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Does This Look Like A Recovery?

Tyler Durden's picture





 

Via Simon Black of Sovereign Man Blog,

A few years ago back when I used to watch an occasional bit of television, I would always have an internal debate with myself: which was more funny– Comedy Central, or CNBC?

It was always a toss-up. One channel has talking puppets. The other has Steven Colbert. Both are satires of our bizarre reality.

These days it seems financial media has surged ahead in this contest, rolling out one expert guest after another to beat a steady drum that economic recovery has settled on terra firma.

Now, I’m an optimistic guy... and there are plenty of good news stories around the world. But just looking at the numbers, it’s clear that there is a major disconnect between sentiment and reality.

On one hand, western governments and mainstream media sources tell people that their economies are recovering and moving forward. Sentiment is high, confidence is growing.

Unfortunately the data show a completely different story:

1. In the US, while the official unemployment rate is falling, a much better indication of the labor market is the Labor Force Participation Rate– the percentage of people within a society who are engaged in the work force.

 

It rose steadily for decades after World War II as more and more women entered the work force, peaking in the late 1990s/early 2000s. It has been in terminal decline for the past ten years, having now reached the same level as from the late 1970s.

 

labor force participation Does this look like a picture of recovery?

 

Mirroring this point is private sector data from Automatic Data Processing, the largest payroll services firm in the world. ADP regularly releases its own employment data– they are, after all, the ones who send out the paychecks...

 

According to ADP data, the number of people employed in the United States today (111 million) is roughly the same as in 2001. Yet back then, there were about 285 million people in the US. Today there are 315 million people.

 

So the conclusion is that there has been no growth in the number of jobs, far more people in the country, and far fewer of them ‘participating’ in the work force. This can hardly be called progress.

 

2. We’re also told that consumer spending is coming back. The US Commerce Department has reported that spending edged higher for the last several months, giving rise to even more optimism.

 

This may be true. However the other side to this story is that (a) US wages as a percentage of GDP are at a record low; and (b) consumer credit has been steadily rising since early 2011.

 

consumer credit Does this look like a picture of recovery?

 

 

So what we’re really seeing is US shoppers who are either unemployed or earning record low wages going deeper into debt to buy stuff. Somehow this is a source of optimism.

 

3. Since 2008, large US companies have been able to enjoy absurdly low interest rates, plus a very forgiving society when they lay off workers.

 

Clearly this combination of cheap capital, lower payroll expense, and consumers willing to indebt themselves to buy products is positive for corporate profits. But is it sustainable?

 

In the long run, are strong corporate profits underpinned by cheap funny money and bankrupt consumers? Or strong, vibrant, productive economies? I would suggest the latter.

This analysis isn’t intended to be negative; bear in mind, numbers don’t have feelings. Data is simply truth. But the gulf between truth and perception is now astoundingly vast. And there are dangerous consequences to this, just as we have seen in the recent past. Welcome to 2007 all over again.

 


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Thu, 01/17/2013 - 22:10 | Link to Comment FL_Conservative
FL_Conservative's picture

Having a job and being able to pay for your way is SO 20th century.  I mean really........

Thu, 01/17/2013 - 22:15 | Link to Comment SafelyGraze
SafelyGraze's picture

the good news from these charts is that, unlike in the past, people no longer need jobs in order buy things

Thu, 01/17/2013 - 22:24 | Link to Comment derek_vineyard
derek_vineyard's picture

Less people working = more with liesure time.  Since the gubermint is footing the bill.....looks like progress to me.

Thu, 01/17/2013 - 22:31 | Link to Comment Dr.
Dr.'s picture

Fig.1 is the Tranfer Fn of a LowPassFilter. Economy will continue on aslope at -20dB/2y ;-)

Thu, 01/17/2013 - 22:32 | Link to Comment Thomas
Thomas's picture

Remember the old maxim that "you cannot reflate a bubble." That was probably as wrong as any maxim over the ages. These dickweeds at the FOMC and affiliated central banks are working on a whole series. They think they will eventually get it just right--the perfect bubble that won't burst. You betcha.

