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Are You Expecting A Recession?
Submitted by Raul Ilargi Meijer via The Automatic Earth blog,
Russell Lee Columbia Gardens outdoor amusement resort, Butte, Montana Aug 1942
The folks at Bloomberg put this piece up today with the intriguing title‘Predictors of ’29 Crash See 65% Chance of 2015 Recession’, and I thought: wait a minute, that’s what people, lots of people, actually think, that there’s going to be recession. While still others will trust Morgan Stanley and Goldman Sachs, who, as the article put it, “posit an expansion that has plenty of room to run.”
For the vast majority of those in the world of finance, and probably in a much wider world, those are the options, because that’s how they think. Either more of the same, or a recession, as we know it in a cyclical sense, where the economic cycle goes up and down but in the end keeps turning up. And where any sudden moves are telegraphed well in advance by monetary authorities for the grace and benefit of them, the investors, so they don’t lose too much and can instead profit at every step, whether it’s up or down.
And then it dawned on me, which took a few seconds because that’s not how I see the financial system at all, I see neither a recession nor a helpful and friendly Fed, that this is why so much money is going to be lost by so many people. But then, from where I’m sitting, that’s the game, isn’t it? In a functioning market, someone needs to lose for someone else to gain. And the smartest prevail.
And y’all you want a real market, don’t you? One that reflects what’s really going on in the real economy?! Just so, you know, you’re not going to buy shares in companies that report numbers painted with big fat strokes of bright pink or shiny red lipstick on your porkchop.
The problem with this is that whatever money you manage to save in a collapse is money the major banks won’t be making. They’d much rather take it from you than let you keep it. And who do you think the Fed will turn out to be more friendly with, you or Jamie Dimon and the Oz behind his curtain?
if you take a good hard look at how the US – and EU and Japan – economies have developed over the past decade, there’s only one possible conclusion you can draw. Which is that these countries no longer have functioning markets. Without the multiple trillions in stimulus share prices would have been at a fraction of where they are now.
And then the question is how much longer that pretty much blind market support can continue. Well, it won’t be infinite. Because that would bankrupt nations too fast even for Wall Street’s international banks, but more importantly because those same banks are not making nearly enough money in the present set-up. And that’s the clincher.
But apart from what the Fed wants or doesn’t want, the fact remains that it has been instrumental in blowing the bubbles of the Dow and S&P to unforeseen heights. And that this has happened because through time investors started believing the Fed has their back. Countless ‘experts’ today will tell you that if markets start falling tomorrow, the Fed will step back in.
Really? To what end? If that were true, they might as well never have tapered. Because if anyone knows how the Fed has distorted the markets, it’s the Fed itself. So for all I know, they may simply think they’re done distorting. And that they can sit back and watch the, after all inevitable, collapse unwind.
Inevitable because the alleged progress and recovery we’ve seen since US QE started brings tears to your eyes when you look past the partly massaged and partly plainly made-up numbers that go into GDP and jobs reports. Wipe off all the lipstick from the American pig, and you’re left with no more than a handful meager slices of diet bacon.
The Fed knows this, I know this, and now you do too, but many investors don’t seem to be catching on. They are, instead, talking about the probability of a recession. But that’s not what lies ahead. We’re well, and fast, on our way to a deep depression. Nothing cyclical, unless perhaps you’re talking Kondratieff’s 70-year cycles.
Recession is a useless discussion by now. The US is a painted pig, the EU needs to let countries go or they’ll go to war, Japan hung its head in a noose for Halloween and China has its 32nd consecutive month of falling factory-gate prices.
Lower oil prices may for now hide some of the pain, but even that is too much for Japan, because of the deflationary effect of even less consumer spending. And it’s that lack of spending that’s everyone’s worst enemy. But you can’t solve that with central bank stimulus. The formerly rich world is loaded with burger flippers, food stamps and underwater homes, and that means less, not more, spending.
And we all know, though perhaps not by how much, that all ‘formerly rich’ governments have historically unequaled spin doctors on their payroll, so the real numbers across the board are much much worse even then what we are ‘allowed’ to know. And what we do know is already awful once you sweep away the propaganda. You’re only going to be OK as an investor if the Fed continues to hold your hand and lead you softly through the ups and downs. You really think they will?
