Chart Of "The US Recovery": Third Time Is The Charm, Or Head And Shoulders Time?

Tyler Durden's picture

The following chart from Bank of America captures the past three years of American "recovery" quite starkly: the US economy, as measured by the ISM  has so far not double but triple dipped, and the result would have been far more pronounced had the Fed not stepped in after each of the prior two local maxima and injected trillions into the economy. Following peaks in mid 2010 and early 2011, we are "there" again - how long until the Fed has to jump in? And would it have already done so if it wasn't an election year? Which brings us to our question: third time is the charm? Or head and shoulders?

Here is Bank of America's narrative:

By some accounts, the US economy has entered a “sweet spot” of self-reinforcing cycles. In this narrative, job growth is spurring income, boosting  spending and the cycle repeats. Stronger economic news, in turn, boosts asset prices, reinforcing the positive cycle of spending, income and jobs. As a result, optimists argue, the US has returned to its traditional role of leading a global cyclical recovery. This is the third time we have heard this argument during this recovery.

Nothing like a little Bank of America snark for a change. As for those who see the US economy entering a 'self-reinforcing cycle', we have news: recall that two weeks ago none other than JPMorgan found that central planning and the current administration have broken the virtuous cycle, which means that the only option for America is to keep injecting more and more and more diminishing returns liquidity to keep a broken system afloat, until no more can be injected.

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watmann's picture

Watch for major layoff announcement from BofA as they have to save thier way to profitibility becasue they cant earn the way

GetZeeGold's picture



8.2 unemployment with 88 million out of the workforce.


Almost there.


ArkansasAngie's picture

Romney likes the bailouts and the Fed, too ... so I say another stick save.

What's a few cyber ones and zeros

ElvisDog's picture

Is it too much to hope for that the Republicans pull their heads out of their asses and realize that Romney can't win the election no matter what happens before November? Recent history wouldn't suggest so (e.g. Bob Dole in 1996). I have this crazy dream of an open Republican convention.


if the market tanks it won't matter who is running against Il Duce.   The repubs will win in that case and then will be in charge of the disintegration of the greatest republic in history.  We are screwed and it won'r matter who is in the wheelhouse.  Every man for himself. Abandon ship

Yardfarmer's picture

too rigged to bail.

Jason T's picture

Magic money tree curtiousy of the Father of Lies himself says its time to pay up.  

Undecided's picture

Dandruf bitchez!

Death and Gravity's picture

Would you like some Head & Shoulders for that ... condition, Sir?

Race Car Driver's picture

That damn flaking and itching....

Silverhog's picture

BofA is a garbage hole. I moved to a locally owned bank, much happier.

knukles's picture

Eerily strange and distant culture, mood in BoA facilities in my neighborhood.
The places seem cold, impersonal (more so than most any banks I've ever been in) austere, almost like a dentention facility.
Grossly impersonal.

KCMLO's picture

I knew quite a few underwriters from their mortgage division.  The employees of BoA are living the depression nightmare.  At least the unemployed know they're unemployed.  Their situation, while horrific in itself, does not have the constant spectre of unemployment looming.  BoA treats their employees worse than garbage and constantly hangs mass layoffs over their head.  I would probably be a bit despondent if I worked there too.  Then there's also those that are a bit more aware inside that company that have to deal with the reality that they work for the Devil but can't see a way to work somewhere else that's any better.  I was stuck in the same loop for quite a while myself.

Charles Wilson's picture

Please remember, folks, that Bernankoid looks at this chart with pride.  "We've moderated the worst of the Depression as the Captured Monetarists said would happen."

Looking for Money Heroin?  Less and less everyday.  That's the point.  The money "on the sidelines" will have to show itself sometime and then the M1 - M2 charade will play itself out.  Rather than a Great Depression that lasts a year or two, the moderated recessions will last for at least a decade.

Bernankoid: "Told ya so!"


ArkansasAngie's picture

I sure as heck hope you're wrong.  By then the redistribution of wealth will be complete and the 1%'ers wil have it all.

Regime change starts at home.

