• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

It's Official: Worst. Recovery. EVER

Tyler Durden's picture


If there was any debate whether the Fed's policies have helped the economy or just the market (and specifically the Bernanke-targeted Russell 2000), the following two charts will end any and all debate. As the following chart from the St Louis Fed shows, as of the just completed quarter, US GDP "growth" since the "recovery" is now the worst in US history, having just dipped below the heretofore lowest on record.

A slightly prettier version of the same chart created by JPM's Michael Cembalest, is presented below:


But fear not: it is only the worst recovery ever for anyone unlucky enough to still rely on such Old Normal concepts as the "economy" to feed, clothe and provide shelter for themselves.

For those lucky 1% of the US population whose entire wealth is in financial assets (and who once again managed to avoid a tax hike on carried interest or any actual financial assets), times have almost never been so good.

Well, it's not the biggest surge in the market since the economic trough in history, but it is close. Which as Bernanke admitted some time ago (when discussing the level of the Russell 2000), is the only thing that actually matters to the Fed.

Yet oddly enough, the trickle down from the trillions in excess wealth created for those who hold financial assets, as a result of daily POMOs pumping some $85 billion, and soon more, into the stock market each month, has yet to materialize.

Oh well: just keep on doing more of what you are doing Uncle Ben, and if possible destroy the US economy even more than you already have - at this point, at least on a relative basis, you can't destroy it more.

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Thu, 01/24/2013 - 12:09 | 3182670 cynicalskeptic
cynicalskeptic's picture

depends on how you define your terms....

'Trickle down' has been going strong - most people I know feel like they've been getting pissed on since Reagan.....  they'd be happy if it stopped.

Thu, 01/24/2013 - 12:19 | 3182700 NotApplicable
NotApplicable's picture

Trickle down inflation, FTW! Saving nominal value of retirement accounts today, so they can become worthless in purchasing power tomorrow.

As for $9 bread, it will be more than offset hedonically by the substitution of a $5 can of dog food, so as you can tell, it's really a non-issue.

Ain't politickin' grand?

America, Fuck Yeah!


Thu, 01/24/2013 - 10:27 | 3182336 babylon15
babylon15's picture

Tyler, you can do better than this.  Show us the same graphs of Real GDP per Capita.  Because, the data is even stronger in support of your argument than the current graphs; real GDP growth per capita is actually zero *SINCE 2005*!

Thu, 01/24/2013 - 12:14 | 3182680 cynicalskeptic
cynicalskeptic's picture

Using shadowstats numbers factoring in the real rate of inflation, GDP has been NEGATIVE for over a decade.   

After Carter, the politicians learned itr was better to lie and fake the number than tell the truth.  They also learned tht amost people are too stupid to realize what's really going on - though even the really dumb ones start to catch on when the lies get too extreme

Thu, 01/24/2013 - 13:00 | 3182820 Seer
Seer's picture

"After Carter, the politicians learned itr was better to lie and fake the number than tell the truth."

After 1970/1971 this was the case because the US had gone into default -off the gold standard- AND it's most revenue-producing export -oil- went in to production decline.  Physical reality for propping up "The American Dream" was no longer possible from this point forward...

Thu, 01/24/2013 - 13:34 | 3182929 Raymond Reason
Raymond Reason's picture

Including govt spending and purchases without subtracting increases in govt debt, makes the entire GDP measure, a farce.  Creation of DHS increased GDP.   Why do we even look at this measure of productivity?  For that matter, health care doesn't seem productive either. 

Thu, 01/24/2013 - 11:00 | 3182338 Cognitive Dissonance
Cognitive Dissonance's picture

The only measure of 'recovery' that counts these days is the stock market and banker bonuses.

<All is well from Wall Street's perspective.>

Because the business of America is bidness. - Tony Soprano Jamie Dimon

Thu, 01/24/2013 - 21:22 | 3184379 tip e. canoe
tip e. canoe's picture

nice one.   ever see the merchant banker?


"nice to do bidness with you"

Thu, 01/24/2013 - 10:28 | 3182340 Hedgetard55
Hedgetard55's picture

Ben will go down in history as the Napoplean of financial crime, surpassing Ponzi, Madoff and even his mentor Greedscam. May he rot in hell for eternity.

Thu, 01/24/2013 - 11:00 | 3182425 otto skorzeny
otto skorzeny's picture

Don't besmirch the upstart Corsican-Napoleon had the balls to go out and look his enemy in the eye-and the whole of Europe trembled at his name. Men like Bonaparte change the course of history-petty money men and bureaucrats like the ones you mention will be shortly forgotten about as their actions result in nothing but the shuffling of numbers and bits of paper.

Thu, 01/24/2013 - 11:03 | 3182476 Hedgetard55
Hedgetard55's picture

I was not besmirching the diminutive Corsican, Mr Napolean, by any means, merely paraphrasing Sherlock Holmes opinion of Professor Moriarty.

Thu, 01/24/2013 - 12:21 | 3182708 NotApplicable
NotApplicable's picture

Hmm... can't it be both?

