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.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
JimS's picture

The current "recovery" has been great at my local gun dealer. I stopped by last night and they only a few boxes of ammo left. No .22's, no .17HMR, no .22 Mag, no .45, very few .357, and no .223 calibers. The shevles were virtually empty of ammo. They were actually very concerned, because they were turning away customers. Ah, the current "recovery" is great, right?

IamtheREALmario's picture

How can we define and compare REAL GDP when inflation is manipulaed lower through games. There is no comparison to prior cycles. It is the worst, but probably always has been so because inflation has been undereported.

There are many measures of inflation. One is the price of the stock market. Subtract the price of the stock market from the "growth" and REAL GDP is waaaayyyy negative.

falak pema's picture

There is a direct correlation between the optimism of the Oligarchs worldwide; every bourse is UP since Jan 1 2013, some like UK by >7%, and yet we get the feeling that the general economy is doing badly world wide. 

So if the sheeple economy tanks and the rich man's economy bangs, thats perfect symmetry. We are looking at the wrong asymmetry, its not the general market and debt to credit macro ratios. Thats sheeple talk. Oligarchy talk is : Our stocks are up, our wealth is up and WE print to devalue the sheeple wealth while ours increases. Who cares about the rest! 

One day sheeple world will be down to Zero Hedge level and ours will be upto heaven. Voilà, that day all will be crystal clear. 7 billion sheeple and 10 thousand rich people; very very very rich. Thank you for being nice and sheeple. 

I guess Apple is a sheeple product and Citi bank that will alleviate bigtime in 2013 is an Oligarchy asset. Follow this two track bilflation world. 

PS : I notice that ZH Now espouses the notion that there is a difference between the "economy" and the "market"; upto to six months ago at ZH the ongoing mantra was BK's maxim : The Market IS the Economy! 

Tyler Durden's picture

Actually ZH said in the spring of 2009, so long before your time here, that there is no longer a "market."

If you are confused, perhaps reread this post: This Is What 1,230 Days (And Counting) Of Explicit Market Support By The Federal Reserve Looks Like

falak pema's picture

good for you, but BK, an eminent poster here has always maintained the contrary and has clearly fed the illusion of WS market being the image of the world, just 'cos it wore purple!

I know that BK is tops in Forex and has become more critical with time. I have nothing against individual posters and their spiels, cos we can all be wrong. I do have a problem with recurrent repetition of evident delusions when you are supposed to be on top of the market and of economic indicators. 

How anybody could say that after 2008, and even before 2008, as that bubble was there since 2000, is beyond my comprehension. 

I don't play the market but I do read the doings of the market and since 2000+ its evident that there is an element of manipulation all based on giant banks and no prudential barriers and Greenspan's laxism leading to irrational exuberance. This is ALL old stuff.

Anybody to say post 2008, without a pinch of salt, that the US market was the picture of the economy, would be like claiming Lance Armstrong, recurrently pumped on steroids, that he was the image of true sportsmanship for a guy who knows whats what in cycling world. 

Beyond me, but it still goes on. Just saying...never accept the crime always pardon a deluded  wrong doer. 


Never One Roach's picture

S&P hits 1,500....see, it's all recovered. Banker bonuses will be record high again this year....yacht sales will be robust and Tiffany's will boast record profits.


Just ignore those empty malls, boarded store fronts and unmowed lawns and broken fences and millions of empty houses rotting in Shadow inventory.


Strnage times.

eclectic syncretist's picture

You forgot to mention Alan Greenspan noting the recent frothiness of his Bubble baths!

CitizenPete's picture






LIVE CSPAN Gun Grab Proposal TYRANNY presented with emotion and without statistics  

fuu's picture

Some serious bullshit being spewed there. Dick Durban just claimed that the Sandy Hook shooter should never have owned that weapon. Well no shit Dick they weren't his guns, he murdered the owner and stole the weapons.

Joe moneybags's picture

It may indeed be the worst recovery ever, but it's certainly not the worst stock, bond, or PM market ever.  Go real assets!

ebworthen's picture

CNBC forcing Gary Kaminski to do a "special report" on how hard the SEC is working to "catch the bad guys".