Thu, 01/17/2013 - 22:48 | Link to Comment Dr.
Dr.'s picture

..you meant controlled burst. You make some the way up and a lot more down..

Fri, 01/18/2013 - 02:01 | Link to Comment knukles
knukles's picture

Nothing is funny or amusing anymore.
It is truly frightening.

 

The big laugh can no longer cover the rot of the big lie

Fri, 01/18/2013 - 02:12 | Link to Comment otto skorzeny
otto skorzeny's picture

americans love to be lied to and told that they will be safe forever-that is the job of the govt

Fri, 01/18/2013 - 08:22 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Naw, naw, naw.........I can't hear you.

 

I will tune to CNBC.....they will expose your vicious lies.

Thu, 01/17/2013 - 22:47 | Link to Comment nmewn
nmewn's picture

The damned world is upside down I tell ya...even the ObamaFawn Lady has gotten religion...

"She was a protester outside of a Romney rally that was held in Cleveland, Ohio, and she explained to a filmmaker on how President Obama gives all minorities free phones and that is the reason why they should vote for him and not vote for Mitt Romney."

"Dowry went on to say of how President Obama did not do what he said he would do for her neighborhood and to help them. She said after five years now, nothing has changed and her and husband are still in the same situation as they were before."

http://www.examiner.com/article/obama-phone-lady-obama-mislead-us

Insanity! ;-)

Thu, 01/17/2013 - 23:19 | Link to Comment A Lunatic
A Lunatic's picture

Obama must be rayciss............

Thu, 01/17/2013 - 23:33 | Link to Comment Freddie
Freddie's picture

These days it seems financial media has surged ahead in this contest, rolling out one expert guest after another to beat a steady drum that economic recovery has settled on terra firma.

F CNBC/BloomTurd, ALL of TV, All of Hollywood.  They are all the CIA's Operation Mockingbird.

http://en.wikipedia.org/wiki/Operation_Mockingbird

Endless lies and propaganda to the retards who watch TV and Hollywood's shit.  If you watch then you enabled your serfdom.

Thu, 01/17/2013 - 23:34 | Link to Comment ZeroAvatar
ZeroAvatar's picture

tOmBama doesn't give a snake's shedded skin about black people.

Thu, 01/17/2013 - 23:37 | Link to Comment Harbanger
Harbanger's picture

She would vote for him again in a second.  Democrats enjoy something 96% of the black vote and yet they have single handedly done more to destroy their families and communities than anyone.  Some Democrat districts had more votes than registered voters but that's another story.

Fri, 01/18/2013 - 02:05 | Link to Comment knukles
knukles's picture

96+% of the black vote.
Now tell me that's not racist, is humorous and should not be addressed for we must not make them mad at their own feelings.

To paraphrase Yeats; "There is no center left to hold."

Fri, 01/18/2013 - 02:11 | Link to Comment otto skorzeny
otto skorzeny's picture

they would have voted for fucking OJ

Fri, 01/18/2013 - 02:31 | Link to Comment MisterMousePotato
MisterMousePotato's picture

Or, if I might try my hand, "The center did not hold." (Which, I guess, makes sense in that his observation was that the center cannot hold. I guess he was right.)

Fri, 01/18/2013 - 10:49 | Link to Comment GeezerGeek
GeezerGeek's picture

Blacks can't be racists, by definition. Only Caucasians, and maybe Asians, can.

Thu, 01/17/2013 - 23:02 | Link to Comment fuu
fuu's picture

Filter sweep that thing with a VWAP and we got bass drops.

Fri, 01/18/2013 - 11:28 | Link to Comment Metalredneck
Metalredneck's picture

Time for a band pass.

Fri, 01/18/2013 - 10:12 | Link to Comment yogibear
yogibear's picture

With all the SSDI, welfare Cell phones, free rent you make out. You loose if you work.

Besides you have Bubble Bernanke and the Fed to buy-up all the debt with printed money.

It's like fantasy land but real.

