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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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Mon, 09/05/2011 - 11:35 | 1634560 Mongo
Mongo's picture

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

Mon, 09/05/2011 - 17:08 | 1635858 prophet
prophet's picture

Stall speed from 9/24/2007

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aWu8b4y2Ixs0

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

Mon, 09/05/2011 - 11:38 | 1634566 Gandalf6900
Gandalf6900's picture

Starring George Clooney

Mon, 09/05/2011 - 11:54 | 1634633 Derpin USA
Derpin USA's picture

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

Looks down.

Looks up.

"We're fucked."

Mon, 09/05/2011 - 13:45 | 1635006 Thomas
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.

Mon, 09/05/2011 - 13:58 | 1635036 jeff montanye
jeff montanye's picture

sometimes looking up can be tricky too.  http://www.youtube.com/movie?v=FOhoF3WgsBs  (page down and click on big wave scene).

Mon, 09/05/2011 - 11:42 | 1634569 greased up deaf guy
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.

Mon, 09/05/2011 - 12:21 | 1634729 CH1
CH1's picture

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

Mon, 09/05/2011 - 11:41 | 1634579 ISEEIT
ISEEIT's picture

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

Mon, 09/05/2011 - 11:41 | 1634581 kito
kito's picture

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

Mon, 09/05/2011 - 11:45 | 1634597 greased up deaf guy
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.

Mon, 09/05/2011 - 12:54 | 1634838 surfersd
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)

Mon, 09/05/2011 - 14:56 | 1635372 snowball777
snowball777's picture

Split the difference...$52.5

Mon, 09/05/2011 - 11:42 | 1634584 Sudden Debt
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!

 

 

Mon, 09/05/2011 - 11:52 | 1634624 LawsofPhysics
LawsofPhysics's picture

WD-40 IS NOT A LUBRICANT!  IDIOTS!

Mon, 09/05/2011 - 12:13 | 1634701 narapoiddyslexia
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.]

Sorry.

See http://www.wd40.com/uses-tips/

Mon, 09/05/2011 - 12:17 | 1634719 LawsofPhysics
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.

Mon, 09/05/2011 - 12:24 | 1634741 CH1
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.

Mon, 09/05/2011 - 12:43 | 1634798 Fish Gone Bad
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". 

 

Mon, 09/05/2011 - 12:29 | 1634758 IronShield
IronShield's picture

You don't get out much, do ya?

Mon, 09/05/2011 - 12:47 | 1634814 Monedas
Monedas's picture

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

Mon, 09/05/2011 - 12:14 | 1634705 Spastica Rex
Spastica Rex's picture

But it's a great solvent.

Mon, 09/05/2011 - 12:15 | 1634706 Rich V
Rich V's picture

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

Mon, 09/05/2011 - 13:24 | 1634933 HyperLazy
HyperLazy's picture

Old School Blue Collar Recommendations:

Lubricant: http://www.kpg-industrial.com/products/711_the_protector_lubricant/

Fuel Preservation and enhancement: http://www.priproducts.com/

Mon, 09/05/2011 - 11:42 | 1634585 jhalmos
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.

Mon, 09/05/2011 - 11:44 | 1634594 greased up deaf guy
greased up deaf guy's picture

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

Mon, 09/05/2011 - 20:08 | 1636381 StychoKiller
StychoKiller's picture

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

Mon, 09/05/2011 - 11:45 | 1634596 Tim Knight from...
Tim Knight from Slope of Hope's picture

AMEN!

Mon, 09/05/2011 - 11:46 | 1634600 frenchie
frenchie's picture

lol

throw that iPoop away !

Mon, 09/05/2011 - 11:54 | 1634630 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

FIX THAT.

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

Mon, 09/05/2011 - 12:26 | 1634746 CH1
CH1's picture

FIX THAT.

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

Mon, 09/05/2011 - 12:39 | 1634790 DefiantSurf
DefiantSurf's picture

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

 

Mon, 09/05/2011 - 20:09 | 1636384 StychoKiller
StychoKiller's picture

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

Mon, 09/05/2011 - 14:43 | 1635314 Hot Apple Pie
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.

Mon, 09/05/2011 - 11:44 | 1634593 sheeple2012
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  

Mon, 09/05/2011 - 12:00 | 1634603 Mesquite
Mesquite's picture

Business Insider just got shut off...

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

It's getting messy...

Ok, It's back..

Mon, 09/05/2011 - 11:49 | 1634608 max2205
max2205's picture

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

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

Mon, 09/05/2011 - 11:51 | 1634616 LookingWithAmazement
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.

Mon, 09/05/2011 - 12:15 | 1634713 falak pema
falak pema's picture

Good to see you yawning on ZH. 

