• Sprott Money
    05/05/2016 - 06:02
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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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Fri, 04/06/2012 - 18:31 | 2323500 Kali
Kali's picture

C'mon get it right, they call it "food insecurity".  :  )

Fri, 04/06/2012 - 12:39 | 2322394 gatorengineer
gatorengineer's picture

Bullish, makes a case for QEx..............  Buy APPL.....

Fri, 04/06/2012 - 12:38 | 2322395 fuu
fuu's picture

So glad I am long squiggly lines.

Fri, 04/06/2012 - 18:15 | 2323459 GoinFawr
GoinFawr's picture

~

~

Fri, 04/06/2012 - 12:40 | 2322399 tawdzilla
tawdzilla's picture

Nobody could have seen this coming.

Fri, 04/06/2012 - 13:17 | 2322505 Buzzworthy
Buzzworthy's picture

I'm assuming you are being sarcastic.  In case you weren't, I'm afraid you are mistaken.  Peter Schiff was warning in 2006 about the great collapse coming in 2008.

http://www.youtube.com/watch?v=Z0YTY5TWtmU

Well before that, however, in the 1990s CFTC Chair Brooksley Born was warning about the danger that OTC derivatives posed.  For doing her job she was ousted from the SEC and subjected to an unbelievable amount of scorn by Greenspan and the rest of the Clinton era criminal gang.

http://www.pbs.org/wgbh/pages/frontline/warning/interviews/born.html

This crisis was obvious to those who wanted to stop it from happening.  That they were silenced or ignored is the real crime.

Fri, 04/06/2012 - 14:20 | 2322760 Cpl Hicks
Cpl Hicks's picture

Thanks for posting these.

 

Fri, 04/06/2012 - 14:47 | 2322883 Decolat
Decolat's picture

Nobody could've seen this sarcasm coming.

Fri, 04/06/2012 - 15:10 | 2323001 Not Too Important
Not Too Important's picture

I predicted you'd say that.

Fri, 04/06/2012 - 15:08 | 2322994 Not Too Important
Not Too Important's picture

Griffin back in the '80's. Or 'Tragedy And Hope' in the '60's. A warning if there ever was one.

Sat, 04/07/2012 - 11:23 | 2324422 11b40
11b40's picture

'None Dare Call It Treason' in the 60's.

Fri, 04/06/2012 - 16:05 | 2323175 Vendetta
Vendetta's picture

Ross Perot did too.  This is the big sucking sound that so few can hear.

Fri, 04/06/2012 - 13:20 | 2322517 Kayman
Kayman's picture

Somebody saw it coming. Anybody could have seen it coming.

Some don't blame it on me.

Nobody.

Fri, 04/06/2012 - 12:43 | 2322400 ekm
ekm's picture

 

For americans to have a comparative understanding of how stupid and beyond idiotic and horribly inadequate those emplyment numbers are, I am re-posting the following:

 

From our Department of Truth here in Canada, there were 73,000 jobs created for a population of 34 mil.

From your Deparment of Truth, there were 120,000 jobs for a population of 300 mil and again these are Department of Truth numbers. Do the math.

 

My point is that 120,000 or even 300,000 is quite, quite, quite horrible. By comparison I wanted to show the stupidity of the number, which is in itself very much inflated.

Using numerical logic, US number should have been 10 times larger thus 700,000 jobs since the population is 10 times larger.

My rule of thumb:

- Canada Data: multiply by 0.7

- US data: multiply by 0.6

- Euro data: multiply by 0.4

- Chinese data: multiply by 0.2

 

Fri, 04/06/2012 - 12:53 | 2322431 The Alarmist
The Alarmist's picture

Yepper! But you Canucks have oil, gas, and diamonds to exploit and the will to actually employ people to do it, eh?

Fri, 04/06/2012 - 12:59 | 2322457 ekm
ekm's picture

Thx for the comment.

You do and you don't have a point IMO. My answer to that it: So does Russia.

Having something is one thing, deciding to make use and not waste what you have is another thing. We are slowly wasting our resources with Universal Health Care and increased gov spending. Does it ring a bell?

Fri, 04/06/2012 - 13:06 | 2322475 The Alarmist
The Alarmist's picture

Canada was ringing that bell for a couple decades ... It still did not register south of the border.

