51 Months After The Start Of The Recession, Here Is The Report Card

Tyler Durden's picture

Recovery? What Recovery? 4 years after central banks have progressively injected over $7 trillion in liquidity into the global markets (and thus, by Fed logic, the economy), and who knows how many trillion in fiscal aid has been misallocated, to halt the Second Great Depression which officially started in December 2007, the US "recovery" is the weakest in modern US history! How many more trillions will have to be printed (and monetized) before the central planners realize that fighting mean reversion by using debt to defeat recore debt, just doesnt't work? Our guess - lots.

Incidentally, the US has now generated 3 million jobs since the trough of the recession in September 2010, until which point it had previously lost 8 million. Unfortunately, since the real labor force has grown by 4.6 million over the same period, or at the conventionally accepeted 90,000 labor pool entrants per month for 51 months, despite what the BLS may say, because America is after all growing, this means that the Obama administration has created a negative 1.6 million jobs net of demographics, which in turn have cost the US a modest $5.1 trillion in new debt, or an even modest $3.1 million in debt for every job lost.

Chart 1 - the current "recovery" in the context of all previous ones:


Chart 2 - Min, Max and Average... and now


Chart 3 - in bar chart format


Chart 4 - There is good news: 16 quarters after the start of the recession, US output has turned positive. Just barely.

Source: Minneapolis Fed

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Gully Foyle's picture

Isn't that Depression?



The following are 19 signs of very serious economic trouble on the horizon....

#1 According to one new survey, approximately one-third of all Americans are not paying their bills on time at this point.

#2 The U.S. housing industry is bracing for another huge wave of foreclosures in 2012.  The following is from a recent Reuters article....

"We are right back where we were two years ago. I would put money on 2012 being a bigger year for foreclosures than 2010," said Mark Seifert, executive director of Empowering & Strengthening Ohio's People (ESOP), a counseling group with 10 offices in Ohio.

#3 The Citigroup Economic Surprise Index, a key indicator watched by many economists, is on the verge of heading into negative territory.

#4 We are supposed to be in the middle of an economic recovery in the United States, but bad news just keeps pouring in from major companies.  For example, Yahoo is firing thousands of workers and Best Buy is closing dozens of stores.

#5 Richard Russell says that the "big money" is starting to quietly exit from the financial markets....

"My guess is that this is the big money that has been holding off as long as it decently can -- and then dumping their goods just before the close. I don't think the big money likes this market, and I think they have been slowly exiting this market, as quietly as they can."

#6 Goldman Sachs is projecting that the S&P 500 will fall by about 11 percent by the end of 2012.

#7 All over the country, local governments are going into default and we have not even entered the next recession yet.

#8 The U.S. government will add more to the national debt in 2012 than it did from the time that George Washington became president to the time that Ronald Reagan became president.

#9 The Federal Reserve is desperately trying to control interest rates.  The Fed purchased approximately 61 percent of all government debt issued by the U.S. Treasury Department in 2011.  This is the only thing that is keeping interest rates in the United States from soaring dramatically.

#10 German industrial production is falling at a pace that is far faster then expected.

#11 Italy's debt-to-GDP ratio is now up to 120 percent.

#12 The Spanish government admitted on Tuesday that Spain's debt-to-GDP ratio will rise by more than 11 percent this year alone.

#13 Yields on Spanish bonds are rising to dangerous levels.

#14 The Spanish government is projecting that the unemployment rate in Spain will exceed 24 percent by the end of the year.

#15 Unemployment in the eurozone as a whole has risen for 10 months in a row and is now at a 15 year high.

#16 In the aftermath of a 77-year-old retiree killing himself in front of the Greek parliament in protest over pension cuts, the economic rioting in Greece has flared back up dramatically.

#17 At this point, Greece is experiencing an economic depression with no end in sight.  Some of the statistics coming out of Greece are really hard to believe.  For example, one port town in Greece now has an unemployment rate of approximately 60 percent.

#18 The IMF is asking the United States to contribute more money for European bailouts.

#19 At this point, even some of our top scientists are projecting economic trouble.  For example, researchers at MIT are projecting a "global economic collapse" by the year 2030 if current trends continue.

