Recessionspotting: "You Are Here"

Tyler Durden's picture

Now that even the likes of Joe LaSagna are starting to throw out the R-word about as casually as they did a 4% 2011 GDP target as recently as 2 months ago, it is becoming increasingly clear that the market is pricing in the fact that post a few more historical BEA revisions, the prior two real GDP reads will end up having been, shockingly enough, negative, i.e., your garden variety recession. So where does that put us on a market performance continuum, for those wishing to extrapolate how much further stocks and, yes, bonds (because credit is and always has been a far better indicator of objective market reality) have to drop before we hit the proverbial floor. Well, according to Morgan Stanley, quite a bit lower: "Despite the recent decline in risk assets, we do not believe that recession is in the price. Exhibits 3 and 4 show the typical declines in developed market risk assets in recession. Compared to corrections in past recessions, S&P prices and corporate credit spreads would have more to go, though spreads are starting from a higher level than typically precedes recessions." What is startling is that should central planners lose all control (and with central bank intervention upon intervention, one can argue that should all artificial props be removed, the market really ought to plunge in a Great Depression-style tailspin), the drop from the April 29 peak to the bottom will be roughly 4 times greater... which means the S&P would hit the proverbial "S&P 400" which is the long-term target of the likes of some more popular skeptics such as Albert Edwards and Russell Napier. As for credit: watch out below.


and Credit:

And completing the pain, again from Morgan Stanley:

Arguably if there were a recession next year the decline in risk assets would be larger than usual. Investors may be unsettled by two related factors. First, the limited policy options for policymakers. Conventional policy tools are near-exhausted in major developed economies. Moreover, there seems to be political, institutional and market obstacles to aggressive use of unconventional policy tools. Ultimately they may come – the bigger the crisis, the bigger the response – but they may only come after there are very significant asset market losses.


Second, a recession next year would increase deflation risks in developed economies. This is partly a matter of inadequate policy response. But the more important point is that the developed economies would enter recession with the lowest nominal GDP growth rate seen entering recession, so nominal GDP contraction would be a larger-than-usual threat. Falling nominal GDP with elevated debt levels is the deadly debt-deflation combination of the 1930s. We are not forecasting such an outcome, but it is a significant tail risk, and one that could lead to a larger-than-usual setback in risk assets.

Translation: we are on the verge of the biggest deflationary market collapse since the 1930s, which will, inevitably, be followed by the most powerful (read fiat dilutive) central bank response in history.

All those gloating that hyperinflation has not set in yet... give it a year.

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Long-John-Silver's picture

Let's call this what it really is, an economic depression.

In the future when the books are written it will be called Great Depression II.

High Plains Drifter's picture

perhaps you may think life will continue on like it always has , in our collective memories. but i say it will not. there is no future unless we make one.

Long-John-Silver's picture

History books are written by survivors.

High Plains Drifter's picture

the real purpose of all of this is to take down the united states. it is a pebble in the shoe. it must be removed to make the world ready for world government.

WonderDawg's picture

I predict that historians will refer to it as The Great Collapse. Or maybe a combination, like a movie title for a sequel, like GDII: The Great Collapse.

I like it.

sabra1's picture

or, Ma and Pa Kettle go Berserk After 5Th Eviction Notice>

spiral_eyes's picture

The Great Collapse is more likely...

Or the Great Shakedown...

The Great Implosion...

The Great Freeze...

Who knows? 

Gohn Galt's picture

The Great Shakedown, I like it.  But even though I am sure more than a few of us on this board will survive, we would be likely to have it called the Great Collapse.  Just like most history books, you cannot vilify your leader's.  Imagine the bible if it had such stories explaining the unrest at the time, about Jerusalem being used as a Roman scapegoat for the Egyptian province that was earlier stripped of their last pharaoh and were being hopelessly impoverished. 