What truly amazes me is that the US govt feels a need to patrol the northern border with drones and other high tech surveillance. One would think it is Canada that should be on watch.

Fri, 04/06/2012 - 13:24 | 2322527 ekm
ekm's picture

http://en.wikipedia.org/wiki/Resource_curse

Have you heard of Resource Curse?

It's in full force in Russia etc. It's getting very strong in Canada. People have started thinking that crude oil and minerals will keep the standard of living quite high forever. Russia at al shows it's untrue.

Fri, 04/06/2012 - 13:48 | 2322615 The Alarmist
The Alarmist's picture

Could be worse ... Could have few or no resources.

I'm of the school that says "use them up." We won't be serious about moving on to better things while we still have plenty of cheap, easy-to-get-to resources lying around.

We will remain stuck on this rock until an asteroid wipes us all out, and then what will a few more green zones and solar panels mean to us?

Ad Astra!

Fri, 04/06/2012 - 16:45 | 2323258 donsluck
donsluck's picture

Oh, you're from THAT school!

Fri, 04/06/2012 - 15:02 | 2322970 Not Too Important
Not Too Important's picture

I don't trust anyone that puts gravy on their french fries. Been worried about it for a long time. Bastards.

Fri, 04/06/2012 - 15:30 | 2323091 ekm
ekm's picture

I'm from Europe, dual citizen. Go to the gym 4-5 days a week.

As far as I remember it was ZH that posted few days ago that by 2022 the average american would weigh 650 lbs.

Fri, 04/06/2012 - 17:03 | 2323304 Not Too Important
Not Too Important's picture

Careful with the gym. One of the fastest ways to catch MRSA. Make sure the gym keeps everything sterilized constantly.

My last gym didn't.

Americans will weigh less when there's less food available, or less domestic money to buy it with. Starving's a bitch.

Fri, 04/06/2012 - 18:36 | 2323514 ekm
ekm's picture

Thx a lot for the MRSA warning. I just looked it up. I'll take preventive measures.

Fri, 04/06/2012 - 15:06 | 2322983 Westcoastliberal
Westcoastliberal's picture

The guest-turd contributor on here yesterday was yapping about how we're in "recovery".  Truth is, as far as "job creation" goes here in the U.S., we're not even keeping pace with the increase in working-age population, much less "gaining" anything.  I agree when we see 700,000+ (if ever) then we might be getting somewhere.  And where those jobs will come from is anybody's guess.

Fri, 04/06/2012 - 19:28 | 2323621 ekm
ekm's picture

Debt destruction = Debt forgiveness = Shut down 3 out of 5 big banks and break up the other 2. Hence people will have real collateral on their houses and start taking risk about creating businesses, hence jobs.

It's called Death  & Resurrection. It happens all the time.  Though my Easter is next weekend, the fact that this weekend is Easter is quite symbolic as far as your question is concerned.

Death and Resurrection.............Alllllll the tiiiiiiiiiime. The only way. No other way exists.

Fri, 04/06/2012 - 12:45 | 2322412 SpeakerFTD
SpeakerFTD's picture

About Chart #4...

 

"Output" here basically refers to GDP, right?   Doesn't GDP include, with simple addition, all government spending, meaning that all the debt-based spending is a completely artificial bump to GDP?

What would be very interesting is a graph comparing the recoveries absent debt-based government spending.  I imagine the resulting image would be pretty shocking.

Fri, 04/06/2012 - 13:07 | 2322477 UP Forester
UP Forester's picture

I'd just like to see "GDP" without substitution, hedonics, and with true inflation values.

Chart 4 would be about as different as the BLS employment charts w/o the super-double-dipped-fudge factor....

Fri, 04/06/2012 - 14:51 | 2322909 monopoly
monopoly's picture

UP, no you dont. I doubt if your heart could take it. :)

Fri, 04/06/2012 - 13:30 | 2322538 SpeakerFTD
SpeakerFTD's picture

This is imprecise due to quarterly versus annual data, but here is the annual federal deficit as a percentage of GDP for 2007 through 2011:

 

2007 1.15%

2008 3.19%

2009 10.13%

2010 8.90%

2011 8.69%

 

Compare that to 16ish quarters of spending after the previous peak in 2001

2001 -1.25%

2002 1.48%

2003 3.39%

2004 3.48%

2005 2.52%

The other recessions all back to 1973 seem to have similar patterns of deficit spending in the 2-3% of GDP range.   What is interesting is how different that spending pattern is in the days before Nixon ended the gold link.