Thu, 01/17/2013 - 23:45 | Link to Comment El Oregonian
El Oregonian's picture

Well, Polly Anna Bartiromo and her Rose-Colored glasses says everything is just fine...

Fri, 01/18/2013 - 02:13 | Link to Comment otto skorzeny
otto skorzeny's picture

if I hear "we're off the lows of the day" from her fat lips  one more time I'm gonna lose it

Thu, 01/17/2013 - 22:10 | Link to Comment Vampyroteuthis ...
Vampyroteuthis infernalis's picture

It is recovery of the wealthy US citizen's money. For the rest of us, tough luck.

Thu, 01/17/2013 - 22:11 | Link to Comment Dieselclam
Dieselclam's picture

It this "recovery" was in a hospital, it would already have a toe tag.

Thu, 01/17/2013 - 22:12 | Link to Comment ThePhysicist
ThePhysicist's picture

But, the talking heads say life is good, the recovery is rolling along.

Thu, 01/17/2013 - 22:13 | Link to Comment monopoly
monopoly's picture

And so it begins....Again.

Thu, 01/17/2013 - 22:14 | Link to Comment mayhem
mayhem's picture

so there is no spoon?

Sun, 01/20/2013 - 05:43 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

no spoon? From what the Mint is saying there isn't even any silver to make into spoons, that's how far this one's gone.

Thu, 01/17/2013 - 22:17 | Link to Comment fourchan
fourchan's picture

 

 

numbers no longer matter, the debt, mark to market, the market,

its all a ponzi bubble being pumped up by the fed, maybe it always was?

 

buy the fucking dip.

Thu, 01/17/2013 - 22:14 | Link to Comment q99x2
q99x2's picture

There is not enough assets in the economy to keep the banks from imploding since GDP is falling below 2%. The reality (ex Gov't statistics) is that banks are out of fuel for their ponzi, the implosion has started and will rapidly accelerate. The Ice-9 Cometh. 

Thu, 01/17/2013 - 22:24 | Link to Comment darteaus
darteaus's picture

A better stat, IMHO, would be total compensation paid by employers.

An ER doctor could now be a Starbucks barista, and, using the article's calculations, one job = one job.  Using reported income, while not perfect, would act as a proxy for the relative value consumers are indirectly willing to place on the relative value of the workforce's output.  So, an ER doctor's compensation would be higher than a Starbucks barista, signaling a greater value being produced.

Thu, 01/17/2013 - 22:42 | Link to Comment secret_sam
secret_sam's picture

Someone (Williams or Biderman or?) should try to get a clinical read on "take-home income" vs. "compensation paid" by employers. 

Fri, 01/18/2013 - 09:17 | Link to Comment Poetic injustice
Poetic injustice's picture

While barista could receive "3 week intensive training" and go work in a hospital as doctor for minimum wage, helping poor people.

Thu, 01/17/2013 - 22:26 | Link to Comment Falconsixone
Falconsixone's picture

51 months ago I paid the tax man and had a good job. Since then I've been Odd Job (since I can do anything) and can't see myself going to work again for the people who stole my life (I thought the field was level as a truthful fool does). So if they plan on me working for them you people should invest in whips (that won't work either). ie:fuck'em

They lost my ability (they don't care) and a shit load of taxes (I think they may care but they built the system). 

Fri, 01/18/2013 - 02:54 | Link to Comment SheHunter
SheHunter's picture

Well said Falcon.  Same here in my life.  And I second your fuck-'em.  Bit once shame on me...bit twice F'em.

