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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veyron's picture

How did the FB IPO play work out Biderman?  Did you ever sell?

DoChenRollingBearing's picture

+ 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"

DoChenRollingBearing's picture

+ 1

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

DoChenRollingBearing's picture

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

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.


Ahmeexnal's picture

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

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...


monad's picture

Great rant. Have more children.

GMadScientist's picture

1972, but you're on the right track.

The Devil's picture

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

RyanW525's picture

I thought this was year 4 of the current depression?

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.

RyanW525's picture

Damn...i didnt know indoor plumbing completely ceased in the 1930's...

Newsboy's picture

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

caimen garou's picture

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

trebuchet's picture

Thats why they call it "double dip"

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.

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.  

Lucky Guesst's picture

Good, misery loves company :-)

sbenard's picture

John Hussman just made the same call!

HarryM's picture

Another recession , here comes another rally

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




fonzannoon's picture

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

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.

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.

TeMpTeK's picture

Biderman has aged 20 years since 2006

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.

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


GMadScientist's picture

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

BlueStreet's picture

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

GMadScientist's picture

I'm detecting a distinct doppler shift...

kralizec's picture

Ride the decline.

Like Slim Pickens on that missile...yeeeehaaaaaawww!

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?

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?

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.

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.

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...


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

Keith Piccirillo's picture



Good Hoyvin Glavin.

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!

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.

virgilcaine's picture

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

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!

JackT's picture

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