The listed productions peaks before that (48, 53, 57, 60,69) all had spending patterns with almost no net new federal debt used to juice GDP.  For example (and all these years look similar):

1957 -1.15%

1958 0.01%

1959 1.59%

1960 -0.48%

1961 0.65%

 

Government spending #'s from here:

http://tinyurl.com/6rsnvmh

 

Fri, 04/06/2012 - 18:09 | 2323442 CrashisOptimistic
CrashisOptimistic's picture

Life was easier at $1.50 gasoline.

It will never be easy again.

Fri, 04/06/2012 - 12:46 | 2322419 1929agin
1929agin's picture

I believe Kyle Bass has stated that the G*8 Countries have added 15 "Fifteen" Trillion dollars of DEBT, in the last 3 years, to this Ponzi Scheme. What's a few more Trillion $$$.

Scary part,  is that so many label this as PONZI SCHEME and these are very smart people!

Media is in total ignore on the biggest "too big to fail".........

 

Fri, 04/06/2012 - 12:54 | 2322436 LowProfile
LowProfile's picture

 

Media is totally in the bag for the biggest "too big to fail".........

Fixed it.

Fri, 04/06/2012 - 13:20 | 2322515 FlyoverCountryS...
FlyoverCountrySchmuck's picture

"Media is totally in the bag for the biggest "too big to fail"........."

What was the dollar value of the ads you bought on NBC Networks last year?

What was the dollar value of the ads Goldman-Sach's purchased on NBC NEtworks last year?

What is the dollar value of the ads the Obama Campaign and it's associated cronies, groups are expected to purchase this year?

 

As Always, follow the money.

Fri, 04/06/2012 - 16:49 | 2323270 donsluck
donsluck's picture

The media doesn't matter in this case because we no longer live in a democracy. The legislature is not responsive, the executive is granting itself ever more powers and the judicial has become heavely pro-corporate and politicized. You only have limited power over your personal life, use it (I am sure you already do).

Fri, 04/06/2012 - 12:50 | 2322420 Sandmann
Sandmann's picture

I don't think you can compare this with previous "recessions" it has completely different quality. It is more akin to the 1873-1896 Depression in Europe after the US came on-stream flooding Europe with cheaper grain and leading to tariff-barriers going up to protect agriculture and then the US McKinley Tariff wreaking havoc in British textile exports. I think countries like China having tariff-free access to US and EU Markets without the burden of legal and welfare costs borne by Western producers, nor the environmental costs - has as Sir James Goldsmith wrote in "The Trap" destroyed the paradigm of high welfare provision and cheap goods.

http://www.amazon.com/The-Trap-James-Goldsmith/dp/0786701854

 

There is no way the Western Welfare Model can compete with Capitalist Serfdom in China and the pandering to Consumers has destroyed the ability of Western Workers to be Consumers without becoming Debtors. That game has a limited span.

I think we are not really in a Depression but have experienced a Step Change and the political class cannot accept it. When I visit supermarkets I know I am no longer able to pay the prices. I know exactly how Russians used to feel looking at Beriozka Shops or East Germans looking at InterShops where their rubbishy local currency bought nothing and only access to hard currency gave access.

I know life has changed permanently - maybe it is transient for me as I re-focus my efforts, but for most people lacking flexibility this is a New Paradigm and the Central Banks are wasting their time...and OURS - in a major game of throwing dust in our eyes pretending to be the Magicians, but they are cheap tricksters who have been rumbled.

 

 

 

Fri, 04/06/2012 - 12:56 | 2322441 LowProfile
LowProfile's picture

Actually, the closest analogy isn't economic, it's HISTORIC...

THE COLLAPSE OF THE SOVIET EMPIRE.

Fri, 04/06/2012 - 16:58 | 2323291 Not Too Important
Not Too Important's picture

The collapse of every empire. They never get it right. They know how, but eventually they all choose not to.