Thu, 01/17/2013 - 22:28 | Link to Comment cnhedge2
cnhedge2's picture

right, it's not sustainable. http://www.cnhedge.com

Thu, 01/17/2013 - 22:31 | Link to Comment tooriskytoinvest
tooriskytoinvest's picture

We’re Now In The Eye Of The Perfect Storm: Europe’s Banking System Is Breaking Down Again,  APPLE Is Following An Ominous Path, China Trust Loans Jump Sevenfold, And Several Measures Of Market Sentiment Are Now Hitting Extremes

 http://investmentwatchblog.com/were-now-in-the-eye-of-the-perfect-storm-europes-banking-system-is-breaking-down-again-apple-is-following-an-ominous-path-china-trust-loans-jump-sevenfold-and-several-measures-o/

Thu, 01/17/2013 - 22:31 | Link to Comment IridiumRebel
IridiumRebel's picture

This economy is like the drunk that keeps showing up to AA meetings with vodka on the breathe.....swearing he has been straight and recovering while everyone isn't looking, slipping into the liquor store for another pint.

Sun, 01/20/2013 - 05:38 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

That was Yesterday.

Now the Bernank is handing out Vodka labeled "instant sobriety tonic" written in his handwriting in the AA meetings.

Thu, 01/17/2013 - 22:32 | Link to Comment earleflorida
earleflorida's picture

excellent resourcing of the 'grey matter', mr. black... in a BL$`world, that counts only the "Xs & Os"-- as that of an idiot`savant trolling his alphabet soup-bowl with a straining ladle!

Thu, 01/17/2013 - 22:36 | Link to Comment A Lunatic
A Lunatic's picture

A nation that is afraid to let it's people judge the truth and falsehood in a open market is a nation that is afraid of it's people.     -John F. Kennedy-

Thu, 01/17/2013 - 22:48 | Link to Comment AgAu_man
AgAu_man's picture

I liked JF Kennedy.  I still like the Kennedy's.  Especially the silver Kennedy's at home.

Whenever I look at them, they seem to ask me: "What can we do for you?".  One day I plan to answer them.

Fri, 01/18/2013 - 01:28 | Link to Comment Hangfire
Hangfire's picture

Yes, I like the Kennedy's and the Franklin's, I consider them my junk friends!   

Thu, 01/17/2013 - 22:55 | Link to Comment darteaus
darteaus's picture

It's a nation of politicians and banksters afraid of not being able to continue the grand rip-off.

Thu, 01/17/2013 - 23:47 | Link to Comment Freddie
Freddie's picture

Funny you mention JFK.  Talk about connections.  CIA Operation Mockingbird to lie to the sheep who watch TV and Hollywood's shit.  Including the endless lies on CNBC and BloomTURD.   Keep watching TV and Hollywood - they need sheep/serfs watching.

http://en.wikipedia.org/wiki/Operation_Mockingbird

In 1951, Allen W. Dulles persuaded Cord Meyer to join the CIA.  According to Deborah Davis, Meyer became Mockingbird's "principal operative"   Congressional hearings in 1976 proved the CIA had been paying off editors and reporters in most mainstream media outlets.

So who was Cord Meyer?  Well JFK was sleeping with his wife.  Probably a big mistake there. 

http://en.wikipedia.org/wiki/Mary_Pinchot_Meyer

Big mistake by JFK and Mrs. Cord Meyer.  The Kennedys had a real talent for getting into bed with gangsters and lowlifes plus the wives of powerful people and starlets.   People then ended up dead.  Like Marilyn would had a drug & booze problems, low self esteem and a big mouth.  

http://www.thegeorgetowndish.com/thedish/mary-pinchot-meyer-murder-georgetown-towpath

 

Fri, 01/18/2013 - 00:10 | Link to Comment willwork4food
willwork4food's picture

Yes, but that "mouth", sure helped to advance her carreer..

Thu, 01/17/2013 - 22:37 | Link to Comment Seasmoke
Seasmoke's picture

I always was afraid of not working. Never has there been a better time in history not to work.

Thu, 01/17/2013 - 22:51 | Link to Comment AgAu_man
AgAu_man's picture

Indeed.  I hear that even as far back as the days of the Pharaohs, there was plenty of work.  Especially in those days, and in the days of many a monarch.

Fri, 01/18/2013 - 00:25 | Link to Comment Harbanger
Harbanger's picture

According to the Dems , you're only doing your part to help the economy.

"Unemployment checks is the fastest way to stimulate the economy"- Pelosi.