In the USA, Great Depression, General Butler testified and stopped a military coup of the United States, Wall Street and many Senators involved, Prescott Bush, their family bank Brown Brothers.  No one was prosecuted.  And every decade or so a little more evidence and testimony goes missing or no longer exists.  You can look up the 15 page statement "War is a Racket"  It's an old story, like you say, rinse and repeat.

So maybe we will blame these times on the evil farmers, the Amish or natural disasters.  Whatever we blame it on or label it, I am sure it will be propaganda to fit the agenda.


Newsboy's picture

"The Global Collapse" will be it's name

Liquid Courage's picture

How 'bout (with apologies to Gibbon, Toynbee and Spengler): The Decline and Fall of the Anglo-American Empire, with economic causes taking on more even importance than in prior cases of collapse.

High Plains Drifter's picture

history is written by those who control the writing of it. it won't matter that much in the future since the goal is to eliminate most of the world population and you had better believe me, that the people whose idea this is, have absolutely no compunction with doing such. so future history won't mean much because no one will be able to read it. you have to understand, that the end of the united states is nearing , mainly because we are no longer needed. our usage is unnecessary very soon. 

CrazyCooter's picture

Historically speaking, you are correct.

I would point out that every letter ever published on ZH, all comments included, would proabably fit on a single DVD. Kind of hard to re-write history with so many copies of the daily unfolding floating around.



baby_BLYTHE's picture

hey, that is actually a really great idea. I wonder if the Tylers could come up with something...

GFKjunior's picture

Yes, that would be great. The Mises Institute periodically converts the entire site into a torrent of a couple of hundred gigs. ZH should do the same, a complete archive that we can all download safely and quickly.

High Plains Drifter's picture

hey man, we are all terrorist now. we think on our own. we have our own ideas. we express them in a public forum. we discuss these issues and more. we are the modern terrorist. so in answer to your statement, one might conclude that one day very soon, the thought police will go around arresting those of us who walk too close to truth.....

Mentaliusanything's picture

@ Drifter,

Sadly yes on all counts, It is all, in the end, a population problem.

Unfortunatly they did not think it through.

6 Billion less means economic armadagon but I guess if you have the Gold you make the rules to the plebs that remain.

Sort of Morlocks and Eloi ending.

There is an alternative ending but that has yet to be written by men and women of clear mind. 

I might add that the problems of England are not much different from the Days of Louis XVI. The Fuckers just don't get it. They, the young,  have no Life which is their "bread" and all they want is the real crooks to be brought to Jail.

add it up.

Cost of the Riots =10 million pounds

Cost to those Kids from the Pig men =10 trillion pounds and counting.

who is in Jail ?????

Chuck Walla's picture

UN Agenda 21, the coming division into Morlocks and Eloi.

Fred Hayek's picture

One problem with the "world currency first" plan is that the travails of the Euro are showing that monetary union of disparate polities without governmental union just isn't going to work.

Caviar Emptor's picture


to make the world ready for world government.

That would imply a triumph of order over disorder. I think we get disorder before there could ever be one world government. 

Popo's picture

If that is true, one must point out that "taking down" the most powerful military empire in history will carry with it many unintended side effects.   


DosZap's picture


I do not forsee the U S Military EVER being taken down, (short of total Global Nuclear War), then it won't make a diddly.

Not as long as there are Subs, numerous (way more than we will ever know)and ICBM's, and the #1 reason for never being taken down, I say is as old as mankind itself.

Self Preservation......................before they (Mil Leaders) allowed that, they would GO CHAVEZ on TPTB.( IMHO)

jomama's picture

i'm sure you won't be worried.  israel will be right there to assimilate the MIC. 

mkkby's picture

I think you're wrong about that.  The plan for world gov is for the US to be the enforcement arm.  Most of it is already in place.  When the UN said attack Libya, Obama just did as he was told.

High Plains Drifter's picture

one might conclude that our military is just about used up now. so who is next in line. china?  they control china too , you know...........besides the chinks have many more slaves to fill the ranks.........our ranks have suffered due to population control mechanisms such as abortion. you don't think for one minute that abortion is about some silly idea about a woman's right to choose do you?  

