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Biderman: "We Are In The First Quarter Of The Next Recession"

Tyler Durden's picture




 

Rick Davis of The Consumer Metrics Institute plays Clark Kent to Charles Biderman's Superman as the two dig into just how manipulated and misreported the latest GDP data from the government was. Critically, they break down the components and using inflation levels (CPI-U or The BPP) that make some sense when considered with energy price movements during this quarter (as opposed to the deflator that was 'selected' by the BEA) Davis and Biderman are "really worried" that the real economy appears to be in a contractionary state if inflation is adjusted for correctly. Even the anemic 1.88% growth rate is 'very very poor' for an economy that is supposed to be 3 years into a recovery. The per-capita income (the money available to all households to spend) actually shrank - even using the BEA's inflation data. This juxtaposes shrinking household disposable income with a real economy supposedly growing (though slowly) which was driven almost exclusively by consumer spending - leaving Davis and Biderman questioning 'where this money is coming from?'. The simple answer is the savings rate has plunged, freeing up over $200bn in annual spending (and student loans have added another $100bn, refis $50bn, and strategic defaults $80bn) - all unsustainable one-time increases. This is what is really scary behind the GDP numbers. Spending is not coming from income. While much is made of the drop in spending driven by the fall in oil prices, Davis points out that the consumer is hitting a wall with his savings and concludes that the BEA is notoriously bad at calling turning points (only getting the Great Recession 'direction' correct after 16 months and magnitude after 40 months) - leaving him of the opinion that we may well be in the first quarter of the next recession.

 

 

 

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Fri, 06/08/2012 - 14:37 | 2508174 veyron
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How did the FB IPO play work out Biderman?  Did you ever sell?

Fri, 06/08/2012 - 14:40 | 2508190 DoChenRollingBearing
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+ 1 veyron, LOL

This is as good a place as any to mention that Ameru had its first "international" sale!

 

"Ameru's First International Sale"

Fri, 06/08/2012 - 14:42 | 2508199 King_of_simpletons
Fri, 06/08/2012 - 14:46 | 2508216 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1

I cashed in my IRA in late 2008.  Paid the txes and penalties.  But the money is now mine!

Fri, 06/08/2012 - 14:48 | 2508225 Magnix
Magnix's picture

as small as $1,000? LOL

Fri, 06/08/2012 - 15:35 | 2508385 DoChenRollingBearing
DoChenRollingBearing's picture

A lot more...  I'll just leave it at that.

Fri, 06/08/2012 - 15:59 | 2508461 5880
5880's picture

Great NPV math

Fri, 06/08/2012 - 16:21 | 2508565 B-rock
B-rock's picture

Trade the lies, not the truth.

Fri, 06/08/2012 - 16:47 | 2508678 JR
JR's picture

Many thieves unfortunately find a powerful partner in their activities - the enabler, the Congress of the United States. It's one thing to have a do-nothing Congress; it's quite another to have lawmakers acting as pimps - using us in order to ride around in limousines.

 

Fri, 06/08/2012 - 14:41 | 2508192 Ahmeexnal
Ahmeexnal's picture

QE(N+1) will send Fraudbook stocks soaring.....along with the price of a supersized Mac lunch.

Fri, 06/08/2012 - 17:51 | 2508895 Lester
Lester's picture

The USA has been in a Recession since 1992, if not 1988....

For almost 24yrs the deficit spending and off-the-books manipulation of government have disguised the Deliberate Starvation of the so-called American Buisiness Engine.  Remember Ross Perot's "sucking sound"?  That was the ABE sucking air since nothing else remained to make things "run".

America has been "throttled", like strangled.  It has been done Deliberately.

This is Depression.  Has been since 2007. If you backed-out all the government spending, and government influenced & gov't responsible spending, the fact of Depression is plain.

30,000,000 Americans on food assistance since 2009 with numbers rising about a million a month.   Not sign of a Depression to you?

In 2010, Big -0- removed 25% of the Dept of Agriculture "food stamp" funding to give that money to Several States that could not meet Teacher Payrolls.  How is that for Depression?

Now the One Way Fucks still talk austerity?

 

The Soft-Sell is the only sale.  Even on this site, you are being placated and fed pablum.  Not intentionally, maybe...  Demand for financial news is high (for some reason).  As if you can believe any of this bullshit! 

The American Depression of the 30s was a CAKE WALK compared to what is happening NOW In America.  50,000,000 on food stamps.  Trillions in Looted Give-Aways to fascist corporations, but the people whose taxes were used against them to ruin business and drop home equity values and eliminate jobs are now forgotten? 