Recession? In your dreams.
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For 99.9% of the people, the recession never ended. The good times have been rolling along for the 0.1%. A fascist, police state exists only to serve the few.
My part of the nation has been in recession for two generations.
Not so bad once you get used to it, and find a good street pharmacist.
The economy is pregnant with depression.
The fed has tried to abort that pregnancy but it only grows stronger and angrier. When birthed, its going to be one bad-ass bitch.
"after sleeping with the devil, you'd love to close the book, but you gotta wonder how the baby's gonna look!"
the corruption and neglect is so pervasive and extensive that the country cannot be saved. I believe that collapse is imminent.
Let if fall. We live in country that no long rewards most for hard work. It is a land of the inherited non-producing douches.
I'll agree that the country no longer rewards hard work - it's a country that expects men to work hard, so they can be weekend dads or buffoons on TV.
But as for "inherited non-producing douches", that's just envy talking. Sure those guys are there, and nobody thinks highly of them. But that isn't where your hard-earned money is being siphoned off to. Look at the Federal budget - Social Security, Medicare, and Medicaid make up most of it, and most of that goes to little old ladies. Yeah, little old ladies aren't a very satisfying as scapegoats, but that's the reality.
Im expecting a Depression!!
Seems like a trick question.
We have been in a depression since 2008.
thank a veteran today... don't ask why, just do it you dumb fucking serfs!
Where would I be if these heroes didn't volunteer to become cannon fodder for the banksters? We should all thank them every day for slaughtering women and children all over the world so we can be free
Just imagine if we didn't have the liberty to be monitored and have all our activities recorded for analysis of if we are a threat and need to be eliminated? I shudder to think how horrible things would be without our murdering vets.
Arthritic hippies trashing those who make them feel like pussies, while hiding behind a keyboard. Priceless.
Eh, here's a reminder that they speak the truth, from the most decorated Marine in US history (at that time):
https://www.google.com/search?q=smedley+butler&oq=smedley+butler&aqs=chr...
Please support THEVETERANSSUPPORT.ORG
Please support MURDEREDIRAQISANDDRONEDPAKISTANICHILDREN.ORG
People that believed the lie and enlisted should be honored for their service.
No kidding. The programming to worship Mars is a little much.
"Military men are just dumb, stupid animals to be used as pawns in foreign policy."
- Henry Kissinger
Listen.
Excellent comment. Stunning.
It's an easy opinion to have, when your nation is defended by ICBMs.
Damn! Another great laugh! Thanks! 2 or 3 on this thread alone! Never saw my seniment better expressed! God bless you.
Please support:
www.Torture&IncinerateSucklingBabies&NursingMomsMostlyWithSkinDarkerThan...
If the economy was healthy and balanced we would not be experiencing slow growth while massive amounts of money are being printed and poured into the system. The crux of our problem remains in the fact that both people and governments have lived beyond their means by taking on debt they cannot repay. Over the last several decades we have created entitlement societies built on the back of the industrial revolution, technological advantages, capital accumulated from the colonial era, and the domination of global finances.
Promises were made on the assumption that the advantages we enjoyed would continue in both Europe and the US. Ever greater prosperity and entitlements were to be sustained through debt financed consumption growth. In that eerie fantasy world, debt fueled consumption was to be the catalyst to bring about evermore growth. Debt does matter and the following article delves deeper into why kicking the can down the road will ultimately fail. What is before us will be very ugly.
http://brucewilds.blogspot.com/2014/08/modern-monetary-theory-is-wrong-d...
You and your blogspot suck ass. Fuck off with your non-stop pimping you douche-nozzle.
C'mon man...he's not that bad, is he?
Anyone who is prepared to put there own time and effort in, in a bid to wake up more of the masses deserves respect not slamming.
Too much propaganda shit out there and not enough alternative media.
You make some good comments then fuck it up by pushing a shitty blog.
I'm going out on the lecture/seminar circuit teaching people my course in 'flipping' cardboard mansions under the interstate for profit.
We are living through an exceptionally extreme recession drought.
It would be like a sweet refreshing rain.
Got Gold?