Fri, 04/06/2012 - 19:43 | 2323657 UP Forester
UP Forester's picture

Thing is, after the Soviet collapse, they used DMs, USDs, Francs and such as money.

I don't think we'll be as lucky.  What are most folks going to use, Loonies? Pesos?  Yen?  Kidneys?

Fri, 04/06/2012 - 19:51 | 2323676 Not Too Important
Not Too Important's picture

Barter or die.

Fri, 04/06/2012 - 14:30 | 2322822 mholzman
mholzman's picture

Excellent info Sandmann. I think comparison is helpful, yours very well researched. Yet comparison is nevertheless a modeling mechanism. I personally believe that the definitions used in economics are antiquated. Why is a house an asset? Even if paid for, it still belongs to the government because there are significant property taxes and restrictions.

An IBM mainframe in the 1960's was also an asset. Today and at an exponential decrease in cost, there is more computing power in a calculator. There are multiple new industries. There is a whole new way of living. That is wealth........ Until the power goes out.

Fri, 04/06/2012 - 15:01 | 2322966 Westcoastliberal
Westcoastliberal's picture

I hear you Sandman but instead of the political class not accepting it, I venture to say the political class invented it.  That's why they continue to profess the necessity of "austerity" without any consideration of a different approach.  "Austerity" is only neccessary if the bondholders take no losses; it's only one of many alternatives we have to get out of this mess both domestically and globally.  It doesn't have to be this way.  Let the 1/10th of 1% take it in the ass, personally I could really give a shit and I doubt most of us "regular folks" do either.  It's the "political class" that is forcing this turd sandwich down our throats, IMHO.

Fri, 04/06/2012 - 18:13 | 2323454 CrashisOptimistic
CrashisOptimistic's picture

You're right at the start.  You cannot compare this to previous events.

You're wrong about the rest.

There was infinite oil in the past.  Never again.

Fri, 04/06/2012 - 19:01 | 2323573 TheGardener
TheGardener's picture

INTERSHOP , the stock, was a good scam well after NASDAQ
imploded. Rubbishy local currency buys nothing these days,
but with no hard currency left, soft currencies or the proxies thereof will buy a decent supply of booze and pussy.

Fri, 04/06/2012 - 19:50 | 2323675 WmMcK
WmMcK's picture

When will we again be ready for 50% import tariffs and the next "Napoleon of Protection"? Await my return -- hard money will triumph.

Fri, 04/06/2012 - 12:57 | 2322446 tony bonn
tony bonn's picture

short sweet and to the point...yes there is no recovery and will be none....the bush crime syndicate and rockefeller axis of evil went all out to produce a permanent reduction in the usa's standard of living and economy to favor the red chinese...

it is the height of evil and arrogance to pronounce economic recovery with no material recovery in employment....

the economic crisis provided cover for a mass rape of the treasury and tax payer....trillions for banksters but not one red cent for americans...

Fri, 04/06/2012 - 13:25 | 2322531 rosiescenario
rosiescenario's picture

I am not really into conspiracies since they require smart people to engineer them, a quality noticeably lacking in our current 'leaders', but it is ironic that the Brown & Root Div. of Haliburton was one of the biggest Vietnam War profiteers while a Texan was in the WH and then with Bush and Chaney they get the first no-bid name your price contract to come out of Iraq and finally they are getting to build some sort of new concentration camp for Home Security, as announced a few days ago.

Fri, 04/06/2012 - 20:35 | 2323783 Not Too Important
Not Too Important's picture

800+ camps already built, by state:

http://educate-yourself.org/cn/femaconcentrationcamplocations07sep05.shtml

Started back before Y2K, and never stopped building. ZeroHedge is the Red Pill.

 

Fri, 04/06/2012 - 16:37 | 2323240 Not Too Important
Not Too Important's picture

It doesn't favor the Red Chinese. It favors them. That's the whole plan. They'd kill all the Chinese, and everyone else, if they could, as long as they profited from it. This is what the Red Chinese are running away from. Along with everyone else. The US/EU axis is a contagious cancer on all their economies.

And they're not really Red. Kind of a nice brown when the sun comes out. Now, British at the beach are red.

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