27-04-2002 02:25									#61
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Hey, I already said I was wrong, no need to rub it in!

On a more serious note, who else feels that today has been very odd?

	27-04-2002 04:17									#62
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What was so odd about today? All the big US Stock indices cratered by more than 1% today. Lately, this seems like the usual pattern. Luckily such patterns are asymtotic

	27-04-2002 04:55									#63
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What do you mean when you say an individual day was odd. The market is chaotic, right. Don't you expect some odd days? What specifically is odd and is it odder than the normal type of odd that Brownian theories predict?

	27-04-2002 06:47									#64
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good news. I heard the economy grew 5.8% 1st quarter.

	01-05-2002 00:27									#65
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GNP is growing slower than GDP, but the difference between them is very small.

in 1980 GNP was 1.3% bigger than GDP
in 1990 it was 0.5% bigger
in 2000 it was 0.1% smaller

The main difference between them is repatriated profits - so whereas in 1980 the US recieved an extra 1.3% of it's income from profits that it's multinational companies made abroad, in 2000 it lost 0.1% of it's income as foreign multinationals sent profits made in the USA home to their own countries.

The gap turned negative in 1999 for the first time since records began in 1929.

It hasn't widened during the last few years, but that's probably because profits were collapsing much faster in the US than elsewhere.


Faded, it's not all good news - most of that 5.8% was due to inventory corrections (3.3% to be exact) and non-residential investment is still falling.

	01-05-2002 01:21									#66
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[spam post]

Gaak! I hate the GDP/GNP posts. Let's talk about things from an individual firm angle...

[/spam post]

(Don't stone me, please...macro-zealots...)

	01-05-2002 01:36									#67
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I felt that day was odd because of what Faded pointed out. Sure, consumer confidence fell but GDP growth was in the upper range of expectations so I wouldn't have expected US stocks and the US dollar to plunge.

El Freako, to be fair, most of the fall in nonrez investment was due construction. Q-Q capital spending was nearly stagnant, which is quite an improvement over the previous quarters, and capital spending is far more significant to future growth.

	01-05-2002 01:45									#68
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quote: Originally posted by Colon I felt that day was odd because of what Faded pointed out. Sure, consumer confidence fell but GDP growth was in the upper range of expectations so I wouldn't have expected US stocks and the US dollar to plunge.

My point remains. There is a huge amount of pure volatility in day to day market indices. Read some of the technical articles that have been written on this. (Journal of Finance is a good academic journal here...do a search on "Brownian motion". There is also a decent section in Brealey and Myers on this..with references to technical articles.)

Sure you can try to analyze day to day variations but be wary. The type of anthropamorphic talk that you hear about the market on CNBC is mostly wasted air...

	02-05-2002 01:15									#69
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I couldn’t find that article you mentioned, but I think that for it I have to subscribe to the journal, so could you tell me in short what a Brownian motion is?

Anyway, I’m not into daily analyses of market fluctuations, it was more of an off-handed question.

	02-05-2002 01:21									#70
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brownian motion is the random motion of gas molecules. Natural phenomana are often descirbed as brownian if they have large amounts of randomness. There is some math too...

I thought you were at a university. Can't you do a hard copy search. (Use the abstracts).

	02-05-2002 01:24									#71
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Anyway....there is a decent part of Brealey and Myers on this. you should buy that book. It is the bible of corp finance and is very accessible and even funny in spots...

	02-05-2002 01:42									#72
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I'm not studying at a university yet, GP.

What's the title of that Brealey and Meyers book? I'll see if I can borrow it at the library.

	14-05-2002 23:00									#73
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Interesting links brought up in the following article. Labor Productivity & Wages, Capital Productivity & Profits. It seems so simple, but I had never thought about it in those terms.

http://www.northerntrust.com/librar.../us/020513.html

I was interested in the capital productivity going negative while the stock market bubble was just getting a full head of steam.

Productivity has been going through the roof...

	15-05-2002 00:36									#74
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I think Kasriel's theory that profit growth will pick up due shrinking unit labour costs is correct but I also still believe that the productivity results have mostly been due increased investment rather than an acceleration in technological progress.

