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Thursday Humor: "It's A Recession, But Not A 'Recession' Recession"
For today's humor of the day we turn to a publication owned by German tabloid conglomerate , Axel Springer, and specifically the following title:
Clicking through we find the following soothing words from, who other, a German permabull, Deutsche Bank's Torsten Sløk who says the "broader economy is decidedly not at risk of heading into recession. In other words, we're not looking at a real recession." He adds:
"We are experiencing a profit recession without an economic recession," Sløk wrote in an email on Thursday.
"Lower energy prices and a higher dollar are hurting certain parts of corporate America at the moment," Sløk wrote, "but with the China shock fading and the dollar and energy prices stabilizing it is becoming clearer that we are not about to enter an economic recession because the service sector — which makes up 85% of the US economy — is doing just fine.
Rather paradoxically this is completely at odds with what that other far more credible DB's credit strategist Jim Reid had to say just a few days earlier, i.e.:
The system failed in 2008/09 and rather than allow a proper creative destruction cleansing, policy makers have been aggressively propping it up ever since. This has surely led to a large level of inefficiency in the system which helps explain weak post crisis growth and thus forces them to do even more thus supporting asset prices if not the global economy.
So do we think we're now entering a period where central banks are increasingly impotent? The answer is that they have been for a while on growth so not much has changed. However they can still buy more assets and continue to keep policy loose. Although we don't think QE and zero interest rates does much apart from prop up an inefficient financial system it’s all we've got until we have a huge policy sea change which probably only happens in the next recession.
So - according to the same bank - everything is broken, and the Fed will throw even more liquidity at the busted financial system... but at least we are not entering a recession.
Got it.
Incidentally, those curious what the real recession outlook is, as in "recession recession", here it is from Barclays, as we wrote a week ago: "Barclays analyzed the link between profit margins and recessions for the last seven business cycles, dating back to 1973. In its own words: "the results are not encouraging for the economy or the market."
Figure 2 illustrates the link between profit margins and recessions for the last seven business cycles, dating back to 1973. Figure 3 adds detail by providing a summary of what happened the other six times profit margins declined 60bp in a 12-month period. The results are not encouraging for the economy or the market.
The profit margin decline in 1980 was a signal that the economy had not recovered and a double-dip recession occurred. In 1990, the decline in profit margins predicted a recession and a large decline in the S&P 500. In 2001 and 2008 profit margins fell as the economy entered recessions. This preceded substantial declines in the S&P 500. 1975 was different because profit margins fell after the economy exited a recession and the S&P 500 went up during the subsequent six months. Note that in every period, margins continued to decline.
To summarize Barclays' thinking, the bank says "profit margins have declined by 60bp in the last 12 months. This has happened before. Since 1973 there are six other examples. In five out of six, the decline in profit margins coincided with a recession.
So while 5 out of 6 previous times when margins collapsed by this much, a recession followed. But this time - perhaps because there is a concurrent emerging market crisis, and a global reserve unwind aka quantitative tightening to boot - it will be different, and according to Sløk (not to be confused with his DB coworker who openly admits the system is broken and central bankers have lost credibility), the "recession" recession will be avoided...
Thanks for the løugh.
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is it a "depression recession"?
Yes, it's a depression recession, soon to be followed by a depressing depression.
Your overlords misspoke. It is a 'recess', not a recession. Now go out and play. We will let you know when to come back in.
He is dead. Well not dead dead but more weekend at Bernies dead.
https://www.youtube.com/watch?v=YCTgcZ6ImsQ
I I really really like like that that
It depends on what the definition of is is.
More like a Retard recession?
Bernie, and the debt-money system are both graveyard dead.
Little did we know that it was Jamie and Lloyd propping him (it) up.
It's been several years, and Bernie is startin' to stink a li'l bit.
Party's over.
Carry on.
Exactly, exactly. They are fearing that the inevitable has came and there isn't anything they can do but print more money and that will only make it worse. CNBC won't even say the R word at all, they are being told not to say recession when all data (especially walmart) points to a recession is here.
Buncha retards. But then again, whatchu want from equity pukes?
Its not rape, rape.....
Surprise recession?
We are fucked, but not really fucked fucked.
lol :]
Depends on what your definition of 'recession is', is.
No Problemo.
Cause Profits and Losses don't mean anything either....
well it is if shes still in the kitchen.... but otherwise its free game
"Hey, let's just redefine 'recession' and then they'll all be cool with it."
Recession is defined as a decreasing GDP, which has been happening now for several years, despite the government's attempts at redefining what "GDP" means. So I guess if nobody mentions the big freaking elephant in the room taking up all the air and space, then maybe we can all ignore it. That always works so well.
The profit recession always occurs first.
