March trade deficit drops by bigger-than-expected amount

[Sapiens]

link

The Commerce Department reported Friday that the deficit totaled $58.2 billion, down 5.6 percent from February, a larger improvement than had been expected.

Ok, boys and girls, right on schedule. Watch T's drop and their yields rise.

[metalman]

Re: March trade deficit drops by bigger-than-expected amount

link



Ok, boys and girls, right on schedule. Watch T's drop and their yields rise.

'deal is off' as itulip says. we stop buying their goods, they stop buying our paper.

first we conned them into buying dot com stocks. then securitized crap. so what are going to sell them this time?

[Sapiens]

Re: March trade deficit drops by bigger-than-expected amount

so what are going to sell them this time?

"Security" (War).

[jtabeb]

Re: March trade deficit drops by bigger-than-expected amount

"Security" (War).

"Sustenance" (FOOD) -> see the video on MONSANTO and GM crops polluting naturally occuring varities. (Kill there food supplies and they'll have to buy from us)

[GRG55]

Re: March trade deficit drops by bigger-than-expected amount

'deal is off' as itulip says. we stop buying their goods, they stop buying our paper.

first we conned them into buying dot com stocks. then securitized crap. so what are going to sell them this time?

Hmmmm. Let's see. What's in surplus that could be flogged?
Houses in California? Nope.
Condo's in Florida? Nope.
Hummers almost anywhere? Nope.
More Citi stock certificates? Possibly [surprisingly enough].
Desperate Housewives box sets? Now we're talking...
Grain? Promising.
Fertilizer and farm equipment? Also promising.
Boeings? Not until they can actually complete 'em...damn.

[touchring]

Re: March trade deficit drops by bigger-than-expected amount

There are 2 parts to the equation for trade deficit.

There's still a huge construction boom going in in Asia, so exports might be rising, reducing deficit. The slowdown is in effect, but existing projects commited last year before the credit crisis will still go on and feed production for at least another 1 more year.

The big test imo will be H2 of 2009 and 2010.

[touchring]

Re: March trade deficit drops by bigger-than-expected amount

More Citi stock certificates? Possibly [surprisingly enough].

you bet, there are many crony governments that depends on the US to maintain power and they will be more than willing to buy citi stock certificates.

[c1ue]

Re: March trade deficit drops by bigger-than-expected amount

Touchring,

Look at the full release - one interesting item about this report was that exports FELL.

For the talking heads sake, this had better be a short term phenomenon or else it means that the increase in exports was just a short term spike due to Boeing getting a couple of large orders out.

In reality, what exactly can the US export more of?

The ethanol deal probably means less corn export, in turn affecting other foods (meats, processed materials).

There aren't the factories around to start replacing incoming imports of clothing, toys, etc with 'American made'; most of those physical plants are also physically located elsewhere.

Time will tell...

[FRED]

Re: March trade deficit drops by bigger-than-expected amount

Touchring,

Look at the full release - one interesting item about this report was that exports FELL.

For the talking heads sake, this had better be a short term phenomenon or else it means that the increase in exports was just a short term spike due to Boeing getting a couple of large orders out.

In reality, what exactly can the US export more of?

The ethanol deal probably means less corn export, in turn affecting other foods (meats, processed materials).

There aren't the factories around to start replacing incoming imports of clothing, toys, etc with 'American made'; most of those physical plants are also physically located elsewhere.

Time will tell...

Was watching US Trade Representative Susan C. Schwab on Charlie Rose lost night. She said the US imports a lot of low high gear, like apparel and toys, while the US compared to China exports an increasing amount of high tech gear. She said a week dollar is allowing the US to build on its strength as an exporter of high value products and services.

So we went to check the data and here's what we found from WTO reports.

Maybe we import tons of toys and clothes by unit volume but not dollar volume.

How about China's high tech exports versus the US?

Office and telco equipment exports for the US (hard to read, it's the green line on the chart) were in 2006 up to 19% to $135B from $110B since we started to debase the bonar in earnest in 2002 but are still down from the $150B level from 2000. In inflation adjusted terms, dollar volume is way down. Meanwhile, China's office and telco equipment exports are up from $75B in 2002 to $275B in 2006, a 270% gain.

Dollar depreciation sure is working wonders on the US economy to "build on our strengths."

[jk]

Re: March trade deficit drops by bigger-than-expected amount

the trade balance always improves during recessions as u.s. purchase of imports slows.

[GRG55]

Re: March trade deficit drops by bigger-than-expected amount

Was watching US Trade Representative Susan C. Schwab on Charlie Rose lost night. She said the US imports a lot of low high gear, like apparel and toys, while the US compared to China exports an increasing amount of high tech gear. She said a week dollar is allowing the US to build on its strength as an exporter of high value products and services.

So we went to check the data and here's what we found from WTO reports.

Maybe we import tons of toys and clothes by unit volume but not dollar volume.

How about China's high tech exports versus the US?

