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Yet Another Chart That Whimpers "Recession"
Submitted by Charles Hugh-Smith via OfTwoMinds blog,
It's worthwhile recalling that mainstream economists, the Federal Reserve, government agencies and the mainstream financial media all deny the economy is in recession until it falls off a cliff.
Back in March I published unambiguously recessionary charts of new orders and per capita energy consumption: New Orders Look Recessionary (March 9, 2015)
Why Is Per Capita Energy Consumption at Recession Levels After Six Years of Recovery?(March 10, 2015)
Zero Hedge recently published an overview of charts that also spell recession: The US Is In Recession According To These 7 Charts.
Mish has provided evidence that a recession has already started: Household Spending Growth Expectations Plunge; Recession Already Started?
For those who want yet more quantitative evidence of recession, here is another chart, courtesy of longtime contributor B.C. This is a chart of the Chicago Fed's National Financial Conditions Index (NFCI):
Because U.S. economic and financial conditions tend to be highly correlated, we also present an alternative index, the adjusted NFCI (ANFCI). This index isolates a component of financial conditions uncorrelated with economic conditions to provide an update on financial conditions relative to current economic conditions.
The chart also displays the spread between Baa-rated corporate bond yields (Baa bonds are just above junk bonds, which are typically rated BB or lower) and 10-year Treasury bond yields.
Widening spreads between corporate bonds and Treasuries are associated with recessions, as are ANFCI readings above zero. The current reading is .20, a level that correlates to deteriorating financial conditions and the early stages of recessions.
The more dependent the economy is on financialization, the greater the impact of deteriorating financial conditions. To a large degree, the U.S. economy's apparent strength is an illusion based on extremes of financialization: rampant Fed monetization of Treasury debt and mortgages, extremes of leverage and speculation that have inflated asset bubbles that have created a wealth effect that is limited to the top 10% of households, and is highly concentrated in the top .01% of households.
Here is the ANFCI and the Fed Funds rate, which has been near-zero for years. What can we say about an economy that requires zero-interest rates as the New Normal? How can anyone claim this is a healthy, robust economy if tepid expansion depends entirely on unprecedented zero rates, unprecedented Federal Reserve monetization/asset purchases and a highly asymmetric wealth effect that has widened income and wealth inequality?
At this juncture, it's worthwhile recalling that mainstream economists, the Federal Reserve, government agencies and the mainstream financial media all deny the economy is in recession until it falls off a cliff. Only after a recession can no longer be denied will the organs of propaganda concede that the economy is indeed mired in a recession.
When the organs of propaganda finally concede that the economy is in recession, they inevitably fight the last war: whatever worked in the past is repeated, even though the next recession will be an entirely new financial battlefield. Repeating what worked in late 2008-early 2009 will fail, and fail catastrophically, because conditions have changed.
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Naturally, but I think it's safe at this point to stop calling it a "Recession" and start calling it a damn "Depression"...
The Fed can put shock paddles on it all it wants, the economy is fooking dead & we all know it.
That final bowel evacuation is going to be a stinker.
lets all remember, too, that the US Govt ddnt even officially recognise the 2008 recession until early 2010
utterly pathetic
Well, that's kinda crass, assuming after all our leaders are like Zimbabwe's.
Very montone of you knucks.
I'm wondering if I missed that boat as well.
Trying to clear all the cash out of my bank accounts is proving more diffficult than I had imagined.
One step forward,two steps back.
I've got two clients paying me in PM's though.
Smart if you can get clients to pay in PMs - good job!
The Fed Encouraged Packing TNT round the Blazing Ponzi Fire-Pit - The Impending Explosion is no Accident
http://econimica.blogspot.com/2015/05/the-fed-encouraged-packing-tnt-round.html
Asset bubbles are going nuts w/ froth in stocks, RE, art, cars, etc. etc. (just don't buy PM's...wink wink). BUT the US and global economy is in such bad shape Fed can't raise or Fed's can't raise taxes...in fact expect looser money dead ahead and that is the recipe for hyperinflationary action now...eventually culminating in the long slog of a depression.