Thu, 01/17/2013 - 22:38 | Link to Comment secret_sam
secret_sam's picture

Fewer people working is a GOOD thing if they're old folks who make *adequate* monthly income for stayin' home.  Maybe some young fucker without that income stream can claw itself into a job as a Walmart greeter, a grocery cashier, or a wait at a diner.

Is your interaction with the older "service sector" careerists more or less satisfying than average?

Thu, 01/17/2013 - 22:39 | Link to Comment AccreditedEYE
AccreditedEYE's picture

LMAO!! Just buy the dip... these fools don't give a rats ass about "employment" or "recovery". NOBODY cares. Buy the dip and help end this f-ing nightmare. 

Thu, 01/17/2013 - 22:40 | Link to Comment Ungaro
Ungaro's picture

"With recoveries like this, who needs a recession?" -- Art Cashin

Thu, 01/17/2013 - 22:52 | Link to Comment NoDebt
NoDebt's picture

I think BLS statistics (manipulation and all) tell roughly the same tale as ADP.  Last time I checked BLS said there were about 132MM employed in the US.  About the same number as in 1999.  And again, that's with a larger population which is what drives the Labor Force Participation rate down.  And they're earning less to boot.

And this is as good as it gets even with the "stimulus" of 8-9% of GDP federal deficits.  Subtract out 2% growth from that number and you get 6% of our GDP being pulled from the future by printing or borrowing.

The whole damned recession of 08-09 was only a 5.2% GDP contraction from peak to trough.  Wanna go for a 6-plus-percenter?  Cause it's coming, like it or not, no matter how much the Fed prints.

What's different this time from 1979 is that there were OPTIONS then.  When you're not already sunk up to your eyeballs in debt you always have more options than you do when you're already over 100% and climbing rapidly.  There are no options now that don't involve inflicting IMMEDIATE pain on various parts of the economy, no matter which path you choose to fix it.  NOBODY IN CONGRESS WILL VOTE FOR IMMEDIATE PAIN.  They won't deviate from the current path until something forces them to.  The fragility of the system grows by the day as the pain is deferred.  The longer it goes before resolution the more painful the resolution will be.

You think you hate things now, but just wait!

Thu, 01/17/2013 - 23:32 | Link to Comment AlaricBalth
AlaricBalth's picture

+1
And to solidify your point:
House Republicans weighing short-term debt limit increase
http://m.washingtonpost.com/blogs/post-politics/wp/2013/01/17/house-repu...

Thu, 01/17/2013 - 22:57 | Link to Comment alfbell
alfbell's picture

We've hit Utopia! Are you kidding... I don't have to work ever again, can continue to consume and buy everything I want, government assistance in so many forms makes this feasible. Soon we'll all be able to just sit at home in our loungers and watch cable, while eating all number of tasty snacks. And then out to MickieD's, Taco Bell, or Applebee's for dinner. I love my life.

I put my trust in our government and they have delivered the goods. The New Modern Life.

The only pain in the butt will be having go online each month to check the bank account to ensure the auto payment from the government has arrived. So it isn't perfect, but almost.

Thu, 01/17/2013 - 23:10 | Link to Comment MyBrothersKeeper
MyBrothersKeeper's picture

Feels a lot like life in Southern Europe a decade ago.  Now the masses in Greece are so sick of the media siding with the "state" that they have begun attacking journalists in their homes.

Fri, 01/18/2013 - 00:30 | Link to Comment SmoothCoolSmoke
SmoothCoolSmoke's picture

Exactly.....and Southern Europe is still kicking the can.   Wanna bet the US can kick it 10x longer minimum?   Thought so.

Fri, 01/18/2013 - 02:27 | Link to Comment SeattleBruce
SeattleBruce's picture

Can kicking is covering less and less distance - and soon that will be exponentially shorter, and that graph is heading to zero.  When that can is firmly stuck in several or a dozen countries, the end of the current system will be upon us all.

