Art Cashin's 65-Year-Old Reason We Are Heading Into Recession

Tyler Durden's picture


Stocks have slipped, precious metals have round-tripped, and the FOMC did nothing to save us but nevertheless the world's analysts and economists came to the rescue of yesterday's negative GDP growth print yammering over a never-ending series of reasons why ignoring the bad parts, it was great. UBS' Art Cashin, as always, cuts through all the spin as he notes, while most of headlines concentrated on the 4th Quarter GDP, it did give us a look at the annual GDP for 2012 at about 1.5% (not the 4% growth that was the Fed's projection, he snarks); and it is that 1.5% growth rate that has a 65-year history of concerning implications...


Via Art Cashin,

For why that annual reading may be important, let me quote my Bloomberg pal, Rich Yamarone:

The year-over-year change in real GDP was 1.5 percent. There has never been a time since measurement commenced in 1948 when the annual pace of real GDP has fallen that low without the economy ultimately slipping into recession. Sub-2.0 percent readings are historically the warning signal.

Patterns can always change of course let but that one's got a rather compelling history

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Thu, 01/31/2013 - 13:49 | 3203033 francis_sawyer
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Stocks have slipped ~ stopped reading there...

Thu, 01/31/2013 - 13:50 | 3203038 Zer0head
Zer0head's picture

But but on BBG TV Scarlett Foo(L) actually said with a straight face this morning that yesterday's GDP numbers were good and indicated the economy was strong

Thu, 01/31/2013 - 13:52 | 3203052 Tsar Pointless
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Who woulda knowed?

A con and shill, conning and shilling.

Thu, 01/31/2013 - 13:59 | 3203076 The Juggernaut
The Juggernaut's picture

I hope the Fed Reserve gets the blame for all of this and what will happen.

Thu, 01/31/2013 - 14:31 | 3203234 gamera9
gamera9's picture

Silly it will be the republicans or the weather.

Thu, 01/31/2013 - 14:46 | 3203306 Thomas
Thomas's picture

But Louise Yamada says we are entering a secular bull market. I am just so confused. Maybe I should just give my money to Cramer.

Thu, 01/31/2013 - 15:01 | 3203363 TruthInSunshine
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Stocks will never slip again. Stock prices have reached what looks like a permanently high plateau based on Ben Bernanke's 'virtuous circle' macroeconomic theory and monetary policy construct.

If they did slip, let alone correct, let alone show more signs that we're in a secular equity bear market, even after the trillions thrown beneath equity markets by central planning (directly & indirectly), what would become of Ben Bernanke's 'virtuous circle' macroeconomic model (and could potential gaping holes in said theory be at least part of the reason Timmmmay turned down Ben's job)?

Thu, 01/31/2013 - 16:19 | 3203719 SeattleBruce
SeattleBruce's picture

"Stocks will never slip again."

I know you're expressing sarcasm. - the Weimar stock market had quite the crazy ride also - both massively up and down in 1922 and 1923, before it blew up into oblivion (reset) in 1924.  How much more crazy will this ride into oblivion be for the US markets (the real US economy still being the largest in the world, with the USD still clinging to its reserve status (for how much longer?!)

Thu, 01/31/2013 - 16:31 | 3203774 francis_sawyer
francis_sawyer's picture



I actually think you're on to something there...

Oddly ~ I think it TIES IN to the 'Louise Yamada' posture... I'd consider Lousie Yamada a BEARISH type [though I don't want to get into a debate on that sbject]... Nevertheless ~ based on my view of LY, if she happens to be 'TECHNICALLY BULLISH'... It might make the case FOR Weimar style hyperinflation (per your example)...

Thu, 01/31/2013 - 16:31 | 3203775 francis_sawyer
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double post ~ must be because some BITCOIN MINERS have hijacked my hard drive...

Thu, 01/31/2013 - 16:40 | 3203776 francis_sawyer
francis_sawyer's picture

Triple post ~ Naw... Impossible to consider... [plus ~ I keep all my GOOD PORN on USB Flash Drives ~ but someone as brilliant as EscapeKey... THINK ABOUT IT PEOPLE... username=EscapeKey ~ no 'agenda' implied there... has probably got that all figured out by now]... There's no higher form of entertainment than Zero Hedge... NONE!... I light incense every evening to Tyler Durden statues in appreciation...

Thu, 01/31/2013 - 21:29 | 3204706 RockyRacoon
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This is fun!  Hey, did you know that you can buy bitcoins on eBay.


Thu, 01/31/2013 - 14:56 | 3203342 one-in-nine
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It's all Bush's fault ;)

Thu, 01/31/2013 - 20:27 | 3204539 de3de8
de3de8's picture

It better be nobama

Thu, 01/31/2013 - 14:01 | 3203081 Cdad
Cdad's picture

The "market" has literally turned into a parade of stupidity in the last 48 hours...or that last four weeks depending on how you measure stupidity.  The useless idiot on The BlowHorn [CNBC] during yesterday's last hour of trade may have top ticked this entire steaming pile.  To quote: "I'd forget about this GDP print."  Yeah.  That sounds like wise counsel.  Some other fool yesterday actually tried to explain how this weak GDP number bodes well for the next.

