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Was A Double Dip Recession Really Hard To See Coming? Is It A Double Dip Or A Large Serving Of A Single Recession?
We now have the media and well known economists pondering, if not joining the consensus, that we are entering a double dip recession. I believe they are all wrong. From a practical standpoint, the previous recession was never completed, and I have stated this several times over through BoomBustBlog...
- July 2010: IMF Chief Sees Little Risk of Double Dip, but then again, he never saw the first dip coming, or any dip before that as well.
- December 2010: As Clearly Forecasted On BoomBustBlog, Housing Prices Commence Their Downward Price Movement In Search Of Equilibrium Scraping Depression Levels
- February 2011: The Coming Interest Rate Volatility, Sovereign Contagion, Geo-political Unrest & Double-Dip Recessions: Here’s The Answer To Valuing Global Real Estate Through This Mess.
As a matter of fact, I parsed the semantics with the esteemed Nouriel Roubini at a party in his home last may, reference The "American Realist" Says: Past as Prologue - Re-blown Bubble to Pop Before the Previous Bubble Finishes Popping!!!! Wednesday, 18 May 2011
In the Q&A he had with his clients, the topic of double dip recessions came up. In a nutshell, he felt that there was a possibility, but not assurance of a double dip. Let me add that I have an awful lot of respect for Nouriel. Outside of calling the housing crash accurately (as did I), he speaks his mind openly and does not mince his words. Coming from and independent guy such as myself, that trait is worth more than its weight in gold (that means worth more than 1,700 per troiy ounce, and counting). 
But after that comment, being the brash ass that I am, I interjected with the opinion that what was being labeled as a double dip was already a forgone conclusion, and in reality it wasn't a double dip at all, but really a continuation of the previous recession that was broken up by massive bubble blowing on a global scale. Nouriel countered that the difference between a double dip and what I espoused was a matter of semantics.
I respectfully disagreed with the esteemed doctor, for you see the difference is the economic sustainability of the alleged progress. If this was truly a double dip, then the economy actually grew, then stuttered. That's materially and significantly more positive than an economy which dramatically shrunk and then was literally pushed upwards by stimulus, and only stimulus, just to fall back IMMEDIATELY after said stimulus was ever so slightly slackened. What this means is that the economy was perpetually in free fall, and that fall was simply lessened by said stimulus. A stark difference from an economy that actually started growing on its own then petered out.
It has been my contention the Fed has spent a $1 for every $0.60 cents of recovery. Unsustainable! Unwise!
As detailed in "Who is Reggie Middleton!!!", my empirical approach allowed me to see the housing crash, CRE crash, collapse of GGP, Bear Stearns, Lehman, WaMu, Countrywide, municipal finances, regional banks, monoline insurers, the pan-European sovereign debt crisis as well as a whole host of other valuation faux pas, considerably ahead of sell side Wall Street, ratings agencies, most independent shops and the financial media.
I fear many may dismiss my viewpoints simply because they may have a bearish tinge to them. Trust me, I am not a pessimist. As a matter of fact, my actions throughout the first half of the first decade of the new millennium would have led many to believe that I was the ultimate real estate bull. Alas, it was not optimism, it was realism, just as what may appear to be pessimism now is nought but realism. To discount realism as pessimism, from a historical perspective, may not be wise. Every since 2006, my views on the asset and credit bubble bursting have been quite contrarian and thought of as pessimistic. All one had to do was fast-forward a year or two and realism easily replaces the term pessimism. Go to the 11:00 mark in this video from the Dutch Station/show VPRO Tegenlicht and listen for at least 45 seconds. It pretty much tells the tale...
Another viewpoint from March 2011: Do Black Swans Really Matter? Not As Much as the Circle of Life, The Circle Purposely Disrupted By Multiple Central Banks Worldwide!!!
I have always been of the contention that the 2008 market crash was cut short by the global machinations of a cadre of central bankers intent on somehow rewriting the rules of economics, investment physics and global finance. They became the buyers of last resort, then consequently the buyers of only resort while at the same time flooding the world with liquidity and guarantees. These central bankers and the countries they allegedly strive to serve took on the debt and nigh worthless assets of the private sector who threw prudence through the window during the "Peak" phase of the circle of economic life, and engaged in rampant speculation. Click to enlarge to print quality...
The result of this "Great Global Macro Experiment" is a market crash that never completed. BoomBustBlog subscribers should reference 
The Inevitability of Another Bank Crisis while non-subscribers should see Is Another Banking Crisis Inevitable? as well as The True Cause Of The 2008 Market Crash Looks Like Its About To Rear Its Ugly Head Again, With A Vengeance.
All four corners of the globe are currently "hobbling along on one leg", under the pretense of a "global recovery".
