China's economy smaller in new measure, still number two: study
<SMALL>AFP| Dec. 17, 2007 | staff</SMALL>
WASHINGTON (AFP) - The size of China's economy is overestimated by some 40 percent based on most current measures, but is the world's second largest, the World Bank said Monday.
In a report ranking the world's economies, the World Bank said a more reliable method of estimation using "purchasing power parity" (PPP) shows a much smaller value than the traditional market value estimates which the Bank called "less reliable."
The study carried out by the World Bank and other partners was "the most extensive and thorough effort" to measure the relative size of 146 economies using the PPP method which strips out the effect of exchange rates, a Bank statement said.
China participated in the survey for the first time and India for the first time since 1985.
China still ranks as the world's second largest economy with over nine percent of world production, but that compared with 14 percent under the old methodology.
India is the fifth largest with over four percent of the world total, up from two percent using market exchange rates.
In the study, the United States still has the world's biggest economy with 23 percent of global output, but that is down from 29 percent using market rates.
Japan ranks third under the PPP method with seven percent of global output, lower than using market rates
<SMALL>AFP| Dec. 17, 2007 | staff</SMALL>
WASHINGTON (AFP) - The size of China's economy is overestimated by some 40 percent based on most current measures, but is the world's second largest, the World Bank said Monday.
In a report ranking the world's economies, the World Bank said a more reliable method of estimation using "purchasing power parity" (PPP) shows a much smaller value than the traditional market value estimates which the Bank called "less reliable."
The study carried out by the World Bank and other partners was "the most extensive and thorough effort" to measure the relative size of 146 economies using the PPP method which strips out the effect of exchange rates, a Bank statement said.
China participated in the survey for the first time and India for the first time since 1985.
China still ranks as the world's second largest economy with over nine percent of world production, but that compared with 14 percent under the old methodology.
India is the fifth largest with over four percent of the world total, up from two percent using market exchange rates.
In the study, the United States still has the world's biggest economy with 23 percent of global output, but that is down from 29 percent using market rates.
Japan ranks third under the PPP method with seven percent of global output, lower than using market rates
huh
what does that article have anything to do with a bull, bear, market argument
anyway....i guess just food for thought? that china catching up to us
china will fall hard when party stops they have so much overcapacity that they won't know what the hell to do with
6k to 4881 already since market peaked....more pain to come
what does that article have anything to do with a bull, bear, market argument
anyway....i guess just food for thought? that china catching up to us
china will fall hard when party stops they have so much overcapacity that they won't know what the hell to do with
6k to 4881 already since market peaked....more pain to come
What does 3/4 of the post here have to do with a bull/bear market.Daily updates on the ticker? Is it a bear market TODAY? and a bull market tomorrow.Its general economic data which in itself is just another form of validation as to the dominance of the US economy.Which incidently is one of the main aspects in the big picture of a bull/bear scenario and why the dollar can fall and rise dramatically and we dont all have to jump ship.Ill assume youve seen the trade deficit #s from today as well.
Got your Christmas shopping done yet tiz or does everyone get a lump of coal....jk
Bush just answered the richard nixon question about the stock market.
Asked what he thought about the stock market, he answered, "the fundamentals of the economy are strong, if I had any money I would buy stocks".
Once upon a time, I believe the market really tanked after nixon similarly answered a question about stocks.
:smoker2:
Asked what he thought about the stock market, he answered, "the fundamentals of the economy are strong, if I had any money I would buy stocks".
Once upon a time, I believe the market really tanked after nixon similarly answered a question about stocks.
:smoker2:
hno: 
uke1::coke::hammerit:smashf::hitting:what's he gonna do this time?
he did that crap through the bear shake before we started falling after he "only" cut 1/4
and day after came out with some BS about them working with other central banks etc....
running out of BS ammo basically
man thought they might have a late rally in store for a minute there but nope falling to lows of day into close
he did that crap through the bear shake before we started falling after he "only" cut 1/4
and day after came out with some BS about them working with other central banks etc....
running out of BS ammo basically
man thought they might have a late rally in store for a minute there but nope falling to lows of day into close
this one's for you bulls saw this on yahoo front page
don't see that R word popping up much right now in the MSM so this ain't the bottom for this leg....last time they let the R word fly around is when the bear shake came
i love his political predicitions too rudy vs. hillary
you can't make this shit up
jew name too (i have jewish friends that like ron paul not knocking jews just the establishment ones)
:nohead:
-----------------------------------------------------------
Jeremy Siegel, Ph.D. The Future for Investors
Posted on Friday, December 14, 2007, 12:00AM
It’s time to dust off the proverbial crystal ball and predict what’s in store for 2008. But before doing so, let’s see how I did with last year’s forecast.