Village Smithy's picture

You both make excellent points. It's scary.

knukles's picture

Looks to me like the Mother of All Head and Shoulders, meaning the next BIG leg of the downside run is about to commence.
Shades of the Great Depression.
Don't forget,,,, we got some real stinkers in the Fiscal policy mix coming up.  Increased taxes (major as a %ge increase) and automatic/expiring spending (Haha) that should provide some really nice fiscal drag
Seasonals and weather gonna make it seem like the Economy should join The Situation in rehab.
The ratings agencies were spot on about Why America Should Be Downgraded (DC Dysfunction and not of the penis type) as exemplified by Egan Jones (Big Gold Star)
And all that radioactive shite is gonna start floating up on the beaches.... 
Watch out for a More depressing mood
Nah, it's gonna seem pretty fugly.
And the great proctor of the Depression will have no alternative but to print, print, print.

Say, BTW, how does Timmah find the time to sign all of those new FRN's... or is that another casse of ROBOSIGNING?


Nobody For President's picture

Knucles, I hate to break it to you, but your excellent analysis (Summary: It's gonna get worse before it gets worse) will NOT get you a position on CNBC 'news'...

(And you didn't even mention Iran.)

MacroAndCheese's picture

Where ISM goes, so go jobs:


i-dog's picture

Are you sure ISM is reporting on planet Earth?

"They indicate that increased discretionary spending reflects the increased confidence level of businesses and consumers."

slaughterer's picture

It's 2008 all over again... And it's only 2012. 

monopoly's picture

I don't imagine that anyone here has confetti with any of the broken, insolvent corrupt TBTF banks. That makes 0 sense, especially when there are local small banks and credit unions who want your business and are sound. Left Wells years ago. Could care less if they all fold.

It sure seems like this market wants to go down. But we need the leaders to...."lead the way". Perfect chart.

NotApplicable's picture

Looks like a floor to me!

99th floor, that is.

I should be working's picture

End of QE1

End of QE2 

End of Twist

Imagine that the economy slows down when the free money from nowhere stops?

Shizzmoney's picture

Imagine that the economy slows down when the free money from nowhere stops?

Feel real bad for all the suckers who have their cash in big banks.

If you can't spot the sucker at the table.......

daxtonbrown's picture

How the hell can you have a recovery when the participation rate continues to crater? And gasoline usage falls like a rock? Those charts sober you up fast from all this green shoots euphoria.

worbsid's picture

When one looks at the futurnamics chart of percent of population employment, it is obvious that we are now making enough money that our wives do not have to work and can stay at home and raise the children same as in the 50's.  /sarc

rosiescenario's picture

"11:13 AM Harley-Davidson (HOG +1%) shares are raised to Buy from Neutral with a $55 price target, up from $50, at Citigroup, which cites expectations of rising motorcycle sales in an improving economy. HOG's U.S. retail sales are up 15%-17% in Q1, Citi estimates, after Q4's 11.8% rise; retail inventory levels are fairly tight, which should help keep used bike prices up. [Consumer] Comment!"


If folks are buying expensive toys (and not paying for them via the prior home equity tap) does that mean the economy might be better than we think it is?


Or does Citi have a problem?

Nage42's picture

Could be a lot of 40-something out of work bankers put a hog on their credit card and just decided to go all "On the road" till end-game, throw in some Art of the Gun to earn some road money...?


blueridgeviews's picture

When is it impossible for a central bank to infuse more capital? Personally, I though it would have happened already.

hotrod's picture

Maybe third time is a charm.

But the story was bullshit. In terms of full time employment, March was a blockbuster, gargantuan positive month. Nothing in the past dozen Marches even comes close to last month’s gain. Full time jobs increased by 1.3 million in March versus February. Compare that to March 2011, which was up by 455,000. In 2010, when the economy was rebounding from the depression low, March was up by 777,000. The average gain in March, which is virtually always a positive month, was 300,600 over the 10 years from 2002 to 2011. Excluding the recession figure of -732,000 in March 2009, the average was 421,000. This year was triple that.

OK, so it was the weather, I thought. We all know about the warm weather in March. I figured the best indicator of that would be construction jobs. I checked, and they weren’t up any more than any other year. If the weather were responsible for the jump, it should have shown up in construction jobs, and it didn’t. So, sorry, you can’t explain away this number by the weather.