Even my CFA is buying the 'foolish metal' at this price. He read the artilce by former Asst Sect'y Treasury about the dollar actually being worthmuch much less and almost had an MI. I think as more sheeples realize the issues, they will seek hard assets that are undervalued -- like the yellow metal and the bright silver one.
Im expecting a whole lot worse but to be honest, im numb to society/woes and what has happened since 9/11.
a depression with all time highs all day every day
Raul ate the fuck up with the dumbass...
i dont know about a depression but what do you have when the labor "participation rate" is 68% and falling... and what consumer goods will the 32% be buying... we just heard the already known fact that the "administraiton" is totally OK WITH LYING TO THE AMERIKAN SHEEPLE... who are TOO STUPID to know what is good for them... teh amerikan sheeple didn't want obamacare... the paid off pols and insurance companies did and they just paid at the polls...
So rest easy because market collapse, bank failure/taxpayer bailout and global brushfire war is OBVIOUSLY GOOD FOR YOU BUT YOU ARE TOO STUPID TO REALIZE IT.....
Shit, they can all just keep on printing, can't they? Dow 30000 by the end of next year and gold $400.
As long as people keep taking it, that is exactly what will be, and I really don't see any pitch forks, shit, no one besides old Bernie even went to a country club.
I don't think in terms of either a depression or a recession. I am thinking more along the lines of a transformation once we hit a brick wall. There's no point in trying to recapture what we had because it's what got us into trouble in the first place.
The pie does not need to be made bigger. It just needs to be made better. Perhaps even smaller because an economy where money is not wasted on Kardashian apps, pharmaceuticals and junk food, as well as empty New York apartments that remain empty, might actually be able to make us happier, healthier and wealthier in a sustainable sort of way.
Interesting plan.
Who's going to make the rules on what apps are acceptable?
How will competition work for pieces of the shrinking pie?
Exactly. "Sustainable" translates as: "I'm the boss, now bend over"
Inevitable.
I guess the task at hand is to become the boss/king, or one of his minions.
Human DNA is a bitch and capitalism was fun (for many) while it lasted.
We should move the national capital to San Francisco, then wait for the next Vulcan ship to stop.
Not much of a economic rescue plan, I know, but it's got to work better than what we're doing now.
I don't care about no recession because I make my money by going to college.
If a nation consumes more than it produces that nation becomes poorer. Period. Who has been advocating free trade for the last 20 years ? Not Ross Perot, Pat Buchanan or Danno Anderson, that's for sure.
Who has been advocating Immigration, diversity and mult-culturalism ? Why do we need more people in the USA to steal jobs that otherwise would have went to Americans ?
Only thing I can figure is get unloyal fuckheads into the Army that will be happy to shoot the rest of us if need be because the alternative is either no job or possibly deportment. Yes, they'll be loyal to the overlords but not to us.
Isn't the US great? Has the whole world pissed off at them including their own citizenry. It's like the psychopath drug-addict family member that just won't go away and ends in disaster. You just can't get rid of them without severe actions and they also have a way of dragging you down with them.
Pray to god 'transhumanism' doesn't come about anytime soon could you imagine the likes of an eternal Diane Feinstein? LMAO. Probably be some squawking solid gold computer box algo with no conscious spitting out Feinstein 'likelyhoods' and somehow keeps getting voted into office.
We're just fucked as a species even we got rid of all the morons there'd be a new group to pop up and stick it in our ass. We'll never learn and we are likely to become extinct because of it. The rest of the Universe is lucky that we can't travel very far lol but who's to say other beings aren't just as bad I don't know. Maybe that's why more of them haven't shown up.......they've also blown themselves up lmao.
Thanks, first great laugh of the day! I lived and worked under Fienfuck in SF. You nailed it pretty well. Republicrap POTUS: STOP THE NEEDLESS/ENDLESS WARS! Democrap POTUS: MOAR WAR!
Guess you're not a believer in the story behind "Interstellar" the movie (I never visit theaters but made exception for this one).
If you don't have children, you import them.
Growth - in everything - is non-negotiable.
...
So let's see.........the mainstream predicting recession and stock market crashes.
Here's a high probability outcome: The recession 'continues', but get's worse, and is brushed under the carpet with gazillions of disguisments created by the likes of Karl Rove. Even though the end of QE has been declared, the criminal jackasses in the US gov't and the clown from "IT" that runs the central bank will figure out other ways to keep the markets pumped up if not rising.
