since the first quarter of 2011.

It is also a big fall on the 2.6% rise in economic output in the final quarter of last year.

The US Commerce Department's first reading of gross domestic product (GDP) showed the economy grew at an annualised rate of just 0.1%.

The fall in output was blamed on an unusually cold and disruptive winter - one of the coldest in the US for 20 years - and a plunge in business investment.

Economists estimate the weather could have cost up to 1.5 percentage points of GDP.

However, the Commerce's Department's report did not estimate the effect of the winter weather.

Rebound

The fall was also twice as big as economists expected.

Most Wall Street analysts had forecast the economy to contract by around 0.5%.

But the Commerce Department said there was already evidence that the economy was rebounding, with data ranging from employment to manufacturing activity already pointing to a sharp acceleration in economic activity in the second quarter.

Tumbling exports, while not as severe as initially thought, combined with stronger imports in the first quarter resulted in a larger than expected trade deficit which shaved 0.95 percentage points off US economic output.

-----------------

Out of China's $4 trillion in currency reserves, about $1 trillion is invested in US treasury bonds.

This is not a good tactic for us. Lending to America does not provide high returns from the treasury bonds, and encourages them to spend beyond their means.

We should redirect our reserves into buying real tangible assets, and America should control their spending more.

The last credit crunch was bad enough, we should not be encouraging another one.

 

[Raphael]

Remember when the Russian stock index tipped a little in the aftermath of the Crimea crisis, and Western media went into party mode and proclaimed that sanctions would turn Russia into a new Africa? I wonder if they're going to make a connection between US recession and all the imperialist wars they've waged over the decades.

 

[JayAtl]

That was because of bad weather and it is one quarter... we still hold the worlds confidence and our stock markets are soaring and actually went up .

meanwhile china has zero confidence in its own market and takes huge amount of its reserves and invests in US bonds- that will give them and have always given them negative returns.

imagine that... they fully know that the returns will be a net negative , but they rather buy 1 trillion of our bonds because they have no confidence in keeping that 1 trillion at home.

If I were chinese I would be more worried about this happening in China

I

 

[Chinese-Dragon]

meanwhile china has zero confidence in its own market and takes huge amount of its reserves and invests in US bonds- that will give them and have always given them negative returns.

imagine that... they fully know that the returns will be a net negative , but they rather buy 1 trillion of our bonds because they have no confidence in keeping that 1 trillion at home.

I don't think you actually know what reserves are.

Domestic investment represents about 50% of China's GDP, which is about $4-5 trillion every year. Compared to that, foreign direct investment (FDI) totals about $100 billion a year, miniscule in comparison to domestic investment.

Reserves and domestic investment are not an either/or thing. Domestic investment will always receive the lion's share compared to overseas assets, by an overwhelming margin.

As for confidence, nothing speaks more for confidence (or the lack of it) than a negative growth rate.

 

[JayAtl]

I don't think you actually know what reserves are.

Domestic investment represents about 50% of China's GDP, which is about $4-5 trillion every year. Compared to that, foreign direct investment (FDI) totals about $100 billion a year, miniscule in comparison to domestic investment.

Reserves and domestic investment are not an either/or thing. Domestic investment will always receive the lions share compared to overseas assets, by an overwhelming margin.

As for confidence, nothing speaks more for confidence (or the lack of it) than a negative growth rate.

I don't think you understand what investments into the economy is vs. investing in your financial institutions. China could have kept its trillion dollars in their own banks ...or bought its own bonds ...

and nothing speaks about " confidence" than one's own stock markets...

 

[Chinese-Dragon]

I don't think you understand what investments into the economy is vs. investing in your financial institutions. China could have kept its trillion dollars in their own banks ...or bought its own bonds ...

Investing in our own financial institutions?

Is that why the three largest companies in the world are all Chinese banks?

The World’s Biggest Public Companies List - Forbes

ICBC alone has assets worth over $3 trillion.

 

[JayAtl]

Investing in our own financial institutions?

Is that why the three largest companies in the world are all Chinese banks?

The World’s Biggest Public Companies List - Forbes

ICBC alone has assets worth over $3 trillion, that is significantly more than the GDP of your country India.

largest PUBLIC banks.. you dont know the difference between public and private

China stocks enter bear market, here’s what it means for you
http://finance.yahoo.com/blogs/breakout/why-china-s-bear-market-could-hurt-alibaba-s-ipo-164220458.html

 

[Chinese-Dragon]

largest PUBLIC banks.. you dont know the difference between public and private

Now I know you must be joking, you don't even know what a "Public company" is? I thought they teach this stuff in secondary school?

Public company - Wikipedia, the free encyclopedia

A public company, publicly traded company, publicly held company, or public limited company (in the United Kingdom) is a limited liability company that offers its securities (stock/shares, bonds/loans, etc.) for sale to the general public, typically through a stock exchange, or through market makers operating in over the counter markets. Public companies, including public limited companies, must be listed on a stock exchange depending on their size and local legislation.

ICBC is a public company, as is Lenovo, Apple and Microsoft.