But the truth is that we will experience a "global economic collapse" long before 2030 comes rolling around.

Let us hope that we still have at least several more months of economic prosperity in the United States before things really fall apart.

The truth is that the vast majority of Americans need more time to prepare for what is coming.

Sadly, most Americans are not preparing.  Most Americans have blind faith that those in positions of power are going to fix everything and set us on the path to even greater prosperity than ever before.


A Different Take on the Economy

In "Food Banks Fear They Will Fall Short in Efforts to Feed the Nation's Hungry," the network of the nation's largest food banks gives us a different take on the state of the economy than the one officialdom keeps feeding us (no pun intended):

Higher Food and Gas Prices and Decline in Government Food Donations Cited

Higher food costs and rising gas prices could prove to be damaging to the nation's food banks and their ability to provide adequate emergency food to the nearly 49 million Americans who are currently living at risk of hunger, Feeding America, the network of the nation's largest food banks, announced today.

Although recent reports indicate that the economy is beginning to improve and that the unemployment rate is also beginning to shrink, Feeding America's food banks continue to face significant struggles as America recovers from the worst economic recession in decades.

The Feeding America network of more than 200 food banks and 61,000 local partners are feeding 37 million Americans a year, including nearly 14 million children and 3 million seniors. But with rising operating costs and decreasing supply, a number of factors are contributing to a "perfect storm" of challenges that threaten to leave food banks unable to meet the need in their communities.

Gas prices increased 26 percent in 2011, adding tremendous costs to transporting food. Increased fuel costs particularly affect rural areas, where populations are less dense. Many food banks support emergency feeding across a vast service area.

Food inflation is also hitting food banks hard. Grocery prices increased an average rate of 6 percent in the last half of 2011, and food banks have been hard pressed to make up the difference.

But, but...I thought there was no inflation (according to what Mr. Bernanke and others keep telling us)?

And given that the economy has been "recovering" for almost three years now, how is it that there are still 49 million people who are living at risk of hunger?

Are any of these policymakers and politicians ever going to be called to account for their B.S.?

Maybe Not Forgotten

In "One in Three Americans Paying Bills Late: Survey," the Herald-News brings us the latest news from the front lines of the so-called recovery.

More than half of adults nationwide — 56 percent — have no budget and one-third don’t pay all of their bills on time, a financial literacy survey shows.

The survey, released Tuesday to recognize Financial Literacy Month, also revealed that 39 percent carry over credit card debt from month to month; two in five are saving less than they were a year ago and 39 percent have no day-to-day savings.

The results show that the painful financial lessons of the recession and high unemployment “are quickly being forgotten,” said Susan C. Keating, president and CEO of the National Foundation for Credit Counseling, which sponsored the survey.

Then again, maybe there is no loss of memory involved. Maybe Americans are returning to old bad habits because they've been brainwashed into thinking that things are returning to "normal" by constant propagandizing from the powers-that-be. Or maybe they are in such dire straits that they've essentially given up hope on turning their financial lives around in any sort of meaningful way.


The Alarmist's picture

After $7 Trillion spent, still no recovery?

Why do I smell another Krugman article saying we still haven't spent enough?

Waterfallsparkles's picture

Check out Huffington Post it is there.  Claiming that the FED is being intimidated by the Republicans not to print more money while even more Money printing is needed to get the Economy started.

SheepDog-One's picture

Wait, in the midst of the 'strongest confirmed recovery ever' according to CNBC, theyre suddenly back to dithering about how much more to print to get the economy STARTED? 

Pinto Currency's picture


Accounting for true consumer goods price inflation (not the comedic BLS numbers) in the economic output numbers and taking a look at the employment participation rate as well as total workforce size shows a different picture.

Stripping out "discouraged workers" and part time employees from the unemployment calculation we can see very little evidence of recovery.



The question is whether part time jobs indicate a whiff of stabilization or whether we are seeing a giant head and shoulders forming in labor participation rate.

There will be no recovery until this is reduced by a minimum of 50%:


Straying from the flock's picture

What is broken cannot be fixed.  A dime a day will END the charade.  We must look ahead to what is coming.  This is what I am focused on right now.