BTW - both Residential and commercial RE here in the NW is back to '07 frothiness...offers a $100k over asking on at $400k condo not good enough!!! Investors literally frantic to buy something...anything.
I'm still LMFO over that Joe La Vorgna Q-1 GDP UPGRADE NONSENSE.
Did y'all hear Obama a few moments ago.....
Someone doesn't wanna get caught in the disastrous economic cookie jar.
U know only fixing irans economy!
Guess it's time for more signs pretending to be us working...
Sorry but I turn that cocksucker off immediatly
Yea, I'm with ya on that one. I stopped watching that dope years ago. I always turn the channel, and I never, ever watch CNN Liars Club!
Hey everyone, the United States of Japan/ is decoupling from the global eCONomy. We don't need no stinking manufacturing base.
The U.S. is a service economy that can outsource everything we need. IDIOCRACY!
Japan is ineffective/ and non-competitive with manufacturing in Asia. The United States is ineffective at using it's "human capital" to build superior products at slightly higher prices.
It's a recession here in Houston. Just in the last 2 weeks, several people I know have been laid off from the oil and oil services industries. And yet they are building office buildings and houses like gangbusters around here.
I live in the Houston area. A couple of months ago I was looking at a piece of property that needed some "TLC". It was advertised at around $210,000. I called a Realtor about it. She told me there were 7 cash bids on it and if I'd like... I could place my cash bid also.
I kindly told her I didn't have that kind of bucks and hung up.
This weekend she called me back saying 'Uhmmm... Do you remember me? Uhmmm... that place we talked about is still for sale, except you can get it now for only $145,000... and you can grab it for only 3 percent down!!!'
"The early years of the century marked the progress of the race toward individual freedom and permanent victory over the tyranny of hereditary aristocracy, but the closing decades of the century have witnessed the surrender of all that was gained to the more heartless tyranny of accumulated wealth"
Richard F. Pettigrew 1897
Things have not change one bit!
Exerpted from Grover Cleveland's State of the Union address -
3 December 1888
"A century has passed. Our cities are the abiding places of wealth and luxury; our manufactories yield fortunes never dreamed of by the fathers of the Republic; our business men are madly striving in the race for riches, and immense aggregations of capital outrun the imagination in the magnitude of their undertakings.
We view with pride and satisfaction this bright picture of our country's growth and prosperity, while only a closer scrutiny develops a somber shading. Upon more careful inspection we find the wealth and luxury of our cities mingled with poverty and wretchedness and unremunerative toil. A crowded and constantly increasing urban population suggests the impoverishment of rural sections and discontent with agricultural pursuits. The farmer's son, not satisfied with his father's simple and laborious life, joins the eager chase for easily acquired wealth.
We discover that the fortunes realized by our manufacturers are no longer solely the reward of sturdy industry and enlightened foresight, but that they result from the discriminating favor of the Government and are largely built upon undue exactions from the masses of our people. The gulf between employers and the employed is constantly widening, and classes are rapidly forming, one comprising the very rich and powerful, while in another are found the toiling poor.
As we view the achievements of aggregated capital, we discover the existence of trusts, combinations, and monopolies, while the citizen is struggling far in the rear or is trampled to death beneath an iron heel. Corporations, which should be the carefully restrained creatures of the law and the servants of the people, are fast becoming the people's masters.
cause people who drive Tesla's can also barbecue with the car thus conserving
Gas,oil and electricty at the same time?
What did I win?
Funny you mention a "car bbq". Friend of mine bought a used Porsche. Driving it home before insuring it, the car caught on fire. Later he used it as a BBQ (and still had to make payments).
1929 !
As long as "Initial Claims" keep on going down, the stock market is gonna keep on goin' up. When "Initial Claims" turns negative, look out below !!
System malfunction caused double post. But do watch those Initial Claims. Today the metric hit a 15 year low. Sounds a lot like 2000.
As long as "Initial Claims" keep on going down, the stock market is gonna keep on goin' up. When "Initial Claims" turns negative, look out below !!
All but called Tyler a liar:
http://www.financialsense.com/contributors/chris-puplava/seven-charts-us...
what was particularly interesting was the pork prices chart. Stated that Tyler used chart based on the Thai Bhat.