The World's Largest Companies: China Takes Over The Top Three Spots - Forbes

 

[JayAtl]

Now I know you must be joking, you don't even know what a "Public company" is? I thought they teach this stuff in secondary school?

Public company - Wikipedia, the free encyclopedia



ICBC is a public company, as is Lenovo, Apple and Microsoft.

The World's Largest Companies: China Takes Over The Top Three Spots - Forbes

doh- Yeah I meant to say 'Govt bank' , not public... vs Private institution...ICBC...is essentially a state run bank. The government of China having direct/indirect ownership of over 70% of it.

Even was it alibaba recently decided they were not interested in opening an IPO in china and chose the US to do it.

 

[cirr]

largest PUBLIC banks.. you dont know the difference between public and private

China stocks enter bear market, here’s what it means for you
China stocks enter bear market, here’s what it means for you | Breakout - Yahoo Finance

The Chinese stock market has never been a barometer of the Chinese economy。

On the contrary，the Chinese economy tends to perform well when the stock markets languish。

The main Chinese stock indexes are where they were 10 or more years ago，though the stock prices of many a small companies have appreciated 10-or 20-folds over the period。

And the great growth stories seek listings on overseas stock exchanges（New York，NASDAQ，Hong Kong，London，Singapore etc）。Why？These companies do not quality for IPO on Chinese stock exchanges。

Odd？

 

[Star Wars]

BBC News - US economy contracted in first quarter of 2014

The US economy shifted into reverse in the first three months of 2014 shrinking by an annualised rate of 1%, official estimates have shown.

It is the worst economic performance since the first quarter of 2011.

It is also a big fall on the 2.6% rise in economic output in the final quarter of last year.

The US Commerce Department's first reading of gross domestic product (GDP) showed the economy grew at an annualised rate of just 0.1%.

The fall in output was blamed on an unusually cold and disruptive winter - one of the coldest in the US for 20 years - and a plunge in business investment.

Economists estimate the weather could have cost up to 1.5 percentage points of GDP.

However, the Commerce's Department's report did not estimate the effect of the winter weather.

Rebound

The fall was also twice as big as economists expected.

Most Wall Street analysts had forecast the economy to contract by around 0.5%.

But the Commerce Department said there was already evidence that the economy was rebounding, with data ranging from employment to manufacturing activity already pointing to a sharp acceleration in economic activity in the second quarter.

Tumbling exports, while not as severe as initially thought, combined with stronger imports in the first quarter resulted in a larger than expected trade deficit which shaved 0.95 percentage points off US economic output.

-----------------

Out of China's $4 trillion in currency reserves, about $1 trillion is invested in US treasury bonds.

This is not a good tactic for us. Lending to America does not provide high returns from the treasury bonds, and encourages them to spend beyond their means.

We should redirect our reserves into buying real tangible assets, and America should control their spending more.

The last credit crunch was bad enough, we should not be encouraging another one.

Does this have anything to do with Russia and China dumping the Dollar ?

 

[ephone]

There are already too many worries for China over the past 20 years.

If I were you, I would have put your worry for india first.

China is in way better shape than india for sure.

That was because of bad weather and it is one quarter... we still hold the worlds confidence and our stock markets are soaring and actually went up .

meanwhile china has zero confidence in its own market and takes huge amount of its reserves and invests in US bonds- that will give them and have always given them negative returns.

imagine that... they fully know that the returns will be a net negative , but they rather buy 1 trillion of our bonds because they have no confidence in keeping that 1 trillion at home.

If I were chinese I would be more worried about this happening in China

I

 

[JSCh]

I don't think you understand what investments into the economy is vs. investing in your financial institutions. China could have kept its trillion dollars in their own banks ...or bought its own bonds ...

and nothing speaks about " confidence" than one's own stock markets...

Errr... if by trillion dollars you meant foreign reserve, maybe you need to find out how foreign reserve come about and the possibility of investing it in domestic market/bond i.e verses buying US treasury.

 

[cheekybird]

Which country with oil is left that needs democracy

 

[JayAtl]

There are already too many worries for China over the past 20 years.

If I were you, I would have put your worry for india first.

China is in way better shape than india for sure.

why would I worry about India, I am american, living here. US is way better than you...

Errr... if by trillion dollars you meant foreign reserve, maybe you need to find out how foreign reserve come about and the possibility of investing it in domestic market/bond i.e verses buying US treasury.

reserves ...reserves you choose to put into US bonds vs yours

The Chinese stock market has never been a barometer of the Chinese economy。

On the contrary，the Chinese economy tends to perform well when the stock markets languish。

The main Chinese stock indexes are where they were 10 or more years ago，though the stock prices of many a small companies have appreciated 10-or 20-folds over the period。

And the great growth stories seek listings on overseas stock exchanges（New York，NASDAQ，Hong Kong，London，Singapore etc）。Why？These companies do not quality for IPO on Chinese stock exchanges。

Odd？

every developed nation has stock markets as a barometer, an indicator of where the economy is heading or at least at a minimum the strenght of it...besides china .