Pinto Currency's picture




It appears we are not on the mend.

SeattleBruce's picture

Of course they can't settle on a message - save for one - get obummer re-elected...that'll save us...ugh...

theMAXILOPEZpsycho's picture

Historically stocks lead jobs. So the healthy state of the stock market does indeed suggest a recovery is taking place.

catacl1sm's picture

Cargo Cult. The Fed is simply trying to address the symptoms instead of the cause.

Pinto Currency's picture


No person is so blind as he whose job depends on him not seeing it.

Not Too Important's picture

Absolutely. Thank G-d for the PPT. Brian does G-d's work. Oh, wait . . .


5880's picture

Look up the definition of "short squeeze"

Then edit your post

The Alarmist's picture

Historically stocks lead jobs. So the healthy state of the stock market does indeed suggest a recovery is taking place.

If one follows that reasoning, it would be more appropriate to say, "A recovery will take place."  

Sometime, somewhere, somehow.

max2205's picture

Need to plot the SPX runs on each of those.... showing the degree of Fed over reaction

Stuck on Zero's picture

$7 Trillion spent and still no recovery?  Shoot.  There's the problem.  Spend $70 trillion!

SeattleBruce's picture

Of course we've had plenty of time now to prove out the 'concept' of massive debt based fiat liquidity - it's a massive failure.  Of course Krugman and his ilk don't like proof in concepts, as they involve proof and concepts, and they hide beyind the complexity of the economy.  But there are certain areas that aren't all that complex - like debt saturation.


Dicite justitiam's picture

That's a great chart.  I've got a bit in common with Nathan, too bad he's on sabbatical just as I find his blog.

Max Fischer's picture



First of all, none of the prior recessions were remotely close in severity to the one we just experienced. 

And secondly, the United States used to be an industrial powerhouse with a strong manufacturing base.  Now, we're just a consumer driven society and our largest industry is Wall Street which, for the most part, does nothing but extract a vig from the work of others.  

These two simple differences are the primary reason why this "report card" looks like it does.  

Max Fischer, Civis Mundi


Kayman's picture

"Wall Street which, for the most part, does nothing but extract a vig from the work of others."

The smartest guys in the room forgot that without "the work of others" even the Parasites die.

TruthInSunshine's picture

Looking at that first chart just makes me grateful that the episodes of boom and bust have been minimized and tempered ever since the Federal Reserve was created and went to work in 1913.



Max Fischer's picture



Actually, the creation of the Federal Reserve in 1913 is not the problem. If we were to dismantle the Fed (as Ron Paul wants) it would be like unilateral disarmament; we need a Fed.  Everyone here likes to talk about Iceland and how they recovered so wonderfully, but had it not been for their central bank increasing interest rates to 18% to attract capital, they would have been fucked. All the anti-central bank goons conveniently don't talk about that.

The problem is that our Fed has morphed into something entirely different from what the original charter allowed.  We need a Fed, just not THE Fed that we have today (you can thank Greenspan for that).  Greenspan gave the keys to the Fed to Wall Street.  

Max Fischer, Civis Mundi

Abitdodgie's picture

We need a free market , fuck the fed they can never work . One word "greed"

spekulatn's picture

Free markets are not fair. We need a system that's nice to everyone. Don't be evil. Do G-d's work.

Sarc off/

Rynak's picture

How the hell is the current system "fair"? As with almost all those bipolar ideologies, what we have is "neither"... in this case, neither a free, nor a fair market.

See, in logic possible outcomes are often (at least) two-dimensional... i.e. A, B, NOR (neither), AND (both).

Granted, thiking in those 4 possibilities still is kinda primitive, because it allows no "in-between"..... but it is rocket science relative to the popular stonage thinking in black XOR white.

I mean, heck, could people please at least upgrade to the capabilities of our primitive computers, when it comes to logic? You don't need to do it as fast as them, just be capable of coming up with anything else than dichotomies at all.

Umh's picture



A     B    XOR A,B
0     0        0
0     1        1
1     0        1
1     1        0

tarsubil's picture

Exactly! Just like how we need big government just not the big government we have now. Socialism would work if we just set it up the way I want. Blah blah blah.

