GDP up 3.2% in Q1

This was definitely an interesting report. In general, the country might have some reason to be optimistic, as Personal Consumption Expenditures (PCE), the largest component of GDP, was up 3.6% in Q1. On the other side of the story, Residential Fixed Investment (RI) got completely obliterated, down 10.9%. One has to wonder what the stagnation in the housing and job markets will ultimately mean for the country going forward. So far it seems, Americans will be Americans, that is they'll continue to forego fiscal responsibility and savings in favor of present day consumption. The savings rate declined in the quarter, contributing positively to that nice looking PCE number. Change in private inventories were up 1.7% contributing positively to the headline number, and non-residential fixed investment was up 4.1%, implying that businesses are making investments in capex which, at least in theory, implies they expect future opportunities and returns. Increasing opportunities for businesses point to an increase in jobs and eventually higher wages, which will spur consumption even higher, though I'm still weary of that savings rate.

I've said this before and I'll say it again, but at some point, family households will have to come to terms with their situations and begin to repair their balance sheets. At this time one would expect the savings rate to go up, and consumption to go down but I'm definitely leaving the door open to other possibilities. I wouldn't short U.S. market indices, and for now I don't think I'd short U.S. treasuries either. It's still the safest investment around. The Greek mess helped bring down the yield on 10-y to 3.67 yesterday, down from about 3.9 two weeks ago. It's easy to worry about America's debt and possible inflation, but don't lose site of this trend: When a negative exogenous economic shock happens somewhere in the world, U.S. t-bills benefit. It's the same flight to quality we've seen for decades now, and I don't expect it to end any time soon.

I Like Writing, Think I'll Keep Doing It.

I read an enlightening article yesterday in the New York Times about the Obama 20-somethings. It was more or less about the everyday lives of some of the President's top aids, and how they handle the pressures of working in the White House, and balance those pressures with some shred of a personal life.

For me, the article was cool because it brought some of these ultra-high-powered individuals down to earth and showed that they are, for the most part, real people. More than anything, it kind of made me reflect on my life and the people I associate with. I definitely enjoy the college life and enjoy my friends, but most of them aren't exactly "type-A" personalities. The article depicted a dynamic environment in which a congregation of highly motivated and intelligent individuals work together tirelessly to achieve a greater end. At some point, I want to be in such an environment, and I want to know such people. Hopefully that doesn't mean I have to go into politics... I think a career in finance should suffice. Any employers out there?! Read me! Hire me! Please lord! I'm begging to come in and work really hard! I just want to put my knowledge to good use!

Wow, that looks a bit desperate, nobody reads this... Maybe I'll start linking things I post about economics to my facebook page for all of my non-interested friends to read... Ha ha.