It now looks like the perceived economic growth of the last few years was not from the tax cuts for the wealthy, but from the FED's massive over stimulus after the dotcom meltdown in 2003-2005. Now that the punch bowl has been taken away; let the party end and the hang over begin.
Here is a summary of the great economic news today:
Homebuilder with a significant local presence (see City in the Hills) reported horrible numbers after the market closed. Hovnanian reported a significant loss this quarter and expects more losses in the quarters ahead. I have a feeling all that land they gobbled in the boom will turn out to be a very bad idea. From CBSMarketwatch.com:
1st qtr GDP came in a sad .6%. From CBS Marketwatch.com:
Hovnanian Enterprises reported a fiscal second-quarter net loss of $28.1 million late Thursday. The homebuilder's Chief Executive Ara Hovnanian said the housing market has continued to slip further.
"The housing market has continued to slip further in many locations in terms of both sales pace and sales prices," Ara Hovnanian said in a statement. "The housing market weakened in the latter part of the second quarter and the slower conditions have continued into May."
He also said the company won't give earnings forecasts anymore because housing market conditions have become increasingly uncertain.
Dell to slash 8,800 jobs:
Bulls and bears both agree U.S. growth was pathetic in the first quarter, rising at only a 0.6% annualized pace, the slowest growth in four years.
Dell Inc. on Thursday reported a slight drop in quarterly earnings and said it would slash 10% of its workforce, or about 8,800 jobs, in an attempt to cut costs and regain market share lost to the likes of rival Hewlett-Packard Co.