Max Fischer's picture



No.  I hate big government.  Nothing about your exaggeration is even remotely close to what I said. 

Answer me this: if we were to dismantle the Fed, would that be equivalent of unilateral disarmament?

Max Fischer, Civis Mundi

Strike Back's picture

No.  It would be the equivalent of our economy gaining a nuke in a convential-arms world.

Max Fischer's picture



Absolutely NOT.

EXACT OPPOSITE, and if that's not immediately obvious to you then nothing I can write will convince you otherwise.  

Max Fischer, Civis Mundi

tarsubil's picture

In a way, yes. Getting rid of the Fed would be like declining to take part in a nuclear war. The best strategy in this bullshit contest is to not play.

Max Fischer's picture




Declining to take part in a nuclear war? Just say no?   

Tell that to Japan. Tell that to all the countries we have marched through with our smart bombs that can fall through chimneys from a 1000 miles away and destroy concrete bunkers 30 feet underground. 

If only Sadam had said, "I simply refuse to fight...." 


When you're the inferior one, you don't get to choose. Without a Fed, our economy would be pulverized and our exports would cease to exist.  Our military would have no funding and 9/11 would happen every week.  

Max Fischer, Civis Mundi

fuu's picture

"Tell that to all the countries we have marched through with our smart bombs that can fall through chimneys from a 1000 miles away and destroy concrete bunkers 30 feet underground."


Those are America's strongest exports.

jonjon831983's picture

See if I understand the argument here:


You can't laydown your arms until the "enemy" or other players lay down their arms and agree not to play.  If you do it first, they will come and EAT YOU ALIVE.


So in terms of central banks - while you could get rid of it and have the Fed stop pumping USD.  Other countries will still have their Central Banks pumping their own currencies.  In this way the USD will be taken for a ride as all other currencies will devalue whilst USD is pushed upwards into the stratosphere... at least until the economy reacts ie. reducing labour costs and cutting standards of living in order to become more competitive.


Now, perhaps on a long enough timeline - with enough pre-existing resources the country could adapt, but on the short run you could get torn apart.  It is the short term problem that is the issue, whether you can survive long enough to adapt or have your resources bled dry.

tarsubil's picture

HAHA! Derp di derp! Derp dee derp di doo!

Joseph Jones's picture

Thanks, Max, AKA God. (sarc off)


Scripture says: "debtor is slave to the lender", and "Let God be true, and every man (even Max) a liar". 

slewie the pi-rat's picture

hey max; quite the distribution here>>

one post gets 22 greenies and 30 minutes later, another gets 36 reds, just 3 down in an actual string

you may have had them up until:  "we need a FED; just not the one we have, today"

we need a different type of civis mundi?  thanks in advance for considering the Q

tarsubil's picture

The sole reason the Fed and the Federal income tax exist is for big government.

How about a far less specious question? Is it just for the People to be subject to the Fed?

Kali's picture

I set up a pay by computer account to pay my taxes at the IRS.  Whenever I do this for government agencies now (state, local, fed, ya know, all the parasites) I start using account id's and passwords like "Debt Peon" or "Fedslave".  Lol.  One gov site kept rejecting my id request, I guess they didn't like the words I was using.  I know, it is a small action, but fun nonetheless.

jonjon831983's picture

IRS website:

"IP address and SSN logged"

"Information sent to FBI, profile created"

Kali's picture

If you are posting here, they have yours too.  I don't give a fuck anymore.  If they want me, they can come and get me.

Tsunami Wave's picture

A pure gold standard, Red Neck Repugnicant.

From Currency Wars, by Jim Rickards, pgs 44-45:

"The classical gold standard of 1870 to 1914 has a unique place in the history of gold as money.  It was a period of almost no inflation--in fact, a benign deflation prevailed in the more advanced economies as a result of technological innovation that increased productivity and raised living standards without increasing unemployment.  This period is best understood as the first age of globalization, and it shares many characteristics with the more recent, second age of globalization that started in 1989 with the end of the Cold War.