Bank of America up to $11 plus change from $5 (should be at $2).

S&P hits 1500.


yogibear's picture

And new highs.

The SEC can go back to Operation-porn. They can rate the best ladies or guys.

The SEC can also shake down any rating agencies that threaten to downgrade the US credit rating.


JR's picture

As we go marching, lying all the way…

Bernanke and the captured Ivy League universities and their “economists,” of which he is one, are using the charlantry of Keynes to debt-drive America into socialism, allowing the private bankers as we go along to rob the people of their wealth and heritage of self determination.

As ekm wrote yesterday:

“And because of the inherent fraud of the financial system that not only does not produce anything, but by CREATING DEBT OUT OF NOTHING as payment (and yes everybody is paid with debt, not with money), they actually claim portions of people's livelihoods out of nothing.”

America must return to her constitutional duty to issue a debt-free, interest-free currency or cease to exist as a free republic. These long, deep, wealth-extracting sea change depressions are the handiwork of Fed central planners.  Lawrence W. Reed in his book Great Myths of the Great Depression makes the distinction between pre-Fed and post-Fed depressions:

”The Great Depression was not the country’s first depression, though it proved to be the longest. Several others preceded it.

 “A common thread woven through all of those earlier debacles was disastrous intervention by government, often in the form of political mismanagement of the money and credit supply. None of these depression, however, last more than four years and most of them were over in two. The calamity that began in 1929 lasted as least three times longer than any of the country’s previous depressions because the government compounded its initial errors with a series of additional and harmful interventions…

“If this crash had been like previous ones, the hard times would have ended in two or three years at the most, and likely sooner than that. But unprecedented political bungling instead prolonged the misery for over 10 years…”

At Harvard University Director of the Bureau of the Budget Lewis W. Douglas resigned after only one year on the job, and “at Harvard University in May 1935, Douglas made it plain that America was facing a momentous choice:

’Will we choose to subject ourselves—the great country—to the despotism of bureaucracy, controlling our every act, destroying what equality we have attained, reducing us eventually to the condition of impoverished slaves of the states? Or will we cling to the liberties for which man has struggled for more than a thousand years? It is important to understand the magnitude of the issue before us. … If we do not elect to have a tyrannical, oppressive bureaucracy controlling our lives, destroying progress, depressing the standard of living… then should it not be the function of the Federal government under a democracy to limit its activities to those which a democracy may adequately deal, such for example as national defense, maintain law and order, protecting life and property, preventing dishonesty, and…guarding the public against … vested special interests?’”

Entitled 2 Free Stuff's picture

Look, we have to factor in the value of the Obama Presidency when calculating the magnitude of the recovery.  Barack Obama in the Presidency is a substantial net positive to consider.  The same recovery under a Bush or Reagan would obviously be much worse and have more grave implications.  We need a graph portraying the quality of the President in office at the time of the recovery to get the full picture.

linrom's picture

So, spend some money. Besides getting rid of EBT, entitlements and stopping FED monitization, what do you suggest could be done to improve economic growth?

JR's picture

“When Alexander the Great visited the philosopher Diogenes and asked whether he could do anything for him, Diogenes is said to have replied: ‘Yes, stand a little less between me and the sun.’
“It is what every citizen is entitled to ask of his government.” – Henry Hazlitt, “Economics in One Lesson”

CaptainSpaulding's picture

Isnt that from Hemispheres by Rush? Never mind, That was Dionysus.

Central Bankster's picture

How about capitalism as opposed to quasi-fascism, for starters?

Entitled 2 Free Stuff's picture

And only now do we discover recoveries are racist.

Georgiabelle's picture

Congratulations to The Drudge Report for discovering Zero Hedge, the best source for the truth on all things financial. This article is currently linked for two Drudge headlines. 

Pure Evil's picture

This may be the worst recovery ever, but don't blame Obama, try to remember its all Bush's fault.

And, since Bush screwed up so bad, Obama is gonna need at least his 2nd term and possibly a 3rd or 4th or even a 5th term to fix this Republican economic malaise.