Thu, 01/24/2013 - 13:32 | 3182925 The Shootist
The Shootist's picture

Otto is correct. Napoleon was one of the three most important figures in all of human history. Sherlock... don't make me laugh. the Brits have been spinning lies about Napoleon since the wars they financed to overthrow him and the threat he posed to the monarchies. They've taught that he was a cruel ogre to the masses from day one, he should have invaded them and annihlated them when he had the chance. If it weren't for Amiral Villenueve's incompetence at Trafalgar, maybe he would have.

Napoleon never started a war. He only fought to protect his nation's honor and territorial boundaries. As for Egypt, well, he was trying to liberate them from the Turks, but we know how those from the Orient behave toward common sense. They go dirka Jihad.

He also won more battles than Caesar, Alexander and Hannibla combined, and led from the battlefield unlike today's pussies in the Pentagon. /

Thu, 01/24/2013 - 12:20 | 3182698 cynicalskeptic
cynicalskeptic's picture

What's NOT mentioned - or even realized - is that the 'money men' are the ones who ultimately pull the strings of the Napoleons and others.  

Wars cannot be fought without money - those that provide access to it determine IF wars will occur and who will be doing the fighting.   Constantinople was looted (instead of the Holy Land being freed) to pay off the Italian bankers who financed the Fourth Crusade.  The fact that a trading  rival to the Venetians was also eliminated was a bonus.

Thu, 01/24/2013 - 14:54 | 3183220 e-recep
e-recep's picture

bonapart was financed by siena-based bankers, tough.

Thu, 01/24/2013 - 11:03 | 3182478 Sanksion
Sanksion's picture

No one but ZH readers would bitch about how a currency was destroyed in a hundred years. History books focus on wars, not bankers.

Thu, 01/24/2013 - 11:21 | 3182530 Ms. Erable
Ms. Erable's picture

That's because banksters own the printing presses.

Thu, 01/24/2013 - 12:54 | 3182798 Tango in the Blight
Tango in the Blight's picture

Wars are often the result of things like this.

Thu, 01/24/2013 - 13:01 | 3182822 Seer
Seer's picture

Wars are ALWAYS about resources.

Thu, 01/24/2013 - 10:29 | 3182341 BurningFuld
BurningFuld's picture

There is no way people are going to accept having to work for a living anymore when you can just print money. Thanks for that Ben...you da man!

Thu, 01/24/2013 - 10:31 | 3182357 TerminalDebt
TerminalDebt's picture

Working? Most of us here spend more time reading ZH

Thu, 01/24/2013 - 12:25 | 3182717 NotApplicable
NotApplicable's picture

Look around closely and you might notice that there aren't any real jobs left, except for the position of "tax-paying sucker."

So, what do we do, but pretend to work, while they pretend to pay us.

Thu, 01/24/2013 - 10:32 | 3182361 TotalCarp
TotalCarp's picture

Isnt that why we voted for this Hussein dude? FREE STUFF!

Thu, 01/24/2013 - 10:44 | 3182408 Shizzmoney
Shizzmoney's picture

There is no way people are going to accept having to work for a living anymore when you can just print money.

Just ask Tim Geithner, Lloyd Blankfein, or Jaime Dimon.

Those motherfuckers haven't worked an entire day in their lives!

Thu, 01/24/2013 - 11:40 | 3182602 DaveyJones
DaveyJones's picture

Hey lying is hard work. Ask the lawyers

Thu, 01/24/2013 - 12:00 | 3182655 philosophers bone
philosophers bone's picture

Lawyers pale in comparison to the brokers.  At least the lawyers (usually) act in their own clients best interests.  Brokers don't even do that.

Due to various "self-regulatory organizations" and law societies, all of these hardworking groups get to regulate themselves.

Thu, 01/24/2013 - 12:59 | 3182807 DaveyJones
DaveyJones's picture

damn, can't lawyers be first in anything. All we do is bitch. At least our regulatory body spanks us now and then 

Thu, 01/24/2013 - 23:08 | 3184683 tip e. canoe
tip e. canoe's picture

nice one from martin

Ben Franklin argued lawyers should nominal judges for they will nominate the best to eliminate competition.


Thu, 01/24/2013 - 13:04 | 3182832 Seer
Seer's picture

"There is no way people are going to accept having to work for a living anymore when you can just print money."

People are learning how the 1% do it!

And, really, "interest," money earned on money, really IS printing money.  As we're starting to see it's a bit problematic to have everyone "retired" and "earning" "interest."

Thu, 01/24/2013 - 10:30 | 3182344 fonzannoon
fonzannoon's picture

It's the Russell now? I thought it was the S&P? Then Einhorn told me the Bernak put was under the bond market. Then I thought it was all about Aapl. Man I can't keep up.

Thu, 01/24/2013 - 10:29 | 3182345 TotalCarp
TotalCarp's picture

Fundamentals dont matter. Until they do. Will take another year or two tho i recon for a proper spanking.