Fact of the matter is the world has gone to hell in a handbasket and those in power are breaking rules, or making them up as they go, and we have seen this time after time over the past several years so be careful if your convinced of either being long or short because no one knows what these creatures from hell are going to pull.
Or it gives them cover for QE4:
People are getting used to the shit sandwich that is the new normal. They don't want to imagine what's worse. Print MOAR money goddammit.
Lest we forget TPTB require people to be on edge 24/7. No rest for the weary. Just chant the TPTB is good, three times a day. All will be well. Hell, Obama is in charge and he's the man(or woman if you look at the recent APEC picture). If some sort of acceptable equilbrium takes place then the masses don't need them anymore. Blaspheme!
Meh, a Carrington solar event is due any day. Will level everything overnight. Hope the SD card in your phone is immune to EMP. Those virtual shoes and dresses you bough on the Kardashian app would go to waste.
So, at what point does the FED lose control? Can they maintain this charade forever???
Yes they can unless somebody stops them.
Knowing when is impossible. Recognizing it when it happens will be easy.
"Are You Expecting A Recession?"
Expecting? When did the Dear Leader Obama recession leave? Fake "recovery" numbers from government agencies full of wealthy government workers don't mean much to the people unemployed and under employed.
It appears there is a NWO and it looks as if the USA will have to work a little to be part of it.
In the world's eyes, the USA is turning into a North Korea, threats, drawing lines in the sand and so on.
George W even went so far as to name countries as the Axis of Evil, when it is obvious a lot of the world is thinking otherwise.
When push comes to shove, the old NWO was controlled by the USA, the new NWO is a shared partnership it appears. Countries working together to by pass what they consider to be out dated.
Other than air quality, I see a growing Chinese middle class. The same goes for other Asian nations. All the countries we assumed are back water barrios are starting to rise as far as general population standard of living is concerned. You can see that in quality of life indexes, where the USA has fallen from being #1 to 13th place in a relatively short time.
Yeah, the USA has a big military. But who wants to be friends with the big 'bully'? No one.
A change in attitude and thinking in DC is all that is required. The world really does not want war or CIA/NSA type shenanigans anywhere.
There are hotspots in the world where despots want to control subjects, but for the most part these despots will slowly disappear. If China, Russia and the Latin block decide to 'sanction' any country, I think the sanctioned will feel it.
Out with the old, in with the new. Euro/US is done with. Indebted and corrupted, they are the old roman empire.
Meanwhile, China, Russia, Brazil, India... the BRICs, have built things, and saved their money. And, they have invested it, instead of handed it out for unproductive nothings. Let's see, give foodstamps and housing and obamaphones to non-workers, or put that same money into building cities and roads and infrastructure... who wins?
Oh, and wealth is making shit and selling it to other people for a profit. not borrowing and redistributing the borrowed money. Euro America is done, kaput, bankrupt. Time to learn Mandarin or Russian. I'm thinking Russian. There are some good looking russian girls on the pop up ads, pre-ad blocker, of course.
Of course, the one thing y'all r leaving out of the discussion is that the BRIC's have corruption that makes America look like a bunch o'pikers. The worst kind, which is to say, the stupid kind, of corruption, where you can't get a building permit without a suitcase full of cash, and the pharmacist marks up life-saving medicines to the point where your sick son will die if you don't sell him your daughter. For starters.
Maybe so, but alternatively I can get to see a competent physician or dentist in Mexico for example almost right away and have done so.
It is also possible to purchase medications over the counter in some of these countries without a prescription. I used to get an ear infection once in awhile and bought the antibiotic over the counter after consulting with a pharmacist. Saving me a lot of time, trouble, money and pain. The last time I had this problem in the USA about ten years ago I had to wait in a walk in clinic for a day (I was paying cash), treated like shit by the attending physician.
I told the doctor as I was pissed. "I am not your patient. I am a customer and you treat me like shit. I could have driven to Tijuana and bought this over the counter for $12 and been back at work by now."
It cost me a day and almost $180 for the prescription and medication.