Government Owed Citizens a DUE DILLIGENCE.  Government chose to murder the economy and slaughter its citizenry economically, socially, and morally.

Depression?  American Citizens are analogous to 30s & 40s European Jewry with the Betrayal, Fraud, and Intent To Abandon To Murder we face from our Government NOW!

Depression would be a Fucking Cakewalk this is an early stage genocide...

 

Sat, 06/09/2012 - 01:50 | 2509712 monad
monad's picture

Great rant. Have more children.

Sat, 06/09/2012 - 02:05 | 2509716 GMadScientist
GMadScientist's picture

1972, but you're on the right track.

Fri, 06/08/2012 - 14:37 | 2508175 The Devil
The Devil's picture

Just as planned Jamie and Ben.  The world will know when it's too late.  Rise my children!

Fri, 06/08/2012 - 14:40 | 2508187 RyanW525
RyanW525's picture

I thought this was year 4 of the current depression?

Fri, 06/08/2012 - 14:47 | 2508220 DoChenRollingBearing
DoChenRollingBearing's picture

I feel the same way, + 1

Fri, 06/08/2012 - 15:08 | 2508286 Shizzmoney
Shizzmoney's picture

No, it's year 5 of the Great Recession.....this actually started back in 2007, when at the beginning of the year, Hank Paulson said, "This is one of the more stronger economies I have ever seen."  Like George Constanza, think the opposite, and you'll get the real true answer.

It's not Great Depression 2.0, yet.  People are still getting benefits, welfare, and as my buddy Phil Auerswald told me, the showers and shitters are still working.

The day you wake up, and turn on the faucet and flush the toliet and get no response?  That's when you'll know we are in a Depression.

Fri, 06/08/2012 - 15:40 | 2508398 RyanW525
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Damn...i didnt know indoor plumbing completely ceased in the 1930's...

Fri, 06/08/2012 - 14:40 | 2508189 Newsboy
Newsboy's picture

Confirmation of recessionary second leg down will be released in a year, and will be irrelevant...

Fri, 06/08/2012 - 14:41 | 2508194 caimen garou
caimen garou's picture

I did'nt know we were out of the first recession.

Sat, 06/09/2012 - 09:30 | 2510002 trebuchet
trebuchet's picture

Thats why they call it "double dip"

Fri, 06/08/2012 - 14:41 | 2508196 Lucky Guesst
Lucky Guesst's picture

"we may well be in the first quarter of the next recession."

AKA for those not in banking, wall street or the public sector.... the last recession.

Fri, 06/08/2012 - 16:16 | 2508551 Rockfish
Rockfish's picture

AKA for those not in banking, wall street or the public sector..

If you mean the rest of us? 85%.  I can not agree more.  But taked heart that other 15% will be joining us soon.  

Fri, 06/08/2012 - 17:40 | 2508863 Lucky Guesst
Lucky Guesst's picture

Good, misery loves company :-)

Fri, 06/08/2012 - 14:42 | 2508200 sbenard
sbenard's picture

John Hussman just made the same call!

Fri, 06/08/2012 - 17:32 | 2508838 HarryM
HarryM's picture

Another recession , here comes another rally

People will be eating each other and the DOW will be at 14000

 

 

 

Fri, 06/08/2012 - 14:42 | 2508201 fonzannoon
fonzannoon's picture

For anyone not familiar with Biderman. I would love to see his Ben Stein letter to Schiff.

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

Fri, 06/08/2012 - 15:20 | 2508318 Shizzmoney
Shizzmoney's picture

I miss that Peter Schiff, when he opted to talk more sense and numbers, rather than now with his hackney "Obama sucks....regulations...maw maw maw" jive that really is just a projection about the complaint of his higher end clinets.

Schiff's fundamentals are there, and he knows his stuff....he just is so willing to wave the GOP flag and not understand that what's good for him, isn't necessiarily good for the people. 

It is funny the guy recommends buying gold/silver everytime a toaster oven pops up, though.

Sat, 06/09/2012 - 02:25 | 2509727 GMadScientist
GMadScientist's picture

'Zactly...a smart guy that is too annoying to lsten to for most folks.

He also has a distinct air of used-car salesman about him.

Fri, 06/08/2012 - 17:56 | 2508906 TeMpTeK
TeMpTeK's picture

Biderman has aged 20 years since 2006

Fri, 06/08/2012 - 14:42 | 2508202 adr
adr's picture

What cracked me up was a Yahoo finance article writing about how Gen Y and the millenials are going to go rushing head on into stocks.

