Albert Edwards: “Something Bad Happened In November"

Tyler Durden's picture

From SocGen's last standing realist, Albert Edwards, now that both Dylan Grice and James Montier have departed for the buyside.

“Something bad happened in November”……


...I have spotted the excellent Lakshman Achuthan of the Economic Cycle Research Institute (ECRI) doing the rounds reiterating his call that the US economy is already in a recession. He seems to be getting a bit of stick recently, but as I am fully aware, bearers of bad news are usually derided. I think he is doing an excellent job of explaining his stance patiently and clearly in the face of some very hostile interviewers. His recent 7 December analysis on the ECRI website of why a recession is likely to have started around four months ago is well worth an uncomfortable read - link (see also the related video link).


Certainly if the US has already slipped into recession, this would help explain why our preferred measure of whole economy profits declined, albeit marginally, in Q3. We have always monitored pre-tax, domestic, non-financial, whole economy profits particularly closely because this measure of the underlying profitability of the business sector is probably the best leading indicator of domestic business investment, and that has also been weak recently.


Many have attributed the weakness in investment to uncertainty about the fiscal cliff. But if underlying profits are under pressure, then so too will be investment. So although much of the S&P eps downgrading by analysts is being attributed to severe weakness abroad, what the latest whole economy profits data show is that the domestic business situation is also weak. The ECRI recession call should be listened to more closely.


Certainly the latest National Federation of Independent Business (NFIB) survey in November was entirely consistent with an economy already firmly back in outright recession. The headline optimism series plunged 5.6 points in November to 87.5, which the NFIB itself says is one of the lowest optimism readings in the survey's long 30 year history.


“Something bad happened in November…and it wasn’t merely Hurricane Sandy”, the NFIB chief economist Bill Dunkelberg is quoted as saying - see chart below and link. Even scarier than the decline in the headline measure was the 37% slump to an all-time low in those firms who believe economic conditions will improve over the next six months. That 37% drop is twice the previous record 18% decline, which occurred in the immediate aftermath of the Lehman’s collapse (see chart below). For those who might immediately retort that this is a sentiment indicator that should be used as a contrary indicator - you are wrong. It is a good leading or at worst coincident indicator. I would say this datum is more than consistent with the recession that Lakshman Achuthan of the ECRI has been warning of, wouldn't you?

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101 years and counting's picture

of course something bad happened.  the election was finally over and communism won a second term. 

Flakmeister's picture

Did you learn about communism from Bazooka Joe bubble gums comics?

Look up fascism and get back to us....

Everybodys All American's picture

All I know is that I've seen this before in other countries and it doesn't end well.

CPL's picture

First it starts in the Universities, once they are gone.  Then the media is rounded up, including the fart catchers that thought they were a "shoo-in".  Then the hospitals are taken over and doctors are killed one by one until someone jams a scapel in the hand of the Janitor, the only person walking the halls of the place.   Then it just gets worse from that point...


Bosnia...all those pleasant memories.  I understand it's still a shit hole.

EnslavethechildrenforBen's picture

Isn't it about time that Charlie Sheen is back in the news... or will it be anothe O.J.Simpson trial to keep the sheeple side tracked?

michiganmaven's picture

The mass shooting wasnt enough for you to be distracted?

DeadFred's picture

Sorry, shootings are getting too common to distract for long. Now all you get is comparative analysis of how the current tragedy stacks up to other incidents. The audience is getting jaded.

jerry_theking_lawler's picture

they why the stooped even lower....and went with kindergarten kids.....regular school/mall shootings weren't panning out.....

Spigot's picture

Gee! I wonder what happened in Novemeber to cause independent business to think the future was going to be multiple of times worse for them then the Lehman collapse? Ummm, well, Sandy would be a boone due to supplying the reconstruction effort. If anything that would have been a positive. (assumes thinker posture) hmmmm.... Oh! I think I've got it! A natural disaster can be dealt with by increasing business activity. But an UNNATURAL Disaster, such as the re-election of the fraud known as BH Obama, can't be healed by more and more business activity. The UNNATURAL DISASTER of Obama's second term MUST be (in the view of independent businesses) multiples of times worse impact than Lehman.

stacking12321's picture

zh just had an article on charlie sheen today:

oh, wait, that was a different oily sheen, my mistake...

Going Loco's picture

Places that descend to the status of shit hole rarely recover until many generations have passed and verdant greenery has replaced the works of man.

zerozulu's picture

America is filling the place left empty by Chinese communism and Russian socialism.

yrbmegr's picture

Do those other countries include China, who is expressly communist, and who is kicking our ass economically?