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

Mon, 09/05/2011 - 12:21 | 1634731 LookingWithAmazement
LookingWithAmazement's picture

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

Mon, 09/05/2011 - 11:51 | 1634621 mcguire
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.. 

http://www.hartgeld-forum.de/forum/files/dyingofmoney.pdf

Mon, 09/05/2011 - 12:00 | 1634666 mcguire
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."

Mon, 09/05/2011 - 11:55 | 1634638 Tao 4 the Show
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.

Mon, 09/05/2011 - 11:56 | 1634645 gwar5
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!"

 

Mon, 09/05/2011 - 15:02 | 1635406 snowball777
snowball777's picture

The Descendants

Good Night and Good Luck

The Thin Red Line

Gravity

 

Mon, 09/05/2011 - 11:58 | 1634654 bb5
bb5's picture

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

Mon, 09/05/2011 - 12:04 | 1634675 Tao 4 the Show
Tao 4 the Show's picture

Brown. (red plus green)

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

Mon, 09/05/2011 - 12:13 | 1634699 Oh regional Indian
Oh regional Indian's picture

Better question, if I may.

How many think Germany is going to eat the PIIGS?

V

Mon, 09/05/2011 - 12:16 | 1634718 Spastica Rex
Spastica Rex's picture

Schnitzel Wiener Art.. Nom Nom Nom

Mon, 09/05/2011 - 12:00 | 1634664 Oh regional Indian
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!

V

http://aadivaahan.wordpress.com/2011/03/09/axis-of-evil-doing/

Mon, 09/05/2011 - 12:00 | 1634665 Seer
Seer's picture

Once again, stating the obvious (and ONLY conclusion)...

Growth is DEAD.  What the hell do people think is going to happen when this realization sets in?

The great unwind of economies of scale (economies of scale in reverse) is going to be REALLY painful.

http://dieoff.org/page125.htm refer to Figure 1.

Mon, 09/05/2011 - 12:14 | 1634702 RSloane
RSloane's picture

Do not worry!! The Chinese will soon be demanding a 35' flat screen TV in each room, a new car they can't afford, and buying houses without income consideration. We will be saved!

Mon, 09/05/2011 - 12:24 | 1634738 Miss Expectations
Miss Expectations's picture

Ah yes, George Clooney...the road to hell...

But he quickly learned the dangers of just dropping in on a humanitarian crisis: as a way of giving back to a refugee village where he and his father stayed, he donated money to build a well, huts, and a community center. “A year later, the next-door villagers—who wanted water and needed shelter—ended up killing some of the people to get to that well and to get to that shelter,” Clooney says, his voice trailing off. “It’s devastating. Your response is … to continue to try to help, but we have to be very careful—and sometimes helping is not throwing money at a problem.”

http://www.thedailybeast.com/newsweek/2011/02/20/a-21st-century-statesma...

Mon, 09/05/2011 - 13:03 | 1634862 Fish Gone Bad
Fish Gone Bad's picture

I was listening to the Tavis Smiley show late night on NPR.  I fucking hate that show.  Anyway, the radio was out of reach and thought I would fall asleep soon enough.  The show was about the plight of "people of color", in particular, how black people have been treated badly.  All I could think of was how really badly the native Americans have REALLY REALLY been treated badly.  Most live in abject poverty.  The United States made treaty after treaty with them, and broke the treaties.  The United States even declared war against the native Americans.  If George Clooney wants to go to Sudan and help out poor people of color, good for him.  There are lots and lots of people in need all over the place.

Fish Gone Bad

Mon, 09/05/2011 - 12:24 | 1634739 Mike2756
Mike2756's picture

If we're on the 13 year schedule, only 9 more to go!

Mon, 09/05/2011 - 12:51 | 1634828 Seer
Seer's picture

It's going to keep on keepin on...  Slinky down the staircase: economies of scale in reverse will keep dragging things down until we're more in sync with nature's "bounty."

Mon, 09/05/2011 - 12:26 | 1634745 tricklecreek
tricklecreek's picture

eat a pound of butter and drink a 12 pack,, then at least something productive will go on tomorrow

 

Mon, 09/05/2011 - 12:49 | 1634824 Fix It Again Timmy
Fix It Again Timmy's picture

Speaking of lubricants - nothing beats this:

http://www.nuruslide.com/

 

Mon, 09/05/2011 - 12:58 | 1634849 Monedas
Monedas's picture

Clooney is a slut......his mom was a hose monster ! Monedas 2011 She could sing while gargling dick ! Mongolian throat singers got nothin' on her !

