Charting The Global Perfect Storm And SocGen's Economic "Stall Speed" Matrix

Tyler Durden's picture

Zero Hedge first mentioned the phrase "stall speed" while discussing the Q1 US GDP, which we predicted would translate into a disappointing print for Q2, eventually leading to a negative number in Q4. This was about 4 months ago. Since then our GDP prediction has been validated, but we had yet had to see "stalling" make the vernacular. That has now changed, following the release of a brand news report by SocGen which focuses on the phenomenon of... global stall speed and how specifically this is affecting the key investment verticals around the world as well as what the possible policy responses are. But perhaps more interesting is SocGen's succinct explanation of how the world now finds itself in a global perfect storm, and whose ending will likely be very much comparable to that of the eponymous movie starring George Clooney.

Below is the latest stall speed matrix from Michala Marcussen:

But perhaps more interesting is this summary chart which shows just how the US and Europe found themsleves in a perfect, self-sustaining storm, from which there increasingly appears to be no way out.

SocGen's comment:

A perfect storm hit this summer and, as a result, the US and Europe are growing at near-stall speed. Outright recession, however, needs a trigger, which we believe will remain absent. But, taming burgeoning public debts on both sides of the Atlantic will take time and we forecast a prolonged period of slow growth for both the US and Europe, particularly as the dynamic emerging economies slow to more sustainable growth rates. Most critical to our outlook is the assumption that the euro area will move quickly to ratify the new powers of the EFSF and deliver additional measures to underpin confidence in the EMU. In the US, we assume that the expiry of the payroll tax cuts and extended benefits will both be postponed to end-2012. Finally, we expect G4 central banks to deliver an extended period of low rates. We see the first rate hike from the BoE only in early 2013, followed by the ECB in late 2013, the Fed in early 2015 and the BoJ only in 2016.

SocGen is right about one thing: the recession trigger is absent because the depressionary trigger is going gangbusters. When can we stop pretending the Fed-inspired bear market rally, which translated in a small blip in global GDP was nothing but a small hump in the depression started back in 2007 and likely to continue for many more years?

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Mongo's picture

As I see those spinning arrows I think of helicopter Ben and his chumps.

prophet's picture

Stall speed from 9/24/2007

"Suddenly a Good Bear Is Hard to Find as Stocks Rise"  

Gandalf6900's picture

Starring George Clooney

Thomas's picture

An equity investor, a guy on a high wire act, and third getting orally serviced by a 90-year-old hooker are all thinking the same thing: Don't look down.

jeff montanye's picture

sometimes looking up can be tricky too.  (page down and click on big wave scene).

greased up deaf guy's picture

yes, we're still waiting on a "trigger" before heading back into recession. what were the unemployment rate, underemployment rate, gdp, national average house prices, national debt, etc., when the last one ended again? fools.

CH1's picture

Yeah, I love these "accepted wisdom" comments "Recession needs a trigger." SAYS WHO?   BASED UPON WHAT?

ISEEIT's picture

Despair not for the teleprompter is werking feverishly on a non partisan plan to rescue the ponzi. Farcism must prevail!

kito's picture

what the f is wrong with silver!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! not moving up!!!!!!!!!!!!!!!!!!!

greased up deaf guy's picture

no complaints here. i'm still kicking myself for not loading up on thursday and will be happy to be given another opportunity.

surfersd's picture

Eric Sprott is calling for $80. Janzsen of itulip is thinking $25 by year end. Both smart guys, pick your poison. Go read the most recent itulip (need to subscribe to read the PM part though)

snowball777's picture

Split the difference...$52.5

Sudden Debt's picture

The central banks are buying up every supply of WD-40 in the world to oil their presses BECAUSE THEY'LL NEED IT!



LawsofPhysics's picture


narapoiddyslexia's picture

From the WD-40 web site - "WD-40, everyone's favorite multi-purpose problem solver for over 50 years, cleans, lubricates and protects against corrosion." [Emphasis supplied.]



LawsofPhysics's picture

No, sorry fucknut.  I live in a real world where things actually have to get applied.  It might work on a doorknob, but go ahead and replace even a light grease with WD-40 in your next application.  Let us all know how that turns out for you.  WD-40 is indeed a much better solvent.  Don't believe everything you read.  Another shining example of the difference between knowledge and wisdom.

CH1's picture

Dude, get technical if you like, but lose the arrogance and the insults.

What is the point of insulting people? To prove your superiority?

Get over it while you still can.