Fri, 01/18/2013 - 05:57 | Link to Comment andrewp111
andrewp111's picture

The kicker has infinite firepower, so the kicking can continue until there is an unexpected wall in the way. Then the can goes splat.

Sun, 01/20/2013 - 04:58 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

infinite firepower means nothing when diminishing returns are in effect.

Hello, Asymptote, my how did you get there?

Thu, 01/17/2013 - 23:36 | Link to Comment neutrinoman
neutrinoman's picture

The growth in consumer spending is all due to credit expansion, but one kind: student debt. That's the whole increase since 2010.

Fri, 01/18/2013 - 00:03 | Link to Comment cranky-old-geezer
cranky-old-geezer's picture

 

 

Of COURSE things are recovering ...on Wall Street.  With trillions of bailout dollars they have mountains of cash and record profits now, life is better than ever, party on.

And no laws to worry about anymore.  Run all the scams they want, no danger of prosecution, just a little fine here and there.

Wall Street might not be the "elite", but they're getting closer all the time, certainly the priviledged class, highly privileged class.

Govt doesn't tell them what to do, they tell govt what to do.  And they really do have their own money tree, aka the Fed.

MSM isn't reporting how Main Street is doing, they're reporting how WALL STREET is doing. 

No wonder they're so positive and bullish and bubbly, Wall Street is doing fan-fucking-tastic.

 

Fri, 01/18/2013 - 05:54 | Link to Comment andrewp111
andrewp111's picture

Yeah. Everyhing just goes along laa-dee-daa until an unforseen external shock slams Wall Street. (It has to be an unforseen shock because TPTB can adjust for forseen shocks.)  The Fed is out of bullets with regard to unforseen shocks as they can't cut interest rates any more. That is when the shit hits the fan, the system hits the wall, and all the gold bugs will be clinging to their guns and beans.

Fri, 01/18/2013 - 00:32 | Link to Comment ebworthen
ebworthen's picture

"So what we’re really seeing is US shoppers who are either unemployed or earning record low wages going deeper into debt to buy stuff. Somehow this is a source of optimism."

Nearly everyone is bullish and full of optimism in Wonderland.

Where has that White Rabbit gotten to?

Fri, 01/18/2013 - 00:24 | Link to Comment devo
devo's picture

 

 

It's a real recovery.

Sincerely,

Manti Teo

Fri, 01/18/2013 - 00:30 | Link to Comment PoliticalRefuge...
PoliticalRefugeefromCalif.'s picture

Well you do have to expand your horizons if you want to capture that vision- Homer and Marge Sixpack hasn't had some come to Jesus moment, they will spend until someone says no..

PT Barnum didn't go broke by over estimating the public's intelligence or attention span, but I believe he was a born again optimist in human nature compared to the level of trust we should offer in our current leaders ability to govern.

"every decent man is ashamed of the government he lives under" HL Mencken.

 

Fri, 01/18/2013 - 03:55 | Link to Comment Frastric
Frastric's picture

BACKWARDS!

Fri, 01/18/2013 - 08:51 | Link to Comment orangegeek
orangegeek's picture

Much like the housing recovery the MSM keeps blabbing up that doesn't exist.

 

http://bullandbearmash.com/chart/weekly-housing-index-remains-channel-re...

 

Philly housing index did a nice 45 degree angle climb thanks to Ben and Barry blowing billions per day buying up overpriced equities.

 

When the markets fall, this index will collapse and real estate will return to reality.

Fri, 01/18/2013 - 09:13 | Link to Comment Poetic injustice
Poetic injustice's picture

Pleaaaase, you should not show unadjusted data.

For your convenience, there is proper "Seasonally bulshitted and adjusted" chart that everybody should use.

Fri, 01/18/2013 - 09:56 | Link to Comment 10PastMidnight
10PastMidnight's picture

Makes me want to borrow money and buy cat food, you know it used to be hamburger and before that steak, but it's all good because there is very little inflation and all.

Fri, 01/18/2013 - 09:59 | Link to Comment Winston of Oceania
Winston of Oceania's picture

How much of that if any includes student loans?

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