Urban Roman's picture
  • 1945: 141,745,183
  • 2011: 311,955,000

Make up your own facts, much?

Reese Bobby's picture

Facts? Facts can play no role in that self-important youngster's ramblings.  China has limited couples to one child and The Lord only knows how many baby girls have been killed at birth.  Evil comes in all forms:  Commie Dictatorships and "High Plains Drifter" Momma's Boys...

Alpha Monkey's picture

So you are a racist, sexist, paranoid person.  Thanks, that's about all I needed to know.

Miss anthrope's picture

High Plains I have watched and admired your comments for a long time.  I believe that the United states is really all there is left.  It gives me the smallest trembling hope in my heart because I know that this is the last stand.  We are the only place where the gun owners are still able to stand..... I guess us and Switzerland.  but when I see you standing there with your big machine gun I guess you know that too.

End the Fed, hang the traitors


High Plains Drifter's picture

you know what the real problem with us is miss?  it is not that we are free, but many of the sheep here , think they are free. the mind is a strong weapon. when it thinks something , even though it is not true, it is a bulwark against their plans. it is one of the many unwanted side effects of this country that developed over the years. they perhaps had no choice but to let it run its course. another unintended consequence is that wascally second ammendment. if we were already disarmed by "legal" means, etc, we would already be gone , as a nation. the only damn thing that is slowing them down here is that we think we are free when we are not and we are armed to the teeth. jefferson installed that second ammendment after the first because he knew these sons of bitches just like the back of his hand.........matter of fact, most of the founding fathers knew who ran things even back then.....but , you see, we had no complete financial control synched in yet, so they could speak more freely then as well as acting in a more nationalistic manner. nationalism and race is the bane of these sons of bitches and is something they endeavor to inculcate in their people while at the same time destroying it in other cultures. since whitey has the most brain power of the goy nations, he is the one with the target on his back, because it is he, who has the power to destroy these pricks once and for all and they know this all too well.............

Miss anthrope's picture

true story kind of an illustrative, anecdotal  tip of my hat to you high plains.

local health clinic  with medical and dental services ,, established by muslims, where 5 different languages are spoken  and every race and creed work............. in a large city of course, where else? right> Black, yellow, brown, white, muslim, hindu, Christian, but the directors of medical and dental?  white Christians.  just sayin.  

I am more equal than others's picture

Nassem Taleb's turkey story should apply here.  Everything is fine until it isn't  When have all these conditions existed in such great amounts before:

1. Every country has too much debt

2. As a country, assuming normal distribution - everyone has too much debt

3. High unemployment - everywhere - 99 monthers fall off into welfare

5. Lack of leadership

6. Moral decay - moral relativism rules

7. Fear

Survivorship bias is a bitch -


Urban Roman's picture

They'll write better than the blue-green algae.

Pizza spaghetti and mandolino's picture

That's not quite true. History is written by the posterity of the survivors, which is different.

SilverDOG's picture


The owners of the printing presses, are the ones who filter and edit the survivor/authors books, before they are printed. HHEELLLLLOOO?!

spiral_eyes's picture

Depression? Who cares! Mitt Romney is here to stand up for big corporations! If corporate profits and the S&P keep going up everything will alright! /sarc 

High Plains Drifter's picture

left, right up down, democrat, republican libertarian. it doesn't matter. they are all in on it..............such is corruption in this land. even ron paul. the situation in iowa this weekend reminds me of a circus atmosphere and it in many ways is exactly that. the place is full of clowns talking here and there , spewing lies and the joke, i am sorry to say is on us........and the people who own us know this all too well. it is sickening to watch and to notice. but to really see it, you have to be awake. many in iowa do not see it obviously. 

Caviar Emptor's picture

Iowa: Send in the clowns. Don't bother, they're here

decon's picture

It's always easiest to blame circumstances on the always elusive and enigmatic "THEM".