Great post, but I would suggest the US while obtaining political independence from GB has almost always been under control of the British Banks.
Cranes.
Where there is growth there are construction cranes. Where do I see them? In th elast few years of travel, they are plentiful in central and east Asia.
There is the future.
the investor class has a fed guarantee. raul is out of his mind if he thinks the fed will throw the billionaires under the bus.
The makers aren't making much.
The buyers aren't buying much.
The earners aren't earning much.
The bankers selling debt are doing ok.
And even they are complaining.
We may be here for a while until the system pukes up the bad debt.
Then these will look like the good old days.
It's gonig to be a long time before the debt is gone. The FED/Gov wouldn't let the bad banks fail. Zombie banks are all the rage. It's Japan 2.0. This will go on for decades. Hell, it has been decades if you go back to the dot.com implosion, and even further back to the S&L debacle.
If this mess plays out the way I expect, debt could disappear overnight.
Then you'll see REAL deflation!
"...the EU needs to let countries go or they’ll go to war..."
sounds good, yet it makes no sense if you think about it. "let go" current members? which ones? the Balts? do you care to explain them that they have to go back to their beloved old overlord?
Is there an actual process for ejecting EU members?
yes. making their life so damn miserable that they want to leave. see the poor, poor UK /s
but seriously, this guy talks about war. so it is not about the EU, it is about the NATO, with or without it's main component, the USA
what is the damn EU? nothing else then a common regulatory environment. a commercial jurisdiction over a common market
we on the western part of the continent were pushed hard by the US and the UK to "enlarge" to our Eastern Brethen. but now they are our brothers, even if eventually the UK will leave and the US interest will wane
I'm not bashing or poking the Bear, here. Just pointing out that it is there, and it is a factor in out minds, as much as China is for Russia itself, and will always be
the Balts are not for sale. If they want to go back, fine. Otherwise... the very first European motto: Molon Labe
So, you're long Euro then?
technically, yes, just by my exposure to my business in the eurozone. I don't speculate. I have enough risk by being an entrepreneur
I've always had work. And, in the last several years I've had nice raises and bonuses. But, still, the cost of living has skyrocketed. I'm always stressed. I'm always looking to cut spending just to keep my head above water. And, maintaining the house has become increasingly harder. There's always a project, but this time, there wasn't enough money to make the repairs. I'll try to save some over the winter and do it next spring. From my perspective, it's Stagflation. But, really, what's the difference, recession, depression, stagflation, inflation or deflation. It's a crappy economy, and DC and the banks are to blame. FU you F-ing corrupt POS criminals.
Sounds familiar. Might be time to sell the house to a rich investor so they can rent it out for $2k a month(to who I don't know, would assume regulations will be lifted to allow ten families in one house) and then move into the inner city into a rat cage.
I visited an odd shopping mall the other weekend. Mostly owners of junk stores. Run down places. Working 7 days a week peddling junk. Some were working on said junk in the parking lot.........repainting, grinding, etc. The owners lived in a nearby trailer park in a crappy singlewide. Which is probably luxury compared to a couple with a mentally reduced child living in an RV behind the store. Complete slum. You don't need to go to China to see crap like this.
Pull a caper.
If you are current on all your bills and have good to excellent credit, torch the place.
If you have < good credit, authorities will launch an investigation.
Inflation is a process used by government to take that portion of the people's wealth which is not taken directly by taxation. This is achieved easily because it takes a 3-digit IQ to understand that prices aren't going up at all, but rather that the people's currency is being deliberately diluted.
US debt held by the Fed: Just another chart
... or maybe another way to understand whether a big financial crisis is about to explode
http://failedevolution.blogspot.gr/2014/11/us-debt-held-by-fed-just-anot...
‘Temporarily’ halt SS and pension payments. They got us into his mess they can pay to get us out.
Cutting off those who've paid into the system for decades is wrong.
The people who should be cut off are those who've contributed nothing. The people who're 5th, 6th and 7th generation on welfare.
If they riot in the streets, then so be it. The rest of us will deal with it.
It'll be messy, but I have a feeling it'll resolve itself very quickly.
Is there any mechanism that can bring about this monetary regime's demise (or positive transformation) besides supply/demand shortages on real goods?