They know this little about the order of things?
It was the fourth quarter of 2006 when corporate profits after taxes tumbled. When did the "recession" start? The fourth quarter of 2007.
You have plenty of advance notice here.
Funny how people compare today to 1985...
Back then, we had a much stronger labor partcipation rate. Back then, we had very low debt to GDP in the US. Back then, Corporate profit was around 4-5 percent.
In 1985, we were just getting out of Recession from 1980-1982 recession. Now, it's all the opposite.
Today, We have very high debt all around the world. Today, We have much lower labor partipation rate. Most importantly, companies have highest profits ever around 8-9%.
and we have a marxist muslim racist homosexual, who hates America, as president
Not to mention commenters who pollute ZH with ignorant posts.
which part of my comment was inaccurate?
Other than every single one of them? None.
In '85 they were just starting to apply the lube.
The author of the quote is a prick, but not the kind that pops a balloon.
Deutsch zu englischen Übersetzungen ist heikel
Is that like being half pregnant?
Half pregnant is what Elizabeth Shaw was in Prometheus.
It is the World-wide Greater Depression which has been coming since the first money-led boom in the '90s. Boom-bus at more-frequent intervals has been the pattern, and finally the Fed can't (I hope), pump enough free money into the system to cause another boom in the actual economy.
People on fixed incomes have been screwed, inflation has been far higher than the CPI. My kid was startled at food price increases recently, and people around us are moving out of apts because the rents keep going up.
Oh well, as long as it's not a recession recession......
Excellent! I like profit recessions. Where do I get my profit? As long as we don't get one of those compression recessions or even worse, an impression recession, then we can maintain an expression recession with profits for all.
Quote from the author = cunt doublespeak
What really worries me is that we might be heading into a recession recession recession. That would be bad bad.
But Bad bad is good good - in double speak, so to speak
Were are my Med's.... I'm confused
the first analysis is closest to the most correct analysis(common core economics). the strength of the dollar has fucked everything up and is now affecting the world economy. another 10-20% on the dollar weakening fixes everything.
right
currency-wars-r-us
piss on'em
She's Not Pregnant.. She's just Expecting... to Get Pregnant.
The check is in the mail i am just not sure i addressed it correctly, what was your address again,
Hey that's canada's line! We announced weeks ago that yeah, sure, we might "technically be in recession" but not really. Like, if you want to get technical. So, we're all good here. Like.
Oh good, the 20000 laid-off oil workers will feel so much better because they only lost their jobs (technically speaking) and not for real. Maybe the banks won't repossess their houses and cars either -- because they're only technically in default.
With the exception of 1985, all the other "percentage moves" in the SnP500 are just weekly moves so what is the big deal?
That is a $100,000 higher education degree in its full glory
Im going to pay my taxes
but not my taxes, taxes.
*H&B
im glad because I like having friends but i dont like having friend friends..............no what i mean
Just Like me, don't friend, friend.
Haven't heard about a bankster offing themself lately.
Maybe it's Deutsche Bank's Torsten Sløk turn to jump. C'mon Torsten, jump you fucking asshole.
<but don't, like, "jump" jump....just hop off the balcony a little>
http://www.firefighterclosecalls.com/news/fullstory/newsid/211335
https://followingworldchange.wordpress.com/tag/banker-deaths/
http://www.hangthebankers.com/48-suspicious-banking-deaths/
Nope, nothing front page recent, cept this.
Another Bloomberge moment.
http://www.bloomberg.com/news/articles/2015-10-15/deutsche-bank-said-to-...
The FED is in full panic mode about how to let the inevitable bubble collapse occur without catching the blame.
Not only for letting the bubble pop but for blowing the 3rd one in this century alone.
They are doing that by calling for CONgress to do something.
And statements that the fed can't possibly do it by themselves.
Hot potatoe.
The fed might have made a tactical mistake by implying CONgress isn't doing what needs to be done.
Some helpful hints.
http://www.juggling.org/help/other-props/knives.html
http://boards.straightdope.com/sdmb/showthread.php?t=479231
So, the service sector will save us - do they take SNAP cards at the golden arches.
Who the hell will keep working in the future for the free shit army. Bernie says take it from the corporations - with over half of corp earnings being off-shore, what will stop them from going all out. And say to hell with the stupid US market.
we're going to recession recession some folks.
trigger trigger the nail gun
It's not a recession until the government says so. I'm sure they will let us know when we are. I mean, they were spot on about the last one weren't they?
Obama admin is desperate to not have a recession under the magic negro's term. Imagine what 2017 will bring us
rapists need a break, is that it?
We are experiencing a pregnancy without beeing pregnant.
We're getting fucked, not "fucked" fucked, just fucked.