Fish Gone Bad's picture

There seem to be a lot of people who for some fucked up reason, believe everything they are told, and perhaps everything they read.  Maybe they were told how special they were as children, and how their opinion mattered.  Then again, maybe their father's didn't give them enough hugs.  It is almost like people think think this is the "New Myspace". 


IronShield's picture

You don't get out much, do ya?

Monedas's picture

WD 40 is a lubricant like KY helps you get your nuts off ! Monedas 2011 has just enough PMs to float his marvelous, uniquely American personality !

Rich V's picture

I'm long on KY jelly, most people don't like to be dry humped.....

HyperLazy's picture

Old School Blue Collar Recommendations:


Fuel Preservation and enhancement:

jhalmos's picture

MAN I wish this site's righthand column didn't always try to stand on top of all the charts when viewed on an iPad. FIX THAT.

greased up deaf guy's picture

it's not just ipads. it happens on any screen too small to handle everything at once.

StychoKiller's picture

My screen is 1920 by 1080 in size, and it still has what is an HMTL layout problem!

frenchie's picture


throw that iPoop away !

MayIMommaDogFace2theBananaPatch's picture


Clicking on PRINTER-FRIENDLY VERSION, (just below the article) seems to provide some satisfaction for most when they encounter this issue.

CH1's picture


You might try a "please" once in a while. Tyler doesn't owe you Jack Squat.

DefiantSurf's picture

Hows that ipad taste? I heard they taste just like chicken?


StychoKiller's picture

Sprinkle some gold dust on it for a new taste sensation! :>D

Hot Apple Pie's picture

I use Adblock with element hiding helper in Firefox, that let me get rid of the entire right hand column for just this reason.

sheeple2012's picture

Oblahma should move his "jobs speech" to tonight... oh wait, that would mean having to reschedule his 2 p.m. tee time, nevermind  

Mesquite's picture

Business Insider just got shut off...

Hmmm..New version of 'Rule 48' ??

It's getting messy...

Ok, It's back..

max2205's picture

2015?!?! WTF. I thought greenspan was a dumbass..... Geezzz

Half the people on soc sec will starve and die by then

LookingWithAmazement's picture

No problems at all. Tomorrow another day of rising markets, after some "less bad than expected" news. Wednesday Germany constitutional court rules - no rocking the boat. End of Sept: Merkel gets enough support for a new "rescue" package for Greece. Her cabinet will survive: no one has interest in elections. So. Forget the Fall. Up to Christmas. Boring world we live in.

falak pema's picture

Good to see you yawning on ZH. 

Btw : bankers never starve. They are the first class passengers on the Titanic.

LookingWithAmazement's picture

They have a lifeline hanging around their body, no matter how long is deemed necessary.

mcguire's picture

the good news is that price of "the dying of money" has come back down.. of course it was always free on pdf..

mcguire's picture

from the forward: "It was up to every citizen to learn for himself what was happening and to look out for himself if anyone was going to, because no one else was looking out for him.  The government certainly was not.  The government was compelled by its other duties not to protect him, but the opposite, to continue to steal from him by the inflation as long as it could."

Tao 4 the Show's picture

"the recession trigger is absent because the depressionary trigger is going gangbusters. When can we stop pretending the Fed-inspired bear market rally, which translated in a small blip in global GDP was nothing but a small hump in the depression started back in 2007 and likely to continue for many more years?"

Spot on!

I will only add the following: the answer to your (rhetorical) question is that the true, likely outcomes of all this are "Too Big To Face".

This is what TBTF should actually stand for.

gwar5's picture

The only eponymous George Clooney movie that comes to my mind is Homer's Odyssey set in the deep South, "O, Brother Where Art Thou?".  

Everett: "Tight spot! We're in a tight spot boys! Boys, this is a right spot!"


snowball777's picture

The Descendants

Good Night and Good Luck

The Thin Red Line



bb5's picture

How many think that Germany is going to eat PIIGS losses? Green--yes, red--no

Tao 4 the Show's picture

Brown. (red plus green)

And whatever they have to eat looks that color to the Germans.

Oh regional Indian's picture

Better question, if I may.

How many think Germany is going to eat the PIIGS?


Spastica Rex's picture

Schnitzel Wiener Art.. Nom Nom Nom

Oh regional Indian's picture

i like how these sinking, stinking banks pass judgement on the markets. Generally speaking, why would one pay any heed to a failing institution?

Oh, right, they pay a lot of money to people for coming up with pretty charts and graphs. 

Merde! All of it. Beau Merde!