Well, I was pleasantly surprised to see that I got quite a lot right despite missing the subprime crisis. I predicted that the economy was poised for a mid-cycle slowdown, similar to what we experienced in 1995, the year after the Fed had also raised rates. I predicted GDP growth would slow in 2007 to 2½% to 3%, and despite the credit crunch, this estimate was very close. Even if this quarter’s GDP grows by a measly 0.5%, GDP growth for 2007 will be at 2.5%.
For the US stock market, I predicted an 8% gain and greater gains for foreign markets. December still has two weeks to go, and given the recent volatility, the market could end the year anywhere. But as of now, the S&P 500 Index is up 6.3%, while foreign markets have done significantly better. The foreign developed markets, represented by the EAFE Index, have returned 15.6% and the emerging markets continue their torrid pace, chalking up a 42% gain. Last year, I said that if US stocks climbed less than 8% in 2007 it would be due to $3 a gallon gasoline and the dollar falling below $1.45 per euro.
Subprime Crisis
Both barriers were breached, but the main reason for this year’s stock market malaise was the credit crisis, which, despite my bearishness on real estate, I didn’t see coming. I’ve written a fair amount about this crisis on Yahoo! Finance and downplayed its importance to the overall economy. Why? I never expected the fear of debt defaults to so swamp the reality of this problem.
I think the actual number of delinquencies next year will be below what the market predicts, as investors have overreacted to the mortgage crisis. When this happens, it could lead to a nice recovery in financial stocks.
Economic Growth
But the impact of the crisis on the psychology of consumers and business will leave their mark. I predict that GDP will slow in the first half of next year to between 1% and 2%, and rise in the second half, as risk premiums come down and the cost of capital falls. Overall I expect 1.5% to 2.5% GDP growth in 2008 and I believe the economy will avoid a recession.
Stocks and Bonds
I think the stock market will have another winning year in 2008. For every percentage point that stock returns fall below 8% (my prediction) this year, they should exceed 8% next year (meaning, for example, if stocks gain 6% this year, they should finish 2008 up 10%).
And I believe that financial stocks, which have plummeted 18% so far this year, will outperform the S&P 500 Index next year as the credit crisis fades.
Interest Rates
What does all this mean for interest rates? The Fed cut the Fed funds rate to 4.25% on December 11, but it will have to do more in the coming months. I believe that the Fed will get rates down to 3.5%, before ratcheting them upward in the second half of next year.
Treasuries did well in 2007, as interest rates on top-rated securities plunged in light of the credit crisis. But as the risk spreads narrow, money will flow away from government bonds and their interest rates will rise. I recommend investors cash in governments and top rated corporate bonds now – you got a nice ride that you won’t get next year.
Oil
There are always events (or “risks” as Wall Street calls them) that can upend these forecasts and oil is always one of them. Despite some promising political developments in the Mideast, history has taught me to be cautious.
If oil surges past $100 a barrel for whatever reason, we will be in trouble. Three dollar gasoline did not prove to be the tipping point for the consumer in 2007. But with a weak housing market, I believe $4 gasoline would do considerable damage to consumers’ pocketbooks in 2008. And $4 gasoline would happen if oil rose to $120 a barrel or higher.
Politics
Of course, next year is a presidential election. Although the primaries appear up for grabs now with Barack Obama and Mike Huckabee making a good run, I believe that the Democrats and the Republicans will nominate front-runners Hillary Clinton and Rudy Giuliani. After a hard fought battle, Hillary will pull through as the electorate seems ready for a new party to govern from the White House.
Since I predict the Democrats will also keep the House and Senate, a Democratic sweep will send some nervous flutters through Wall Street. But Clinton will prove to be as moderate on economic issues as was her husband. This means that although taxes will rise on dividends and capital gains when the current low rates expire in 2010, the increases will be moderate and Wall Street will be relieved.