Simply sit back and look at the (supposed, none of these should truly be considered surprises) Black Swan Catalysts that we now face:
- US Housing, you know, the the thing that kicked this all of to begin with - The True Cause Of The 2008 Market Crash Looks Like Its About To Rear Its Ugly Head Again, With A Vengeance Friday, March 11th, 2011
- US and/or European Commercial Real Estate - Reggie Middleton ON CNBC’s Fast Money Discussing Hopium in Real Estate Friday, February 25th, 2011
- MENA, the Middle East & North Africa - Egypt’s Social Unrest As A Pan-European Economic and Financial Contagion? It Can Happen!!! Friday, January 28th, 2011 or First Tunisia, Then Egypt, Now Yemen: Will This Reach The Powder Keg That Is The EU & What Will Happen If It Does? Wednesday, February 2nd, 2011
- Japan - Can Contagion Be Avoided Considering The Magnitude Of Japan’s Woes? Tuesday, March 15th, 201
The list can go on.
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Good pic, Reggie!
Who brought the nice lady along, Nouriel or you :-)
Someone on Bloomberg yesterday mentioned that the U.S. is now in year 6 of their first lost decade. The problems will only grow worse until we get some real leadership that will admit the true nature of the problem and develop policies that will deal with our problems.
Reggie you are on the money as usual. I downloaded your cycle of life chart as I think it is a great graphical reminder of what we can expect going forward.
How do you feel about a new and improved Glass-Stegall bill?
It may be that about 50% of the labor force works for small business (or used to). I think with off book small business, it is much higher. There is no loan money for small business. No money on the street for the guy that hires half of America. Big companies are cash fat. Banks can borrow more money than is in the World cause the presses can create more and more.
IF Obama would fund the SBA small business guys like he does the Banks and other Countries, we could have at least some recovery. Without the small business being able to function, which requires cash, we continue toward badder and worser.
Point two, the left has been concerned about all the starving children of the World. The present policy is designed to solve at least some of the problem by starving to death many of them thru higher food prices and less food.
DEATH and DESTRUCTION
CHANGE, VOTE
Makes me feel better most of my friends call me a nut for stating we never left. I think after work I will call them up and tell them to come to ZH and read this. Oh wait most of my friends do not know how to turn on a Computer hehe.
See that dark cloud looming on the horizon? Well, its not really a cloud, it's a huge flock of Black Swans.
It's a depression in progress, disguised in the early stages as a double recession by an intervention of the financial elite trying to protect themselves at everyone else's expense from the inevitable.
Recessions, cyclical can occur within one secular Depression which is not an economic cycle but when the entire political and financial system runs backwards. Or the ponzi mechanics fail
We can argue tire selection or suspension settings all day, but when the engine has blown a head gasket, the points are all moot.
The core fundamental engine of our economy is VERY weak right now. This is a big reason why stimulus/liquidity injections will not work. We need to rebuild our infrastructure, and it starts by bringing businesses and manufacturing back into the USA from offshore, and that starts with a tax system overhaul. Even the corrupt clowns in Russia figured that one out. 13% Flat Tax, done.
screw that, those multinationals that left, kick em the rest of the way out with a message to never come back and ban all imports of their shit. same people that run the banks run them as well. be done with them all and starve that fckn beast.
The one thing I have learned succinctly, is what an absolute load of crap all these government statistics are. I always took it for granted that they were slanted. But it has become blatantly obvious that we are talking about propaganda tools.
No wonder the people behind them have no idea what securities fraud is.
Is that Nouriel Roubini with the rosy cheeks and glassy eyes?
Ya know Reggie, unless we are increasing value and value is created through labor then we are in a recession. So, we have been in a recession for a VERY, VERY long time. Selling out the country's balance sheet and the people's ability to be productive and support themselves does not increase value. It decreases value.
It does not matter what the phoney Fed or government numbers say. GDP is a wrong headed measurement because it is designed by the crooks and frauds and sold by the propagandists to enslave the nation with bullshit.
How can a country have 70% of its GDP in consumption? The fact is that it cannot. Buying a product from China, marking it up in fiat dollar terms and selling it does not contribute value (so it cannot contribute to GDP). Charging interest, borrowing money and then paying it out to government employees does not contribute to GDP. Why? Because the last word in GDP is "product", which implies something is made though labor... and changing the way it is calculated and the way it is calculated to suit the political and power ambitions of a nonproductive parasite class does not make it true.
Similarly changing the way unemployment is calculated to suit the politcial and power ambitions of the nonproductive parasite class does not change the number of people unemployed and changing the way that inflation is calculated does not change the increase in how much things cost... and that transitory language is total bullshit.
I can only think that the parasite class feels that they must both weaken (enslave) the productive classes and undermine the country's infrstructure before they destroy the country completely. There is no other logical conclusion.... and it is not only Obama and the bankers, but everyone at the top of the financial and political heirarchy are contributing to that destruction.
Big changes ahead.
It depends. Members of the ruling class got bailed out, free pomo bucks, tax largesse, courtesy of the politicians. The serfs, those people largely responsiible for paying back the tax largesse stolen by the ruling class- are on food stamps. Forty five million of them.
Hard to imagine one group of folks seeing the glass half full- the other half empty. But that is precisely the experience they have engineered.
May every incumbent politician get bounced out of office this year.
Hard to imagine one group of folks seeing the glass half full- the other half empty. But that is precisely the experience they have engineered.
Speaking of engineering... maybe the glass is just to large...?
Right, it's always good to have a bullish eye. Theres always a bull market somewhere