Why is U.S. economu so large?

Question

Why is U.S. economu so large?

Answer 1

Because they are the most advanced nation in the world. Advanced nations have more advanced economies. The large population and amount of foreign investors plays a big role too.

Answer 2

What's an economu?

ECONOMY?    Americans work, the rest of the world pretends to work.

Answer 3

exactly (mike g) we reach high points in technology

and what does the rest of the world do we never hear of them

Answer 4

Credit Crunch May Be Easing But The Recession Is Only Beginning

SUSIE GHARIB: The head of JPMorgan Chase says the credit crunch is almost over, but Chief Executive Jamie Dimon said a U.S. recession is just starting. Dimon believes there's a one in three chance the recession will be as bad as the economic downturn of the early 1980s. He made the comments at a UBS investor conference in New York City today. He also said his firm's takeover of Bear Stearns is quote, proceeding well and will eventually add as much as a billion dollars a year to JPMorgan's earnings. But Dimon warned integrating Bear's asset management and brokerage businesses will reduce earnings through next year.

2nd Quarter Low Profits But High Expectations

SUSIE GHARIB: And speaking of earnings, corporate America is wrapping up its latest quarterly earnings season. Although the results were dismal, analysts are optimistic about the outlook from here. Erika Miller explains why.

ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: For Wall Street, it is good riddance to first quarter earnings season. Ninety percent of the S&P 500 have reported and the results are not pretty. Profits are running 17 percent below last year, far worse than the 4 percent decline analysts were expecting at the start of the quarter. Earnings expert Mike Thompson says financials were the major drag.

MICHAEL THOMPSON, DIRECTOR OF RESEARCH, THOMSON REUTERS: You have the financials again, continuing to have a real negative impact, down almost 80 percent for the quarter. Expectations were it wasn't going to be that bad. The only good news is it was better than last quarter, the fourth quarter, where it was down over 125 percent.

MILLER: But there are a few positives buried in the data. Excluding the financial sector, profits are up more than 7 percent. On top of that, 62 percent of S&P 500 companies are beating estimates, which is in line with the historic average. The big question is the outlook for earnings in coming quarters and on that front, corporate America doesn't appear to have much visibility.

THOMPSON: I think the corporations are really having challenges, because we seem to be at this inflection point whereas either the economy and their businesses are going to kind of fall off even further or we're bottoming out and perhaps we've seen the worst.

MILLER: For now, Wall Street analysts are predicting earnings will drop 6 percent in the second quarter, gain 14 percent in the third and rise 62 percent in the fourth. Stephen Wood, portfolio strategist at Russell Investments, thinks that second half outlook is optimistic, but he still thinks now is a good time to buy U.S. stocks.

STEPHEN WOOD, SR. PORTFOLIO STRATEGIST, RUSSELL INVESTMENTS: I think we're probably looking at an end of third quarter, beginning of fourth quarter phenomenon, before you see the economic and the earnings news improve dramatically which means the stock market moving now is a reasonable expectation, you know, nine months ahead of time.

MILLER: With earnings season basically over, investors are turning their attention back to economic data. The big fear is that consumer spending could slow sharply, hurting the U.S. economy and corporate profits. Erika Miller, NIGHTLY BUSINESS REPORT, New York.

One on One with Alan Skrainka, Chief Market Strategist at Edward Jones

SUSIE GHARIB: Our guest tonight says the U.S. stock market is already in a recovery phase. Joining us now to explain, Alan Skrainka, chief market strategist at Edward Jones. Hi Alan, nice to see you again.

ALAN SKRAINKA, CHIEF MARKET STRATEGIST, EDWARD JONES: Hi, Susie.

GHARIB: Let's start by getting a better analysis from you and explanation. What do you mean by recovery phase in the stock market?

SKRAINKA: Well, you know, Susie, the market leads the economy. It's not the other way around. So while we're looking at bad news in the economy today, I believe the market is starting to anticipate better news in the economy down the road. Six to nine months it's likely that the recession is going to be behind us. It's likely the credit crisis is going to be behind us. And the market is up a thousand points off the bottom. That tells us that the market sees better news ahead.

GHARIB: You heard at the start of the program Jamie Dimon of JPMorgan Chase predicting a tough recession going forward. Let's say that that prediction, that forecast is correct. How would you revise your forecast for the markets?