The first age of globalization was characterized by technological improvements in communication and transportation, so that bankers in New York could speak on the phone to their partners in London and travel time between the two financial hubs could be as short as seven days. These improvements may not have been widespread, but they did facilitate global commerce and banking. Bonds issued in Argentina, underwritten in London and purchased in New York created a dense web of interconnected assets and debts of a kind quite familiar to bankers today.  Behind this international growth and commerce was gold.

The classical gold standard was not devised at an international conference like its twentieth-century successors, nor was it imposed top-down by a multilateral organization.  It was more like a club that member nations joined voluntarily.  Once in the club, those members behaved according to well-understood rules of the game, although there was no rulebook.  Not every major nation joined, but many did, and among those who joined, capital accounts were open, free market forces prevailed, government interventions were minimal and currency exchange rates were stable against one another.

Some nations had been on a gold standard since well before 1870, including England in 1717 and the Netherlands in 1818, but it was in the period after 1870 that a flood of nations rushed to join them and the gold club took on its distinctive character.  These new members included Germany and Japan in 1871, France and Spain in 1876, Austria in 1879, Argentina in 1881, Russia in 1893, and India in 1898.  While the United States had been on a de facto gold standard since 1832, when it began minting one-troy-ounce gold coins worth about twenty dollars at the time, it did not legally adopt a gold standard for the conversion of paper money until the Gold Standard Act of 1900, making the United States one of the last major nations to join the classical gold system.

Economists are nearly unanimous in pointing out the beneficial results of this period. Giulio M. Gallarottu, the leading theorist and economic historian of the classical gold standard period, summarizes this neatly in The Anatomy of an International Monetary Regime:

"Among that group of nations that eventually gravitated to gold standards in the latter third of the 19th century (i.e., the gold club), abnormal capital movements (i.e. hot money flows) were uncommon, competitive manipulation of exchange rates was rare, international trade showed record growth rates, balance of payments problems were few, capital mobility was high (as was mobility of factors and people), few nations that ever adopted gold standards never suspended convertibility (and of those that did, the most important returned), exchange rates stayed within their respective gold points (i.e. were extremely stable), there were few policy conflicts among nations, speculation was stabilizing (i.e., investment behaviour tended to bring currencies back to equilibrium after being displaced), adjustment was quick, liquidity was abundant, public and private confidence in the international monetary system remained high, nations experienced long-term price stability (predictably), at low levels of inflation, long-term trends in industrial production and income growth were favourible, and unemployment remained fairly low."


Also just to add, to further answer your question, pg 46:

"A great part of the attraction of the classical gold standard was it's simplicity.  While a central bank might perform certain functions, no central bank was required; indeed the United States did not have a central bank during the entire period of the classical gold standard.  A country joining the club merely declared its paper currency to be worth a certain amount in gold and then stood ready to buy or sell gold at that price in exchange for currency in any quantity from another member.  The process of buying and selling gold near a target price in order to maintain that price today is known as an open market operation.  It can be performed by a central bank, but that is not necessary; it can just aw well be performed by a government operating directly or indirectly through fiscal agents such as banks or dealers. Each authorized dealer requires access to a reasonable supply of gold with the understanding that in a panic more gold could readily be obtained. Although government intervention is involved, it is conducted transparently and can be seen as stabilizing rather than manipulating."


Marginal Call's picture

The Long Depression began in 1873 and ended around 1896, so a great deal of the time during this golden age, was anything but.  It was known as the Great Depression, up until they had a worse one.

TheGardener's picture

In architecture, the picture to this day does not look as bleak. Some more buildings were constructed till the outbreak of the European great civil war at 1914 and some more were completed because formerly planed. Everything "re"built ever since needs to be torn down. Sorry for you Art Deco fans , to modern for the art of living.

Buckaroo Banzai's picture

That was a consequence of the demonetization of silver in the US, not the existence of a global gold standard. Until it was demonetized, silver was a very inflationary force in the US economy thanks to the gargantuan amounts of silver pouring out of Nevada. Unwinding that inflation was painful for the US economy.

TheGardener's picture

So this is why the freaking Deutschmark had to go, fiat harder than gold, no way ....