What's happening can also be blamed on billions of humans acting on their base instincts of fear and greed.  Some things only change on an evolutionary time scale.

High Plains Drifter's picture

the problem is tribal at its core. one tribe wants to control the world and has dreamed this dream for 3000 years.  there is a reason for everything that happens these days. one of their goals is to eliminate 5/6th of the world population as indicated on the georgia guidestones etc. too many say that everything would work out if we just had the kind of people in office that would do it. this has always been one big lie.  old man rothschild said in the late 1700's that it doesn't matter who is a leader of a country if the rothschild cartel controls the money systems. politics is a joke and always was a joke. the founding fathers warned us about these people but they intrigued here as they have always done and this is one of the things they are good at.  too many say yes to their money and are cheaply bought off. the system is broken and cannot be fixed. sometimes a nation must take out the trash and do some internal cleaning. this is one of those times. we do it or we lose. no buts about it. 

Caviar Emptor's picture

That's a cartoon, not reality. Not every German in WW2 wanted to dominate the world. As usual, there was a group within the country. Not all Japanese wanted to take over the US. And when the war ended, contrary to rumors on the other side, US citizens did not turn everyone into slaves. 

Waffen's picture

Your missing the point.  The average person doesn't want to rule the world. It is the extreme, I am better then everyone else, I have the means, power and knowledge that makes me better to pillage rape and rule the world as I see fit. It is the mantra of the globalist Oligarchs.

The globalists believe in Social Darwinism.  They want a world of few people where they can roam the world free, with life extention technologies and the plebs are their to serve them only until they arent even needed anymore.  It sounds crazy yes, but these "elite" do not believe in the expansion and greatness of humanity, they believe in the greatness of themselves.  

The average person can not even comprehend the evil nature of these people. Its the kind of person that wishes they could come back as a virus to solve overpopulation. Think weaponized airborne ebola.

Prince Philip 1988

" I must confess that I am tempted to ask for reincarnation as a particularly deadly virus."



High Plains Drifter's picture

i keep telling them they have absolutely no idea who they are dealing with. sometimes it seems like it falls on deaf ears. they are very close now. they can taste it. one can  only hope by some way that their plans are somehow corrupted. for the good of humanity, for the good of the united states and for the good of white western european culture that may well be extinct, (if they have their way) in a very few short decades perhaps.......maybe even sooner.  but they think they are smart and they know what it is truely all about. yep, the enemy is one. the enemy thinks as one. we think as many. the enemy moves as one. we move as many. we are many and they are few, yet they are there anything that any of you don't understand about such a statement?


speaking of viruses and plagues, it would not surprise me one bit if the generators of and the inventors of such things are the same people , or the same type of people vis a vis, the same tribe of people who run the banking system today. there was much discussion in the middle ages about just how the black plagues were spread....hmmm

High Plains Drifter's picture

you keep telling yourself that.  its all one gig cartoon. yep......once upon a time, there would be many who would understand what i am talking about but these days, those who truely understand are few and far between. why is it do you think that whites are seperated into left and right , socialist and conservative and all of this nonsense? together you stand and divided you fall, no? why is it they opened the flood gates in 1965 and let in all these non white peoples here , which if the founding fathers knew about it, they would turn over in their graves..

listen to what this man, a former jew, tells you. here is a apostate jew telling the world what they are doing and what is truely going on. you would do well to hear him out and listen to him for he speaks the truth...........

WonderDawg's picture

That dude's a little, ah, spooky, but not in a scary way. More of a he's-free-to-reproduce kind of way.

Reese Bobby's picture

Funny.  I wonder if that crazy guy has ever done an honest days work in his life?  The outfit screams, no...

Miss anthrope's picture

HP:  It is in every way like a junkie/addict.  Either we quit the drug/fiat money which is very painful and feels like you are dying.  Then you get through it and feel better and go on to a productive life........... OR you just continue the dope and you die on the streets with nothing, not even your soul. 

I am ready for the pain