SKRAINKA: Well, we wouldn't revise it. You know, if you look at the last 11 recessions, on average they last about 10 months. So let's say this one started in January; that would mean it is over in October. And typically the market bottoms out about five and a half months into that recession. So that would be mean the month of May which is of course this month. See the market does reflect a lot of the bad news with financials down 38 percent, consumer stocks down 26 percent and now it's starting to rally anticipation of the fact that the economy is likely to look better next year.

GHARIB: What about earnings? Let's talk about that. Again, a lot of companies in corporate America have been warning that the upcoming quarters are going to be rough quarters. We heard FedEx recently saying that its fourth quarter is going to be a tough quarter. That is a proxy for the economy. What is your reaction to that? I mean won't those earnings weigh down on stocks?

SKRAINKA: Well, of course the first quarter was tough for financial companies. It was better for other companies. It is going to be a little bit of a rough second quarter. But the second quarter is almost over. I think the market is starting to look forward to maybe the fourth quarter of this year and the first quarter of next year and sees a pretty good earnings recovery. Keep in mind the rest of the economy has performed remarkably well in spite of these dual hits from real estate and higher oil prices.

GHARIB: And yet we are still seeing a lot of volatility in the markets. We're seeing a lot of cash on the sidelines. What do you think it's going to take for investors to feel comfortable about putting new money into the markets?

SKRAINKA: Well, ultimately it will be better economic news but the fact that there is so much cash on the sidelines is bullish. This is the second large -- the highest peak in terms of the money market assets as a ratio of stock market value telling us that there is a lot of fear in the market. It is also only the third time in the last 20 years when Americans have been net sellers of U.S. stock mutual funds. The previous two times were great buying opportunities for long-term investors.

GHARIB: All right, so let's say that there is an investor who wants to put new money into the markets. What would you recommend? Where are the areas that will grow on the long-term basis?

SKRAINKA: Well, instead of trying to guess this sector versus that sector, the key is really to build good balance in the portfolio. Stick with quality stocks, bonds and mutual funds so that if the recession is worse than one might expect, your portfolio will hold up relatively well. Go easy on the international side because a lot of the performance has been due to weakness in the dollar. So have a healthy equity position, good diversification, good quality and then be patient because we'll get through this problem. We always do.

GHARIB: So do you want to name two, three stocks that are on the top of your buying list right now that you are telling your clients to add to their portfolio?

SKRAINKA: Well, of course most folks should stick with professionally managed money. But if you're going to build your own stock portfolio, consider dividend paying stocks that have good, healthy businesses overseas. Companies like 3M, Procter & Gamble, Cisco, I would also suggest an American Express looks attractive with all the worries about consumer spending.

GHARIB: All right, do you own any of these stocks or do you have any other disclosures to tell us about?

SKRAINKA: No, not at all.

GHARIB: All right, Alan thank you so much for coming on our program.

SKRAINKA: Thanks, Susie.

GHARIB: My guest tonight, Alan Skrainka, chief market strategist at Edward Jones.

"Get Your Finances Ready for Retirement"-Retirement Choices

SUSIE GHARIB: Millions of baby boomers are getting ready for retirement. They'll have a lot of decisions to make, a lot of choices and a lot of options. So we have a lot of answers. Tonight NIGHTLY BUSINESS REPORT begins a year-long effort called "Get Your Finances Ready for Retirement." We've partnered with U.S. News & World Report on a series of stories and special programs aimed at getting you ready for retirement. Tonight we start with a look at what type of retirement you want to have and its impact on your finances.

CONNIE HICKS, NIGHTLY BUSINESS REPORT CORRESPONDENT: For millions of Americans, this is the dream of an ideal retirement: stress-free living in a community that offers lots of sunshine and plenty of leisure activities. Hello, I'm Connie Hicks.

JOE COLLUM, NIGHTLY BUSINESS REPORT CORRESPONDENT: And I'm Joe Collum. Now golfing all day would be fine with me, but it may not be your idea of how you'd like to spend your retirement.

HICKS: And when it comes to thinking about your retirement finances, determining your retirement style is a good place to begin. Because no two people retire in the same way, financial planning for retirement is far from a one-size-fits-all matter.

COLLUM: For example, take Joal Fischer and Deborah Langsam of Charlotte, North Carolina. Leaving careers as a physician and a university instructor, the couple retired while still in their 50's. They're staying put in the same large hous