I’ll wait until after next year’s election before offering up another set of projections for 2009. In the mean time, have a healthy and prosperous new year!
don't see that R word popping up much right now in the MSM so this ain't the bottom for this leg....last time they let the R word fly around is when the bear shake came
i love his political predicitions too rudy vs. hillary
you can't make this shit up
jew name too (i have jewish friends that like ron paul not knocking jews just the establishment ones)
:nohead:
-----------------------------------------------------------
Jeremy Siegel, Ph.D. The Future for Investors
Posted on Friday, December 14, 2007, 12:00AM
It’s time to dust off the proverbial crystal ball and predict what’s in store for 2008. But before doing so, let’s see how I did with last year’s forecast.
Well, I was pleasantly surprised to see that I got quite a lot right despite missing the subprime crisis. I predicted that the economy was poised for a mid-cycle slowdown, similar to what we experienced in 1995, the year after the Fed had also raised rates. I predicted GDP growth would slow in 2007 to 2½% to 3%, and despite the credit crunch, this estimate was very close. Even if this quarter’s GDP grows by a measly 0.5%, GDP growth for 2007 will be at 2.5%.
For the US stock market, I predicted an 8% gain and greater gains for foreign markets. December still has two weeks to go, and given the recent volatility, the market could end the year anywhere. But as of now, the S&P 500 Index is up 6.3%, while foreign markets have done significantly better. The foreign developed markets, represented by the EAFE Index, have returned 15.6% and the emerging markets continue their torrid pace, chalking up a 42% gain. Last year, I said that if US stocks climbed less than 8% in 2007 it would be due to $3 a gallon gasoline and the dollar falling below $1.45 per euro.
Subprime Crisis
Both barriers were breached, but the main reason for this year’s stock market malaise was the credit crisis, which, despite my bearishness on real estate, I didn’t see coming. I’ve written a fair amount about this crisis on Yahoo! Finance and downplayed its importance to the overall economy. Why? I never expected the fear of debt defaults to so swamp the reality of this problem.
I think the actual number of delinquencies next year will be below what the market predicts, as investors have overreacted to the mortgage crisis. When this happens, it could lead to a nice recovery in financial stocks.
Economic Growth
But the impact of the crisis on the psychology of consumers and business will leave their mark. I predict that GDP will slow in the first half of next year to between 1% and 2%, and rise in the second half, as risk premiums come down and the cost of capital falls. Overall I expect 1.5% to 2.5% GDP growth in 2008 and I believe the economy will avoid a recession.
Stocks and Bonds
I think the stock market will have another winning year in 2008. For every percentage point that stock returns fall below 8% (my prediction) this year, they should exceed 8% next year (meaning, for example, if stocks gain 6% this year, they should finish 2008 up 10%).
And I believe that financial stocks, which have plummeted 18% so far this year, will outperform the S&P 500 Index next year as the credit crisis fades.
Interest Rates
What does all this mean for interest rates? The Fed cut the Fed funds rate to 4.25% on December 11, but it will have to do more in the coming months. I believe that the Fed will get rates down to 3.5%, before ratcheting them upward in the second half of next year.
Treasuries did well in 2007, as interest rates on top-rated securities plunged in light of the credit crisis. But as the risk spreads narrow, money will flow away from government bonds and their interest rates will rise. I recommend investors cash in governments and top rated corporate bonds now – you got a nice ride that you won’t get next year.
Oil
There are always events (or “risks” as Wall Street calls them) that can upend these forecasts and oil is always one of them. Despite some promising political developments in the Mideast, history has taught me to be cautious.
If oil surges past $100 a barrel for whatever reason, we will be in trouble. Three dollar gasoline did not prove to be the tipping point for the consumer in 2007. But with a weak housing market, I believe $4 gasoline would do considerable damage to consumers’ pocketbooks in 2008. And $4 gasoline would happen if oil rose to $120 a barrel or higher.
Politics
Of course, next year is a presidential election. Although the primaries appear up for grabs now with Barack Obama and Mike Huckabee making a good run, I believe that the Democrats and the Republicans will nominate front-runners Hillary Clinton and Rudy Giuliani. After a hard fought battle, Hillary will pull through as the electorate seems ready for a new party to govern from the White House.
Since I predict the Democrats will also keep the House and Senate, a Democratic sweep will send some nervous flutters through Wall Street. But Clinton will prove to be as moderate on economic issues as was her husband. This means that although taxes will rise on dividends and capital gains when the current low rates expire in 2010, the increases will be moderate and Wall Street will be relieved.
I’ll wait until after next year’s election before offering up another set of projections for 2009. In the mean time, have a healthy and prosperous new year!