On the equity front today, a consumer stock I follow closely seems to be great at selling its stock higher...but its products...not so much.  New five year high on hopium commentary from the CEO in the face of falling revenue.

Amazon...what could a person even add to the stupidity of that price action?  Truly a top tick signal. I'm supposed to believe in the image of zombies walking around while FaceBooking/navel gazing who are enthralled with...commercials?

You can truly see the value added by the professionals within the criminal syndicate known as Wall Street.  To avoid recession, it would seem that all we really need is more stock brokers.

Good grief! [and by that I mean...I wonder how many more clowns can tumble out of this Volkswagen?]

Thu, 01/31/2013 - 14:40 | 3203269 mr1963
mr1963's picture

The markets just waiting for the 401k holders to go all in, then it'll collapse. The crowd is moving in that direction now, it won't be long.

Thu, 01/31/2013 - 15:35 | 3203512 I need more cowbell
I need more cowbell's picture

TBTB have completely won the narritive. When a site like ZH and a guest like AC title articles "...headind into a recession", the spin meisters win. We have 47-48 million people on food stamps; true unemployment around 16-24%, depending how you skew underemployment; negative Q4 GDP ( yes, i know all the BS data is suspect, every one every time ); yada yada.

We are HEADING into a recession?? HEADING??

Thu, 01/31/2013 - 15:59 | 3203592 NoDebt
NoDebt's picture

Agreed.  Wouldn't know what a recession would look or feel like at this point.  Probably about the same as now.

I'm not sure we will ever have a declared recession again.  The phrase "economic recovery" apparently MUST be used at all times in all venues, even in the face of solid evidence to the contrary.

"Economic recovery" rings about as hollow in the US today as the phrase "glorious revolution" in past communist/dictator countries.  They were never glorious and we never recovered. 

There will only be periods of "moar recovery" and "less recovery."  But never another recession, let alone a depression.


Thu, 01/31/2013 - 17:25 | 3204001 Freddie
Freddie's picture

F TV and F Hollywood.  they keep saying everything is great - everyone loves Oba-MAO.   Evil evil people.  There is no dissent in this country.  their is no news media protecting the public. 

Pull the plug on TV and Hollywood.

Thu, 01/31/2013 - 21:38 | 3204730 akak
akak's picture

And give up "Here Comes Honey BooBoo"?!  NEVER!!

They'll have to pry my TV remote from my cold, dead hands first!

Thu, 01/31/2013 - 20:40 | 3204576 Remington IV
Remington IV's picture

Harry Reid  ...  ' We are in a recovery "

Thu, 01/31/2013 - 23:17 | 3204996 Buck Johnson
Buck Johnson's picture

They know we are about to go into another bad recession (if we ever left it in the first place).  Cashin knows and the data tells him that it is so.

Thu, 01/31/2013 - 13:50 | 3203035 ZippyBananaPants
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Squares odds for all your superbowl partys.

Thu, 01/31/2013 - 14:36 | 3203082 francis_sawyer
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Kind cool actually [those SQUARES ODDS]...


But francis_sawyer ALREADY GAVE YOU all you needed to make your year...

I gave you TAKING the Ravens at +400 [on the MONEY LINE] for BOTH the Denver & New England games... You'd have a 16 bagger by now...

Now ~ Take the Ravens on the MONEY LINE, again, at (+160), and turn it in to a 25.6 bagger... [which you can then PARLAY into bitcoins & get 'fuck you' RICH]!...


Edit: One 'silicon valley' 49ers fan already disagrees... WHAT A SHOCK! [to think that someone out there... SEES VALUE... in taking the 'other side' of that prop and LAYING -190 on the 49ers... I mean, bitcoin miners, I mean ~ eh WTF ~ enjoy your wings & sauce]... Don't forget to wipe your chin...

Thu, 01/31/2013 - 15:35 | 3203521 goldfish1
goldfish1's picture

No wings left to buy. Looks like it's gonna be homemade meatballs, quesadillas and guacamole with a side of homemade bean dip.


YUM. go niners.

Thu, 01/31/2013 - 15:49 | 3203575 francis_sawyer
francis_sawyer's picture

The francis_sawyer household is equipped with 5 freezers... Luckily ~ wings aren't a problem... [But your menu would do in a pinch]


All kidding aside ~ I think it's gonna be a fantastic game [here come the JUNKS from the sports haters, with which I can 'process' your objection, but HELL... If it weren't for a little sports entertainment, francis_sawyer would probably just spend the whole day playing 'pin the tail on the donkey' with a Netanyahu poster taped to the wall... You CAN'T SAY you'd want that either]...