Steve in Greensboro's picture

Fascism is when the government takes over business.  Communism is when the government takes over everything.

john39's picture

not really, fascism is when the corporations take over government...  and create a totalitarian state.

LawsofPhysics's picture

Correct.  this guy is an idiot.  The fascists buy your "representation" in order to change laws making theft legal.  The totalitarian laws are put in place later for your "protection" in order to crush any uprising when it eventually becomes clear that a massive theft has occurred.  The GOP fell for it hook, line, and sinker by marginalizing Ron Paul and changing the rules at the convention so that these delegates and any voice for prosecuting the fraud was silenced.  Idots like this will get what they deserve.  Real conservatives should have gone apeshit when a 30-seond vote was "adopted" in order to silence these voices. Bread and circuses until the supply chains break, enjoy.

Seer's picture

No, I don't think that the GOP fell for anything.  They KNOW that this is how it's done if you want power.  Ron Paul should never be equated with the GOP.

REAL anyone doesn't play party politics, because... it's all NON-real.  One either DOES or one shuts the hell up.  We have WAY too much (meaningless) talking going on and not nearly enough action: politicians and talking-heads do NOTHING.

Jake88's picture

You're not paying attention. The GOP is as much a part of this fascist take over as the democrats. They marginalized Ron Paul precisely because of that. There is only one ruling party the CFR. Both parties answer to the CFR. The NDA act, a law put in place to crush any uprising, was passed by 95% of the Senate. Republicans and democrats alike passed an unconstitutional law that takes away your right to due process. 

Imminent Crucible's picture

Maybe the best way to say it is "Fascism is when corporations and the government are indistinguishable".

A Nanny Moose's picture

This notion implies that there is ever a distinction between them. The very idea of a corporation arises from legal fiction...government.

smacker's picture

Not really.

Mussolini took over the corporations, as did Hitler, and created "corporate states". They both had henchmen sitting on the boards to control and direct investment/production. And in the case of Musso I always thought he got the trains running on time, although I'm later assured that all he actually did was to get the Italian media to report that the trains were running on time. Musso is where one Mr Tony 'Teflon' Blair in the UK got his ideas from.

Dre4dwolf's picture

I was thinking we have something more in the lines of corporatism with a dictator in power who wants to destroy any potential for people to profit off the collapse of the society they engineered.

dogbreath's picture

so what are the leftwing socialists that rely on corporatism to extract taxes to  support their agenda

yrbmegr's picture

They're not relying on corporatism.  They're trying to separate corporations from government and tax those corporations.

dogbreath's picture

government is a corporation.  we just vote for the board of directors who once in office try to stay in office.  The Boards hands are tied by numerous contracts between the government corporation and other corporations with words like union, university, health and department of in their name amongst other words. 

smacker's picture

Actually, fascist governments don't usually take over businesses in the sense of stock ownership; that's what the commies do. Fascists usually exercise control via the regulatory system. To influence this process, big corps pay over $bribes$ to government (donations and others) to ensure favorable regulations. What you end up with is corrupt, crony capitalism and the citizen/consumer is always the loser. Best example of this is the banking industry today: Too Big To Fail -and- Too Big To Jail.

Canadian Dirtlump's picture

What is developing IMO is a defecationally enhanced new hybrid system. You have on the top end, a quasi fascist banana republic, letting crony corporations get away with murder through their puppets in the government.. BUT, on the low end you have socialism in the form of escalating hand outs which serve ostensibly as bribe money for hangers on, and the increasingly marginalized middle class to not riot.


I call this new system ROBO A.I.D.S. ism

Terminus C's picture

Historically Fascism was far right because the metric used to measure was flawed.  Then they tried the 'horseshoe' and it was still flawed but slightly better at describing political realities.  Currently we use an ideological grid like this one to describe political leanings.  This system is far more accurate at describing ideological reletivity than previous metrics.

Far right and far left were used to show the sheeple that we had the best system because it was 'balanced' between the extremes.  The United States of America is, and has been for some time, an increasingly fascist state.

TrumpXVI's picture


Fascism was originally defined by the Communists (IIRC, 1925 Commintern).  Anything to the right of communism was decried as being "far right".

Typical Leftist hyperbole.

Ghordius's picture

if you are talking about the "far right", perhaps

but fascism as a word & concept has older roots

here, the root is Fascio and the early use was more like "League of men"

smacker's picture

Fascinating. I've often thought something along those lines myself. Another possible explanation is that the Left were so guilt-ridden by what their German fascist comrades did in WW2 that they became determined to distance themselves from fascism as fast as possible. How better to do this than claim that fascism is on the "far right", thereby absolving themselves from any guilt, and also opening the door to reinventing themselves.....yet again.