If not, I'm afraid that the Federal Reserve/Deep-State Chimera can continue on indefinitely, especially so long as it can supply its constituent countries with cheaper energy than Russo-China.
Is there any other mechanism besides supply/demand shortages of real goods that can call the house's bluff?
They will change the gdp calculations before we ever see this current administration ever admit there is a recession.
Recession, Righhhht.
If the U.S. middle class was healthier they'd just spend the money on cr*ppy goods and materialistic waste, in the vain hope of pretending to others that they'll successful.
This poor me attitude is sad to watch. You're not poor because governement makes you poor. Yes, artificial rates are a nuisance but it's never been easier or more acceptable to start your own business and create real prosperity. The pre-2007 economy was a false economy built on cheap debt and rising home equity. Those days are gone and it's not all governements fault.
A large responsibility lies at the feet of the worker who believed in a job for life and failed to live frugally. Making money is easy. Keeping and growing it is the hard part. Bitching all day long about high stock prices and gold/silver prices is a lame way to live.
There is not an iota of doubt that most of the citizenry consists of imbeciles. But putting the screws to these hapless souls is nonetheless very much the fault of government. For proof, simply look at how well the members of government manage to live, even in the face of an ongoing debacle they pretend to manage.
I don't really think you would be able to call what's coming a simple "depression".
More like an implosion of Biblical proportions.
Take away food stamps, SNAP, EBT or whatever you want to call it and let's see how the retail sector will do. House of cards, two legged stool, whatever.
All I want to know is when.
Every couple of weeks I have to decide either to buy ammo, 2014 silver eagles or add to my GDX and GDXJ.
I'M GETTING TIRED OF WAITING!
Ammo is precious.
me too! I am psyched at the gop wins, thats the best chance to reduce those programs or stop expanding them at least.
Id buy ammo. gdx will be owned by the cme in a minute...they cant produce enough phyzz to fill delivery, and they cant afford to dig at 1000/oz---dont buy the stock, buy their secured or most senior bonds--then you'll get the new shares if they are allowed to exist --but probably will be owned by the fed govt for security reasons, natch.
all it will take is a tick down in tax revenues and the two factions of the gop, the snap reducers and the deficit reducers to get in the same room...not sure if they will get 60 votes though. reduction in govt spending (and tbond issuance) will drag gdp negative and we can get started.
Move the lawyers from first to second in line for the guillotines. The first to behead are the Bill O'Reilly's and Michael Medveds of the world and their ilk, the talking heads selling their souls to Satan for mammon handed to them by their banker war monger lords.
And now for something completely different .
Some new owners are coming in .
See
https://www.academia.edu/9247204/Be_Your_Own_Owner
or
http://andreswhy.blogspot.com/2014/11/be-your-own-owner.html
"In a functioning market, someone needs to lose for someone else to gain. And the smartest prevail."
Actually, on both these points - no.
Sometimes people lose when someone wins. But any transaction assumes mutual gain of some nature. If I held a stock from 5 to 10 and choose to sell at 10, I either need the money desperately and have to sell, or I believe 10 is at or near the top.
Anyone purchasing is doing me a favor, in either case. If I believe it's still going up, but I need cash, now I have cash (win). If I believe it's peaked, I sell and get out at my perceived top (win). The purchaser may buy and give me cash, and the stock can rise (win for him) or it can fall (bad for him). So on a pure transactional theory standpoint, 3/4 of the potential outcomes are positive - it's a 75% win, not 50-50, as you presume. It gets even more complicated if you start factoring in options, but needless to say the potential outcomes there can push the win % UPWARD.
What all this means is that there are gains to be had on both sides in any transaction, but because there are few potential losing transactions, when the losses DO come, they tend to appear outsized rather than evenly distributed.
More to the point, at the time of transaction, BOTH SIDES assume a positive outcome has been achieved. It is only later, after time has passed, that one side can claim it did not make a good transaction. But at the time, both sides worked with the information available to them and made reasonable transactions they were happy with.
As for the smartest prevailing....well, it goes without saying this is unlikely on the face. I know plenty of dumb people who do well in the market. For some of them, it's almost preternatural. Luck? Maybe...but still, you don't have to be smart to do well in a market.
The other shoe to drop, is a Great Depression.