I guess the only REAL way to achieve happiness is to fire up your computer & check your BITCOIN balance...

Thu, 01/31/2013 - 18:22 | 3204172 Panafrican Funk...
Panafrican Funktron Robot's picture

<---lunatic fringe member, who also appreciates a good game of football.  And eating like a fucking prince.  

Thu, 01/31/2013 - 13:52 | 3203047 Michelle
Michelle's picture

The biggest question is: How deep and protracted will it get?

In the meantime, BTFD! or not.

Thu, 01/31/2013 - 22:35 | 3204875 Fish Gone Bad
Fish Gone Bad's picture

Q: How deep and protracted will it get?

A: It will, most certainly.

Thu, 01/31/2013 - 13:52 | 3203050 mr. mirbach
mr. mirbach's picture

World War in Syria/Libya/Mali/Iran wil fix it.

War will start as soon as Hagel is confirmed.

Thu, 01/31/2013 - 13:57 | 3203069 otto skorzeny
otto skorzeny's picture

he has to prove he is worthy to be an honorary 12 Tribesmen- he started with his grovelling via an apologetic letter to Babs Boxer(dual US/Israeli citizen)

Thu, 01/31/2013 - 13:51 | 3203053 kill switch
kill switch's picture

Recession? as heading into one? We are in a a world wide depression....HELLO!

Thu, 01/31/2013 - 13:55 | 3203063 mckee
mckee's picture

See... things are getting better! Guess everyone is right.

Thu, 01/31/2013 - 13:57 | 3203066 rubearish10
rubearish10's picture

Yes and in worldwide recessions equity markets rise! Hello Hello!

Thu, 01/31/2013 - 14:08 | 3203101 Id fight Gandhi
Id fight Gandhi's picture

Doesnt matter stock market is up going for record highs that's all that matters.

Thu, 01/31/2013 - 13:58 | 3203056 otto skorzeny
otto skorzeny's picture

"There has never been a time in history when central banks have pumped this many joobux into the stock markets" -fixed it for you ya old mick

Thu, 01/31/2013 - 13:55 | 3203058 buzzsaw99
buzzsaw99's picture

Congrats to the fed and bubbles bernank on blowing yet another whopper bubble.

Thu, 01/31/2013 - 13:54 | 3203060 LongSoupLine
LongSoupLine's picture

Show me the fucking printfest that has occurred in that time, or any time period, then continue to fucking tell me how the fucking "warning signal" will play out. Buy silver and fuck Bernanke up the ass.  fucker.

Thu, 01/31/2013 - 13:56 | 3203062 fonzannoon
fonzannoon's picture

Art thinks we are not in a recession? Art is starting to remind me of this guy.

Thu, 01/31/2013 - 14:05 | 3203094 buzzsaw99
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To Art a recession means when the stock market goes down.

Thu, 01/31/2013 - 14:15 | 3203139 Cognitive Dissonance
Cognitive Dissonance's picture

Where you stand depends entirely upon where you sit and the view from there.

Thu, 01/31/2013 - 14:47 | 3203310 asteroids
asteroids's picture

Even Art knows "the stock market is not the economy". As the last 6 years have shown. The economy could tank and the market would probably ignore it thanks to the FED.

Thu, 01/31/2013 - 15:16 | 3203425 buzzsaw99
buzzsaw99's picture

I doubt Cashin gives a rat's ass about anything other than the stock market. Let them eat junk bonds.

Thu, 01/31/2013 - 21:36 | 3204728 RockyRacoon
RockyRacoon's picture

Do I detect a bit o' the ole jealousy there?  Art Cashin has been there, done that.

Old is not synonymous with stupid -- usually just the opposite.

"He started on The Street right out of high school in 1959 just a few months after his father died.
Cashin's father passed away a few months before he graduated, so he found a job to help is mom make ends meet. 
He started on Wall Street as an assistant clerk at Thomson & McKinnon in 1959."
Read more:

Thu, 01/31/2013 - 13:56 | 3203064 Cognitive Dissonance
Cognitive Dissonance's picture

But this time it's different.

<No.....wait, this time it's different. Really!>

Thu, 01/31/2013 - 13:57 | 3203074 blindfaith
blindfaith's picture

People only hear and see what they want to and the rest is noise and flickering lights.

Thu, 01/31/2013 - 14:09 | 3203103 venturen
venturen's picture democrat...bailout democrat...bailout I-Banks, Print

Thu, 01/31/2013 - 14:11 | 3203113 venturen
venturen's picture

Dam the torpedoes and man your printing presses, FULL SPEED AHEAD!

Thu, 01/31/2013 - 14:16 | 3203115 ebworthen
ebworthen's picture

Going back into depression; we never came out of recession other than in charts.

Thu, 01/31/2013 - 22:46 | 3204907 Fish Gone Bad
Fish Gone Bad's picture

Its been raining for quite a while now...

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