WITH WHAT? Iou's? Magic fairy dust?

Beyond the anemic disposable income used on disposable crap, anyone under 30 doesn't have a spare dime to throw in the stock market.

Fri, 06/08/2012 - 15:32 | 2508376 ReactionToClose...
ReactionToClosedMinds's picture

it took me a long while to conclude that YahooFinance is weak and semi-always-bullish hypesters.

In fact, even though most Amerikans probably get their 'news' now from Yahoo, I'm concluding they are pretty shoddy .. news, finance and especially sports

 

Fri, 06/08/2012 - 15:56 | 2508446 therearetoomany...
therearetoomanyidiots's picture

That's why I follow Cramer

Fri, 06/08/2012 - 15:56 | 2508443 therearetoomany...
therearetoomanyidiots's picture

O'blunder's 3000  bucks

Sat, 06/09/2012 - 02:27 | 2509732 GMadScientist
GMadScientist's picture

They trust they'll grow up, sell out, and turn off right arm schedule.

Fri, 06/08/2012 - 14:43 | 2508204 BlueStreet
BlueStreet's picture

The second quarter will happen in the spring of 2013, third quarter in the spring of 2014, etc. 

Sat, 06/09/2012 - 02:28 | 2509733 GMadScientist
GMadScientist's picture

I'm detecting a distinct doppler shift...

Fri, 06/08/2012 - 14:44 | 2508206 kralizec
kralizec's picture

Ride the decline.

Like Slim Pickens on that missile...yeeeehaaaaaawww!

Fri, 06/08/2012 - 14:44 | 2508209 disabledvet
disabledvet's picture

I already questioned this ethos at Econ monitor. (good site btw.) how are their numbers better than the government's again? Anywho I can understand how if prices are falling 2% growth can have a "rock star quality" to it. And of course I can understand how their version of reality sounds good to them too. How many people say "their version of reality is bad for them" again?

Fri, 06/08/2012 - 14:51 | 2508231 Dr. Engali
Dr. Engali's picture

Biderman: "We Are In The First Quarter Of The Next Recession"

 

So does that mean we are out of the depression that started in 2000?

Fri, 06/08/2012 - 14:51 | 2508233 SmoothCoolSmoke
SmoothCoolSmoke's picture

Dow did not get the memo, at least today.   I've seem some BS up-days but this one may take the cake.

Fri, 06/08/2012 - 14:54 | 2508244 fonzannoon
fonzannoon's picture

Dude no joke. All major indices up, oil down, dollar up and treasuries and gold just sittin on the sidelines. Ben hit this one 275 down the middle today. Wow.

Fri, 06/08/2012 - 14:56 | 2508253 docj
docj's picture

Yep - global economy swirling the bowl (again, 4-years on, now), not even a hint of even a BS solution out of EU or Benron, we're broker than ever...

... I THINKS I'LL GO AN BUY ME SOME STOCKS!!!

Yep, perfectly functioning, normal, rational "market" we have there.

Fri, 06/08/2012 - 15:17 | 2508301 Keith Piccirillo
Keith Piccirillo's picture

@docj:

Mm-Hey!

Good Hoyvin Glavin.

Sat, 06/09/2012 - 02:29 | 2509736 GMadScientist
GMadScientist's picture

Chum.

Fri, 06/08/2012 - 14:52 | 2508234 sbenard
sbenard's picture

Good info in the video! I didn't know that manipulated inflation data is a manipulation method to concoct GDP. It's much worse than I imagined! Thanks for posting this!

Meanwhile, stocks continue in their bubble! Wall St is having another Pollyanna Party!

Fri, 06/08/2012 - 15:05 | 2508279 Jlmadyson
Jlmadyson's picture

BEA a complete joke confirmed. As many of us have said all along it will all come back around making 08 look really good in comparison.

Fri, 06/08/2012 - 15:11 | 2508290 virgilcaine
virgilcaine's picture

Close will be red.  Alot can happen over a weekend.

Fri, 06/08/2012 - 15:11 | 2508291 slewie the pi-rat
slewie the pi-rat's picture

you gotta be wasted just to write that great intro, tyler

when you go with the gusto: Spending is not coming from income.  i'm afraid you might confuse the noobies who will wonder:  wtf?  consumer spending?  goobermint spending?  or (gasp) ...both?

in a recession?

don't stop now!

Fri, 06/08/2012 - 15:26 | 2508346 JackT
JackT's picture

Why didn't you include Part 2 of the discussion?