Mon, 09/05/2011 - 13:03 | 1634860 FoieGras
FoieGras's picture

Wouldn't it be ironic if the trigger that pushes us into a deep recession would be the failure of SocGen themselves. Oh that would be one for the history books.

Mon, 09/05/2011 - 13:27 | 1634943 tkinfo
tkinfo's picture

It isn't just about SocGen, it is about every major money center commercial and investment bank in Europe and the US going down. Two terrible mistakes of Credit Analysis on both sides of the pond. Sovereign debt in Europe, MBS' in the US. Where did all of the nonperforming debt end up? In the banks. Is there enough government borrowing capacity left to reflate the banks? No.

We are looking at a once and complete failure of the banking system. No one, not even the most politically connected banking institutions will remain standing. Our hedge fund has been short banks and brokers internationally since the end of 2007 with a considerable leveraging up in early June and we expect we'll never cover the positions but let them expire along the lines of Unicredit and the dreg banks of Greece. Also, as a hedge against central bankers, half of the fund remains in gold. We continue to add to both our short and long positions.

The depressionary effects are buried deep in the Repo markets as asset values continue to fall, this is ultimately what takes out the banking system itself.

http://www.thebeareconomy.com

Mon, 09/05/2011 - 13:56 | 1635044 Payable on Death
Payable on Death's picture

Is it contradictory to believe in deflation and to own gold, as the shiny stuff is an inflation hedge?

Mon, 09/05/2011 - 15:14 | 1635471 snowball777
snowball777's picture

Depends on when you bought the gold.

Mon, 09/05/2011 - 15:23 | 1635507 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Gold is a hedge against inflation and deflation. Since it will be deflation in the future. The shiny stuff will help.

Mon, 09/05/2011 - 13:27 | 1634944 tkinfo
tkinfo's picture

It isn't just about SocGen, it is about every major money center commercial and investment bank in Europe and the US going down. Two terrible mistakes of Credit Analysis on both sides of the pond. Sovereign debt in Europe, MBS' in the US. Where did all of the nonperforming debt end up? In the banks. Is there enough government borrowing capacity left to reflate the banks? No.

We are looking at a once and complete failure of the banking system. No one, not even the most politically connected banking institutions will remain standing. Our hedge fund has been short banks and brokers internationally since the end of 2007 with a considerable leveraging up in early June and we expect we'll never cover the positions but let them expire along the lines of Unicredit and the dreg banks of Greece. Also, as a hedge against central bankers, half of the fund remains in gold. We continue to add to both our short and long positions.

The depressionary effects are buried deep in the Repo markets as asset values continue to fall, this is ultimately what takes out the banking system itself.

http://www.thebeareconomy.com

Mon, 09/05/2011 - 15:53 | 1635615 how to trade ar...
how to trade armageddon's picture

I've got to agree with Jon Stewart here: these aren't perfect storms, these are ordinary storms, we're just on a shitty boat.

http://how-to-trade-armageddon.com/2011/09/04/playing-greek-chicken/

Mon, 09/05/2011 - 16:00 | 1635642 how to trade ar...
how to trade armageddon's picture

I should add, it's funny to see the term "safe haven curse" applied to Japan and Switzerland. The dollar's safe haven status hasn't deflated all that much even after all our mad scientist money printing. We've been living with the safe haven curse for decades.

Mon, 09/05/2011 - 18:47 | 1636107 jakethesnake76
jakethesnake76's picture

The  most catastrophic event on a still whole airplane ( in otherwords something important hasn't fallen off)is a Stall and it can kill you , so when my little LSA engine locked up about 300 ft above ground level, the most important thing for my survival was keeping the plane ABOVE Stall speed till i touched down , so i nosed over to keep a good enough airspeed to keep the plane flying and headed for the pastures below.    If i had Benny the Banker with me and he had tried to grab the stick and keep it flying which of course is impossible i would have had top sock him in his fuzzy little jaw and maintain control of the plane and it's descent.  Few planes are built to ride the thermals and no matter how many bonfires of money Benny was burning below i was still headed down but atleast i had control. throwing money out the back of a plane and burning it to create thrust would only work for Mcgyver and Benny ain't no Mcgyver ..   We must have a woeful education system to think some ditch digging jobs by the Government will keep us afloat...

Mon, 09/05/2011 - 19:26 | 1636264 yourfather
yourfather's picture

i have noticed the term "stall speed" showing up in presentations at my office in the past few days.... and at the highest level also....

Mon, 09/05/2011 - 23:17 | 1637000 Buck Johnson
Buck Johnson's picture

SoGen is going down, no doubt about it.  But as I've said over the years, we went into a depression back in late 2007 and will be in one for at least another 15 years.  The definition of a depression is a very bad recession, you can't get any more badder than what we have been in.

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