And I'm waiting until the next couple of revisions of the recent productivity figures before considering them.

	15-05-2002 00:47									#75
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quote: Originally posted by Colon I'm not studying at a university yet, GP. What's the title of that Brealey and Meyers book? I'll see if I can borrow it at the library.

Principles of Corporate Finance

If your library doesn't have it, try interlibrary loan. Presumably Belgium has that. Might have to read the English version. Not sure if there is a Flemish translation. It's good though. Has really thoughtful boxed asides on theoretical arguments related to bankruptcy risk, dividends, etc.

amazon link

	15-05-2002 13:03									#76
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quote: Originally posted by DanS Interesting links brought up in the following article. Labor Productivity & Wages, Capital Productivity & Profits. It seems so simple, but I had never thought about it in those terms.

Accelerating labour productivity growth and a fall in capital productivity is what you'd expect in an easy money overinvestment bubble. The question is what happens when the economy has to adjust to normal interest rate levels, normal risk assessment, normal savings rates, normal investment levels.....

Btw, as the ratio of income from labour to capital is pretty stable, and capital productivity is quite stable too, it is a folly to say that strong rises in labour productivity are good for profits. Temporary at best.

	15-05-2002 15:23									#77
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[freako]In fact since 1997, income from labour as a percentage of GDP in US has grown from 56% to 58% in 2000, while it had fallen from 58% in the 90-97 period, when productivity growth was moderate.[/freako]

GP, I saw that book in the store the other day. Pretty fat and expensive, maybe something to fill in my time with during the summer.

	15-05-2002 17:29									#78
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Great way to attract chicks, Colon The "future investment banker" act

	15-05-2002 17:36									#79
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Don't forget to rent a BMW for the evening.

	15-05-2002 18:59									#80
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quote: Originally posted by Roland Accelerating labour productivity growth and a fall in capital productivity is what you'd expect in an easy money overinvestment bubble. The question is what happens when the economy has to adjust to normal interest rate levels, normal risk assessment, normal savings rates, normal investment levels..... Btw, as the ratio of income from labour to capital is pretty stable, and capital productivity is quite stable too, it is a folly to say that strong rises in labour productivity are good for profits. Temporary at best.

dork

	15-05-2002 19:05									#81
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Good to know several jargons.

	15-05-2002 21:43									#82
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quote: Originally posted by Colon [freako]In fact since 1997, income from labour as a percentage of GDP in US has grown from 56% to 58% in 2000, while it had fallen from 58% in the 90-97 period, when productivity growth was moderate.[/freako] GP, I saw that book in the store the other day. Pretty fat and expensive, maybe something to fill in my time with during the summer.

Good bathtub or beach reading...

	15-05-2002 22:09									#83
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More like toilet to me

	16-05-2002 04:05									#84
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Sorry to bother y'all, but would anyone be in the mood to come over to the "Which is more important to the US?" and give some basic econ and econ history lessons? We're getting in that whole "cause of the Great Depression" argument again, among other things. You should at least be able to get a laugh out of some of the things going on in there.

Wraith
"Anything can be done with the right amount of smoke and mirrors."
-- Emily Weems

	16-05-2002 11:40									#85
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ooohhh, Wraith here! We're honored!

Btw, your sig is a nice summary of US business & economy during the last 10 years

	16-05-2002 13:41									#86
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Ugh. A natural rights debate again...

But can I take the "Anything can be done with the right amount of smoke and mirrors. (Emily Weems)" as new sig ?

	16-05-2002 19:27									#87
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"Great way to attract chicks, Colon The "future investment banker" act "

Mmmm that book is slightly to heavy to carry around. Maybe I should invite some to view it at home?

"Sorry to bother y'all..."

Don't be silly.

	16-05-2002 19:30									#88
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Hmm... I've never tried the "Do you want to see my book collection on investment banking?" strategy.

	16-05-2002 20:03									#89
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It could work you know, they like original opening lines.

	16-05-2002 20:29									#90
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Good point. Just don't try it in the bourse district.