Office and telco equipment exports for the US (hard to read, it's the green line on the chart) were in 2006 up to 19% to $135B from $110B since we started to debase the bonar in earnest in 2002 but are still down from the $150B level from 2000. In inflation adjusted terms, dollar volume is way down. Meanwhile, China's office and telco equipment exports are up from $75B in 2002 to $275B in 2006, a 270% gain.

Dollar depreciation sure is working wonders on the US economy to "build on our strengths."

You're measuring the wrong export stuff. The sophisticated, high-tech stuff that the USA exported was so complex that even the people that invented it can't figure out how it works. CDOs, CDO squared, CDO cubed, ABCDSs... :rolleyes:

[touchring]

Re: March trade deficit drops by bigger-than-expected amount

Touchring,

Look at the full release - one interesting item about this report was that exports FELL.

For the talking heads sake, this had better be a short term phenomenon or else it means that the increase in exports was just a short term spike due to Boeing getting a couple of large orders out.

In reality, what exactly can the US export more of?

The ethanol deal probably means less corn export, in turn affecting other foods (meats, processed materials).

Weapons?

In my opinion, the trade relationship between the US and China is quite complex. The US is not just competing with China, but also with Germany, France and Japan in many areas like automobile, weaponary and industrial electronics. Most companies source some of their parts from China and whichever company that doesn't will lose out in terms of pricing.

For the US to boost its exports, it must first prove that it can make better cars, better industrial machinery than the Germans and Japanese. However, the free money policy in the US makes it more worthwhile to work in the service sector especially in banking and law, than say engineering or R&D.

It's fun and very lucrative grabbing wads of cash that Ben is throwing out of the helicopter. But over the long term, the country loses its competitiveness, which is what is happening right now. It is also fun buying goods from China and Japan using free money, but over the long term, the country loses its competitiveness.

Like Paulson, you may say that the exporting country can't get out of the free money which it received, but even if the free money were worth nothing, the exporter gains skillset and competitiveness.

I liken a lax monetary policy to crack. You want more of it once you taste it. You gain pleasure from consuming crack and you get addicted. But too much of it becomes poison, and you can't stop consuming crack because it is addictive.

[c1ue]

Re: March trade deficit drops by bigger-than-expected amount

Touchring,

What you say about monetary policy is true.

However, you should extend that consideration further out.

Those nations using cheap labor to power a mercantile trade policy are equally dependent on the US bad monetary policy.

The interesting part is - should the world economy truly slow due to the US' economic policy dilemma, the mechanics of trade will accelerate the decline of industry here in the US. Why? Because only those industries with the high end potential have stayed in the US. Everything else has gone elsewhere, but a decline in world economy will also disproportionately affect high end consumption.

As Fred noted, China is exporting increasing amounts of electronics and other supposedly American 'hi tech' goods. Huawei, China Putian, and any of a dozen other effectively state subsidized electronics and machinery companies are reaching further and further out into the world.

Of the top 100 companies in China, nearly 1 in 5 (19) are telecom, computers, or home appliances - and this is 2004 data.

http://www.encyclopedia.com/doc/1G1-138535089.html

[touchring]

Re: March trade deficit drops by bigger-than-expected amount

Those nations using cheap labor to power a mercantile trade policy are equally dependent on the US bad monetary policy.

The interesting part is - should the world economy truly slow due to the US' economic policy dilemma, the mechanics of trade will accelerate the decline of industry here in the US. Why? Because only those industries with the high end potential have stayed in the US. Everything else has gone elsewhere, but a decline in world economy will also disproportionately affect high end consumption.

I previously mentioned that China will do slightly better than developed countries in a slowdown as it manufacturers cheap and low end stuff - which i include $100-$200 cellphones.

A slowdown will in fact accelerate outsourcing to China as companies care less about ip protection and strategic planning in tough times. This is true to not just US companies, but also Japanese and German companies.

Some American companies had been slower than their Japanese and Taiwanese competitors in outsourcing to China (naturally due to language, nationalistic reasons, ip concerns, and laws forbidding exports of some hi-tech processes), and so might have caused the lost of competitive advantages, e.g. Motorola, IBM, Palm. For these cases, not only are American jobs not protected, the business and branding is lost as well.

[GRG55]

Re: March trade deficit drops by bigger-than-expected amount

link



Ok, boys and girls, right on schedule. Watch T's drop and their yields rise.

And here's the follow up. Recession? What recession?

And let's all repeat after Chairman Bernanke..."Inflation expectations remain well anchored"

GDP growth revised higher, jobless claims up

Thu May 29, 2008 9:45am EDT
By David Lawder
WASHINGTON (Reuters)- The U.S. economy grew at a revised 0.9 percent annual rate in the first quarter, slightly better than previously thought because of lower demand for foreign goods and services and a pickup in non-residential building, the Commerce Department said on Thursday.

The department estimated a month ago that gross domestic product, which measures the total output of goods and services within U.S. borders, grew at a 0.6 percent rate. But it raised the growth estimate to take into account updated economic and trade data...
http://www.reuters.com/article/ousiv...43282420080529