Canucklehead's picture

Fascism is a 1930's nickname for big state socialism.  Fascism was created by Mussolini's use of the ancient fascii to market his new old order of Rome.

Today, many big state socialists proclaim they do "things" for the benefit of the people, or children, or what ever sound bite sounds good.  Sometimes they claim denying physcial objects such as gold or guns will improve your life.

smacker's picture

Yeah, I came across politicalcompass a few years ago and it's quite good. However, I found some of the criteria they use is slightly off and have moved over to a much more simple one myself:

I simply position people politically on where they sit on a scale between "100% - 0% government". 0% being zero government on the Right with a free market economy, absolute freedom and probably anarchy. 100% being totalitarian on the Left with big govt police states, where you have to sign a form in triplicate to go to the bathroom.

As we are seeing across the US/UK/EU, govts are becoming ever bigger and more totalitarian as each year passes.

Terminus C's picture


the link was more of an example of the grid concept rather than suggesting their quiz and measurements were right.


Umh's picture

I've thought for many years that only big entities ( Megacorporations ) can coexist with big government. Small businesses can't allocate such limited resources as they have to tracking what the government is doing and so for most of them planning is restricted to the owner.

proLiberty's picture

The article Positive & Negative Liberties in Three Dimensions ( is very helpful.

Fascism was the popular name for the National Socialsts in Germany.  Under that system, the farmer owns the cow and if the cow dies, he takes the loss (or maby gets a tax credit), but he is told what kind of feed to use, what market he can take the cow to and how many cous can can run on his land.  But, he owns the cow.  


autofixer's picture

Ummm...that has become the leftist education establishment definition of fascism.  Fascism is in fact a large government that is all controlling.  If you are to the right, libertarian or even anarchist, you are advocating for a small or non-existant state.  A small state cannot become totalitarian, that was the beauty of the American Revolution.  Fascism is private (crony) ownership, under a totalitarian state control.  Do not accept the leftist education establishments definition of the political-economy, they are trying to rewrite history.  Just think of the NAZIs (National Socialists) when considering fascism.  The NAZIs were large state, socialists.  They just believed that the German Volk were superior and their (national) will should be imposed upon the world through socialism.  JMHO

smacker's picture

Agreed. A very good summation methinks.

smacker's picture

"Historically, Fascism is a far-right movement."

Only insofar as the Left describe it. Fascism is a totalitarian system of government whereby every person must obey the state. Just like communism but without the state ownership of production crackpot-ery, although fascism continues to control production. Apart from that, you really couldn't get a fag paper between them; both are at the opposite end to free market capitalism, freedom and individualism.

Seer's picture


Chuck Walla's picture

Historically, Fascism is a far-right movement

Umm, what is it about the name "National Socialism" that you are missing Barack jr? NAZI is a stopping point in the continuum to communism. It is merely who owns the means of production. In NAZI theory, the state partners and guides. In Communism, the government owns it.



“Ideas are far more powerful than guns. We don't allow our enemies to have guns, why should we allow them to have ideas?”

 Joseph Stalin

SDShack's picture

Almost correct with your statement of who controls production. But the theory with Communism is that it is the workers (labor) that controls the business, not the managers. Communism was to be a workers paradise in theory. In reality, all workers were forced to join the Communist Party. Thus the party controlled the means of production, not the workers. Therefore in reality, Communism is no different than Fascism. All means of production is controlled by a single hierarchy in a symbiotic relation with government. In Communism, it is the single Communist Party. In Fascism, it is the nexus of elected government officials from two or more political parties bought and paid for by crony capitalists. The result is the same as with a Monarchy or Dictatorship. Totalitarian control by a few with the citizens as serfs.

smacker's picture

@Chuck Walla / SDShack: Thanks. That's spot on. Two of the most thoughtful and well articulated descriptons of how the fascist/commie slimeballs operate that I've read.

Stuck on Zero's picture

All "isms" are bad.  Fascism, communism, environmentalism, ...  They are all beliefs and not founded on truths. They demand unquestioning obedience by the "ists" and don't allow debate.



JimBowie1958's picture

libertarianism, or populism or capitalism or moralism, etc.

'ism' is just a postfix that could mean anything.

The problem i have with 'isms' is that they are generally systems of thought intended to replace actual analysis and thought of specific situations deduced from a prejudged general set of inductive conclusions.

That is fundamentally irrational without a huge data sampling.