And, try to remember what Hillary said, it takes a village full of idiots to raise a community organizer from Chicago to become President of the United States.

Seer's picture

"Worst recovery ever." - USA number 1, USA number 1!  Um, a...

Falconsixone's picture

Gubernment receipts/expenditures seems to be more than personal income/outlays, corporate profits, fixed assets.


So everone can't sit in a tax payer bought chair and surf porn? Someone has to make the porn, chairs, and computers?

Seer's picture

The dilemma: With GDP being based on consumption to the tune of roughly 70% there's way too many chairs.

JR's picture

One man’s recovery apparently is another man’s disaster.

Walking my dog this morning at the mall, I was surprised to see so many empty store fronts and For Lease signs. A very popular restaurant is gone and the large space empty;  a vast pot and plant center also gone; an ornamental hardware blacksmith shop that did custom design for the coastal homes for at least 20 years is gone and many once exclusive store fronts are now benefit shops.

 adr painted a similar "recovery" picture yesterday on ZH:

I have never seen real business conditions worse. They are far worse than 2007 and even far worse than 2009. Corporate cash flow is non existent. What is there is used for share buybacks to artificially inflate EPS.


There is no cash to buy new inventory. The holiday season was terrible. What sold was sold at 50% off or more crushing real profit margins. This left big retailers with nothing for 2013.

Best Buy is fucked. They have no cash, regardless what the BS accountants say. The buyers can't buy anything. Gander Mountain is nearly bankrupt. Dick's fucked themselves over by pandering to the gun control crowd. The only bright spot was the guns being sold in the stores. Target is having massive cash flow problems. The Neiman Marcus collection was a dismal failure. All the retailers that hitched themselves to the Apple train have derailed.

The climate in the trenches, you know the people that actually work opposed to those that reside on the top floor that watch CNBC and grant themselves shares, has lower moral than a team being beaten 100-0. Vendors can't get orders, buyers are afraid to buy something that won't sell, infation is killing budgets.

EVERYTHING IS TOTALLY FUCKED, but stocks are near all time highs. Netflix jumped 40% in minutes. YAY!!!!! Too bad my retail buyer can't pay for product with Netflix shares, but the CEO can probably buy a new yacht tomorrow.

RSBriggs's picture

OT - men and women should be really equal !  Whitehouse petition to have women register for Selective Service draft registration like men are required to do.


clarify it's position on gender equality in the US military.

The announcement by Defense Secretary Leon Panetta allowing women to fill combat positions, is a good start in ensuring fair and equal treatment/opportunity for all service members, regardless of gender.

With equality between the sexes being the major goal of this announcement, each service will determine what standards women must attain to fill a particular military position.

For true equality between the sexes, women must be required to register with Selective Service System (SSS) on their 18th birthday, the same as an eligible man of the same age must do.

I petition the administration to clarify it's position on women and the SSS. Will women be required to participate in SSS now that all jobs are available to them, or will our female forces always be voluntary?

linrom's picture

There won't be any permanent recovery until all capital assets are mostly destroyed. All assets are currently mispriced.  In double entry-accounting, assets equal to debt plus debt free wealth.

Since future debt repayment is a pipe-dream, all assets are priced based on 'fictitious bookkeeping.' The FED is monetizing debt to prevent assets from being accurately repriced and allow people like Romney to continue to book unearned income. To keep this process up, eventually they'll have to come for your assets and reduce your share of income and benefits.

It won't be Socialists coming for your money, benefits etc in order to redistribute to all, it going to be the elite fascists: they're coming after your entitlements and then they'll buy you out for a Penney.

There is no incentive for anyone with idle capital to hire anyone as the returns on capital are higher and perceived to be risk-free, in fact, they're out of this world! Until it stops, there won't be any real recovery.



RSBriggs's picture

Doesn't have one fucking thing to do with Romney.  Stop your left / right liberal/conservative trolling.

linrom's picture

Democrats run the executive branch. Romney advocated zero tax on capital gains. He has everything to do with this anemic recovery.

Seer's picture

Romney is working for the Fed, or he's signing legislation?