Although the spx puts are getting soooooo cheap!

Thu, 01/24/2013 - 10:30 | 3182350 Fidel Sarcastro
Fidel Sarcastro's picture

worst recovery ever even with $1trillion/yr deficit spending?  well done Obummer...oh wait, it's Bush's fault.  

Thu, 01/24/2013 - 10:44 | 3182413 ArkansasAngie
ArkansasAngie's picture

Obummer?  Bush?

Don't be wedged.  They are one in the same.

Thu, 01/24/2013 - 11:09 | 3182481 Shell Game
Shell Game's picture

Oh but wait, it is such a clever thing to say and it makes certain people feel really good....


I suppose if/when we get some uber-fascist, R-trademark, in the WH next, we'll have to endure all those clever retorts from the libs.  I already anticipate the cringe...

Thu, 01/24/2013 - 10:31 | 3182351 mayhem_korner
mayhem_korner's picture



Not sure what the prior "low" of the range is, but if that one and the current were normalized by a consistent measure of inflation, I suspect the current recovery (sic) would never have even traversed the range.  Then again, if any kind of real measure of inflation was used, the word "recovery" would only be referred to in the future (hopeful) tense...

Thu, 01/24/2013 - 10:32 | 3182353 lead salad
lead salad's picture

It's all rainbows and unicorns...at least that's what I'm told....

Thu, 01/24/2013 - 10:31 | 3182354 Acet
Acet's picture

This is bullshit!

Things are in fact much worse that the graphics show.

That slightly upwards sloping curve which is the official growth in Real GDP for the current recovery would actually be sloping downwards if the official Inflation numbers hadn't been tampered with.

You see, Real GDP is calculated from Nominal GDP (which includes "growth" which is purelly dollar devaluation) by discounting it using the official inflation figures. The lower the offical GDP, the higher the "Real" GDP for the same Nominal GDP values.

So, print money, fiddle with official Inflation figures so that they're lower than reality and presto: instant "Real" GDP growth (which is really just dollar devaluation).


Thu, 01/24/2013 - 10:33 | 3182356 Dr. Engali
Dr. Engali's picture

I'll wit and see what the tv tells me to think about this then I'll comment.


Edit.... The Tv says bullshit things are about to explode. All hail our overlords and Resiliant Dynamism!

Thu, 01/24/2013 - 10:33 | 3182368 TotalCarp
TotalCarp's picture

let me help you: BTFD!

Thu, 01/24/2013 - 13:21 | 3182891 Raymond K Hessel
Raymond K Hessel's picture

Did you see Art Cashin on CNBC? He kept rattling off geopolitical events and with each one noted there was no effect on the S&P.  He's scratching his head like, "how bad does bad news have to be for it to be reflected in the S&P?"


Thu, 01/24/2013 - 19:36 | 3184136 ArkansasAngie
ArkansasAngie's picture

Bad news ... distractions.  So long as the sheeple don't lite on the fact that until ... unless ... moral hazard is actualized and the yahoos who made these bad decisions are fired and replaced things will not get better. 

It will probably take the economy tanking before we can enforce solvency aka bankruptcy and orderly dismantle this monstrosity.

The alternative is not going to be fun.

Thu, 01/24/2013 - 10:32 | 3182359 yogibear
yogibear's picture

Pump trillions more of printed money to banks and Wall Street and they think it will work?

Some money may trickle to the average Joe but most of it went to only the top 3%.

Bernanke and the fed recapitalized the banks for now but indebted the masses more. So the masses default and it eventually shows up on the financial balance sheets.

Rinse and repeat Bernanke and the Fed. Until the masses wipe off school debt and others nothing changes.

Taxes and food is higher. Wages in general have declines, with regard to inflation.


Thu, 01/24/2013 - 10:35 | 3182376 Water Is Wet
Water Is Wet's picture

"Pump trillions more of printed money to banks and Wall Street and they think it will work?"

No one actually thinks that will "work."  That is the tale they tell the plebes, while they continue to hand bankers fat stacks of cash; how else would crony crapitalism work?

Thu, 01/24/2013 - 10:35 | 3182360 Rockfish
Rockfish's picture

Its not a recovery its remission. So when the Dr gives you the latest high tech drugs to fight your cancer and low and behold you get better, that's called remission. A Pause followed by the inevitable. 

Thu, 01/24/2013 - 10:55 | 3182455 Cycle
Cycle's picture

It's  like using morphine to treat malaria.

Thu, 01/24/2013 - 13:20 | 3182887 resurger
resurger's picture


Thu, 01/24/2013 - 10:33 | 3182365 EmmittFitzhume
EmmittFitzhume's picture

When the Fed stops pumping an AIG a month into the system the rest of this so-called recovery will be wiped out

Thu, 01/24/2013 - 10:35 | 3182379 Water Is Wet
Water Is Wet's picture

So never, then?

Thu, 01/24/2013 - 12:30 | 3182733 NotApplicable
NotApplicable's picture

Dunno, does their logic include when they bump it up to 2 AIG's a month?

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