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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 - 14:14 | 3203121 Bear
Bear's picture

Recession, Depression who cares ES marches higher

Thu, 01/31/2013 - 14:18 | 3203144 Sutton
Sutton's picture

No worries.  Just lower rates.

Thu, 01/31/2013 - 14:23 | 3203181 StoleYourMoney
StoleYourMoney's picture

ECRI (), have been saying it. And I'm tired of repeating it; we are in recession.

Thu, 01/31/2013 - 17:13 | 3203967 RunningMan
RunningMan's picture

...and have been since August.

Thu, 01/31/2013 - 14:24 | 3203183 Wile-E-Coyote
Wile-E-Coyote's picture

How many recessions before they fucking call it a depression?

Thu, 01/31/2013 - 15:40 | 3203537 goldfish1
goldfish1's picture

This year? none.

Thu, 01/31/2013 - 14:26 | 3203188 Mark123
Mark123's picture

Who would have believed that the worlds central banks would ever be allowed to create so much money out of thin air?  Nobody....not one single person.  It is incredible in its audacity, and like a deer in the headlights we cannot seem to react to save ourselves.  If anyone believes that this will not have a massive impact on our real economy sometime soon, then they are fools (or they are in the game and believe they will win in a relative sense).

As I see it, the banks have been partying at our civilization's expense for the last 50 years or more...most of the 20th century in fact.  In 2008 it all exploded as the ponzi began to unravel under its own weight.  Since 2008 the central banks have been buying all the toxic garbage from their member banks with crisp new fiat bucks who in turn use that new money to buy government bonds.  Once they have rid themselves of all the toxic crap, then the central banks will probably pull back and the economy will crash and all those govt bonds will act as rent for ever....making us all perfect debt slaves (share croppers?).

This is the endgame of western civilization....Art knows it, but contents himself with "funny old guy" quips (i.e. jovial guy in the bar).


Thu, 01/31/2013 - 14:53 | 3203323 joego1
joego1's picture

More beer

Thu, 01/31/2013 - 14:51 | 3203325 joego1
joego1's picture

More beer

Thu, 01/31/2013 - 16:43 | 3203810 HalinCA
HalinCA's picture

Beer Hell, time for gin.

Thu, 01/31/2013 - 21:39 | 3204740 RockyRacoon
RockyRacoon's picture

For Art this is just another day at the office.  He's seen plenty.  I'm sure he also knows that running around with his hair on fire wouldn't do any good.  Let's let Santelli do that for us.

Thu, 01/31/2013 - 16:14 | 3203210 Glass Seagull
Glass Seagull's picture



Ben Bernanke:  "Haha!!  Prior, annualized GDP numbers don't matter to future GDP numbers!!"

[he says as his eyes nervously dart to the area on his bookshelf devoted to annualized GDP ARIMA models]

Thu, 01/31/2013 - 14:43 | 3203223 CaptainSpaulding
CaptainSpaulding's picture

I remember the good old days when a cool Art cashin used to hang out with Mark Haines on the floor of the NYSE and talk about business. They were both true men with brass balls. Those were the days. 

Thu, 01/31/2013 - 14:43 | 3203286 WTF_247
WTF_247's picture



"Stocks have slipped ... " -- yea right.  The SP futures sold off about 10-12 points TOTAL from recent peak - 10/1500 = .006.  

So now a half a percent backoff is selling?  

There used to be a time (in a galaxy far, far away) where the markets would move up or down 1% each day - it was commonplace.  I guess with the completely managed HFT trading that is only set to BTFD anytime the market backs off, expectation are it will recover into the close with the VWAP chasing algos.  No recover creates panic now.  


I would hate to see the headlines for a 3% dip.  There will be people jumping out the windows.

Thu, 01/31/2013 - 15:03 | 3203375 insanelysane
insanelysane's picture

I was thinking about this today as well.  Even a market that is climbing will have sizeable down swings at a regular frequency.  This completely rigged "market" never has a down swing more that a few points.

Thu, 01/31/2013 - 14:58 | 3203357 NeedtoSecede
NeedtoSecede's picture

Art says that they started tracking the data in 1948. Part of the problem is that they have been manipulating the data since 1949.

One bit of interesting anecdotal info for ZHers: I hate to admit this, but I still have an IRA that a local joker handles for me. I called him yesterday and he said that "He was busy as a one-legged man in an ass-kicking contest." That tells me that the "retail" guy and the 401k guy are getting back in in a big way and the slaughter will soon commence. When responded that it sounds like the time to get out, he thought I was joking. Needless to say he was speechless when I told him I was serious...

Thu, 01/31/2013 - 15:04 | 3203387 insanelysane
insanelysane's picture

The fact that he said "as busy as a one-legged man" means that he should have retired 10 years ago and also sells CDs.

Thu, 01/31/2013 - 15:17 | 3203443 azzhatter
azzhatter's picture

1.5% growth with a fucking madman at the printing press. What could possibly go wrong?  FUCK YOU BERNANKE

Thu, 01/31/2013 - 16:08 | 3203664 Quantum Nucleonics
Quantum Nucleonics's picture

I love Art Cashin.  I'd love to have a drink with the guy, though he'd drink me under the table.  But, who is paying this guy?  CNBC?  Any meaningful job he might have had has long since been taken by a server huming quietly in a data center somewhere.  Is he the new Helen Thomas?  He's a fixture, so he stays, but no one is quite sure what his job is, other than to pontificate once in a while.

Thu, 01/31/2013 - 21:43 | 3204753 RockyRacoon
RockyRacoon's picture

He's with UBS and they probably pay him well enough.

If you want to meet the legend, he's a common visitor to the NYSE's neighbor, Bobby Van's Steakhouse.

Read more: http://www.businessinsider.com/art-cashin-biography-2012-7?op=1#ixzz2Jbj...

Thu, 01/31/2013 - 16:28 | 3203761 Zen Bernanke
Zen Bernanke's picture

Art should know better.  Discussing bear markets is heresy.  QE trumps reality. 

Thu, 01/31/2013 - 16:34 | 3203792 crzyhun
crzyhun's picture

Quick! Increase the hopium from the helo's!

Thu, 01/31/2013 - 20:53 | 3204603 are we there yet
are we there yet's picture

For the last 3 years the public media has been saying our recession is recovering, over and over.  The housing bottom is here, buy now. Hope and change, green shoots, invest in the future.... I am not seeing it yet.

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