Fri, 06/08/2012 - 15:29 | 2508359 ReactionToClose...
ReactionToClosedMinds's picture

I'm surprised no one has made a bigger deal of what Barron's reported 2 weeks ago via their weekly statistics tables catch.  After some considerbale examination of drop in electric power use .... they dug in deeper and it was clear that for some 'mystreious' reason, electrical use is off 1.5% ... which is a lot.  After every possible explanation ... the obvious question to anyone, which they tried to understate, was that a recession may already have started

Fri, 06/08/2012 - 15:39 | 2508396 slewie the pi-rat
slewie the pi-rat's picture

1.5% over what period of time?

do you mean to tell us that power usage has gone down since people took down the holiday lighting and the sunlight lengthened & strengthened? 

and those new $7 light bulbs and low-amp everythings actually work?

and that we're in a...  recession?  yup!    ZIRP4evah!  L0L!!!

Fri, 06/08/2012 - 20:48 | 2509355 ReactionToClose...
ReactionToClosedMinds's picture

they factored in max impact of new light bulbs & energy efficient appliances.

The power drop is last few months.  Barron's reports a lot of econ activity statistics.  The Statistics Editor and a reader caught the unexplained recent drop off.

This is not some bogus argument.  As far as I'm concerned this is one of those instances where you have what everyone says they want ...actionable data.  Yet this intriguing piece gets a big yawn.  I guess my mind is weak compared to the hedge fund trading titans.

In fact I wouold have thought ZH would have picked up on this immediately as this some hard evidence to back up ECRI's view

Sat, 06/09/2012 - 01:22 | 2509686 slewie the pi-rat
slewie the pi-rat's picture

who cares about ECRI's views?  this is zH

actionable data?  this is zH

we've been in a recession since 2Q 2011 as far as i've been able to tell;  ive been saying so for over a year;  tyler hasn't argued has he?  rosie? 

so now people are starting to notice and it is actionable?

Hahaha! 

b/c electric use is down?  L0L!!!  of course we're in a recession!  are you fuking mad?

you're not on cNBC dude!  this is zeroHedge!!!  adjusted for inflation we have been in a recession for a fuking year+ and that means:  yup!  we are in a recession right NOW!

you've been here the whole year, man

congratulations!  you figured out we're in a recession all by yerself!  L0L!!!

Fri, 06/08/2012 - 15:38 | 2508392 ebworthen
ebworthen's picture

Isn't spending what you don't have the government/bank/corporation model?

Even dumb monkeys and dim-witted sheep can mimic observed behavior

Fri, 06/08/2012 - 15:48 | 2508426 slewie the pi-rat
slewie the pi-rat's picture

hey, eb!

actually, i'm getting indications that the goobermint/bankster/corpofascist model has gone to:  survival, BiCheZ!

so yes:   Even dumb monkeys and dim-witted sheep can mimic observed behavior

unfortunately, they have neither precedent, nor practice to guide them, so it is just a cartoon of FED-watching pryamids of competing commercial, social, and political IOU-based interisks, olivsk

Fri, 06/08/2012 - 18:53 | 2509092 Pretorian
Pretorian's picture

Biderman next move is puffing the magic dargon! Watch out for more hardcore clips to come.

Sat, 06/09/2012 - 08:03 | 2509929 falak pema
falak pema's picture

recession is like secession, never accepted by the majority; those who are politically correct. "We are not in recession we are in deleveraging, its not the same thing." Really? All deleveraging means is that the socialisation of debt continues, the privatisation of profits as well. This guy Usmanov made a killing from Faceflop, where all other late comers, got sucked by the scam. That's globalisation sleight of hand and market deleveraging working hand in hand,"you lose suckers, we win as Oligarchs, we know how to read between the lines!"

 If the market is in obsession with avoiding recession, if the obsession becomes paranoid and voids the  checks and balances, to feed the money printing asteroid as it bursts not the fiat bubble but more honest labour toil to feed the unemployment cauldron worldwide, negating reality in absurd virtuality, we will all  cry secession to Oligarchy possession of our real lives. A poet of the absurd becomes a patriot of the untold truth, a nemesis of the blatant lie. 

Sat, 06/09/2012 - 19:26 | 2511151 AgentOfNaturalS...
AgentOfNaturalSelection's picture

Has anybody ever calculated what the average person under 34, millenials I suppose, are being taxed?

Medicare/social security+payroll taxes+student loans= I am going to cut open a fat old person like a tauntaun and sleep inside him when things get scary, because I PAID for that fat; mother fucker.

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