I detest the fucker (just as much as I do Obama), but, he's a symptom, not THE problem.

Increase the tax on capital gains and people will just leave the country: on one hand I'd applaud the departure of the vulture class, but on the other this is no "solution" for the real problem- not enough resources (which then kind of makes me reconsider the first hand...).

JR's picture

It's important to realize that Socialism is used by tyrants to gain their footholds on power. Crony capitalism is fascism, a.k.a. socialism. As John T. Flynn states, “Fascism is Fabian socialism plus the inevitable dictator.”

Why is it that the richest men in the world have been financing both Communist revolution and Socialist legislation? Why is it that wealthy socialists co-opted tax-exempt foundations that now dominate American education? How did the socialist meme gain control over most of the world’s press, radio and TV? How is it that oligarchs with crony connections to the center of power have developed powerful control centers in both the Democrat and Republican parties, taken over the U.S. State Department, manipulated themselves into control of the White House? Who are the members of the power group that is seizing the human and natural resources of the entire world?

And why would they support what appears to be the pathway to their own destruction?

The answers to all these questions appear in Tragedy and Hope written by Bill Clinton’s mentor at Georgetown University, Dr. Carroll Quigley. They are the super-rich whose goal is to convert all governments to world socialism which they, the international bankers and business cartels, will control. John Maynard Keynes - the father of our monetary ideology - was a Socialist.

Seer's picture

As long as people lust for power and they present a target (government positions) then we ought not be surprised to find that the road looks like it does.

I believe that a non-socialist once claimed that he didn't care what ideology was prevalent just as long as he could be in power.

Folks who continually warn "socialism is taking over the world" will miss seeing the real takeover advancing.  And as I put it to all the anti-communist folks who helped build militarism in the US: if Communism is such a shitty system then why do you believe that it could take over the world? (BAD SYSTEMS = FAIL!)

Strip it down to what it is about: POWER.

Remington IV's picture

Great ... time for more food stamps and welfare checks

MFLTucson's picture

So what, the free shit is still flowing so this recovery article will fall on deaf ears!

SilverFish's picture

Taking bets on the day Bernak goes on Oprah and pulls a Lance Armstrong.

madcows's picture

Everyone on deathrow claims their innocence to the last breath.  I wouldn't count on any FED or Treasury criminals having a deathbed confession.

Seer's picture

Depends on what the ruling class wants.  If history is any guide he'll be doing the circuit just like Greenspan did.

Maybe he (and Greenspan) will be slapped with a class-action lawsuit claiming that his book is fiction just like what's happening with Lance Armstrong (

madcows's picture

I'd prefer it if you would call it what it is, The 2nd Worst Depression, EVA!, not some papered over, obfuscated, manufactured, over-hyped Recovery.

TWSceptic's picture

Investopedia just updated their definitions to fit the new normal. Changes include


Recession = slow recovery.

Raising debt ceiling = paying your bills.

Investing = all government spending

Speculation = used to be investing, is now betting in the rigged casino called 'the market'

Price discovery = manipulation by central planners to achieve a desired price


DavidM_GA's picture

And remember, since the Senate won't pass a budget since 2009, we have spent the equivalent of the 2009 stimulus EVERY YEAR since then.


But I am sure the Keynesians will continue to crow about 'not enough spending' and other nonsense.

Papasmurf's picture

You can't get recovery without prosecuting the fraud that cause the collapse.  It's not gonna happen.

Seer's picture

Recover to what?

What you're calling for would be a recovery of law, which is a good idea.  Economic recovery, however, is no longer possible (because growth isn't).

IridiumRebel's picture

I'm Ape Shit happy to announce that BloomBastard just announced that the Federal Reserve just eclipsed 3 trillion on its balance sheet.

yogibear's picture

Bernanke and the Federal Reserve can take all the debt and make it disappear. 

Try and beat that Greece and Spain!

The US can load on 10s trillions and have the Fed take it on (buy it from the treasury) and make it vanish.



Mr. Hudson's picture

"The sky is falling! The sky is falling!!!"

401-Kulak's picture

Does this include GD I?