(10 am. – promoted by ek hornbeck)
A couple days ago I read an interesting article on the aljazeera web site titled Double-dip recession is unlikely. What made the article interesting wasn’t the source, or the claim, it was the reasoning behind the claim.
Most post-war recessions were kicked off when car sales and house sales and new construction plummeted.
There seems to be little risk of a substantial decline in either car sales or house sales and construction, primarily because the levels are already so low….
Both car sales and housing construction are already so low that they don’t have much room to fall.
What the author is claiming is “things are already so bad, it’s hard to imagine them getting worse.”
That’s a very interesting claim, but I doubt the author of the article learned it in an economics class. It sounds more like something he heard in a bar, and seemed to make a lot of sense after a few drinks.
That’s not to say he doesn’t have a point of sorts. It’s just that his point is that we are in a Depression.
The major banks have revised GDP estimates for the 2nd half of this year and start of next year to barely above 0%. But does that mean anything?
I found this chart at Calculated Risk.
Notice the tight correlation between the manufacturing indexes and recessions. It basically says that the “recovery that wasn’t for Main Street” is over.
Of course, using the composite ISM isn’t the only way to predict a recession.
When the probability model looked at data from a Thomson Reuters/University of Michigan survey, it found that the likelihood of a recession was 80 percent.
Even more, the latter survey revealed that consumer confidence is at its lowest level since May 1980.
So manufacturing is falling and consumers are even more discouraged than they were during the depths of the 2008 panic.
¿Qué más?
Bloomberg uses the method of measuring YoY changes to real GDP. Their method has a striking accuracy rate.
“Since 1948, every time the four-quarter change has fallen below 2 percent, the economy has entered a recession. It’s hard to argue against an indicator with such a long history of accuracy.”
So what does that mean for employment?
Not good. Not good at all.
Housing is sliding again. The subprime bust is largely over, but the rest of the housing market hasn’t found a bottom yet. ¿Qué más?
There are also indications of a double-dip on the consumer level. Small-business are cutting back hours and hiring less.
It remains hard for people to get credit.
Speaking of credit, banks’ trust in other banks is in a decline as well.
Quite probably the most striking chart of all is this one. It reflects back on the article that started this essay.
Just because a recession has ended doesn’t mean the Depression is over.
The Great Depression didn’t end when FDR took office in 1933 and the economy started growing again.
And the end of the “Great Recession” in 2009 didn’t mean that the current Depression was over either.
What we managed to do was to throw trillions of dollars at Wall Street to bail out the multi-millionaires that caused the mess and propping up the unsustainable status quo.
Now that the trillions have been spent the economy is sliding back into decline, except this time we don’t have trillions more to throw at the problem.
All that is left is either a) the public taking to the streets and forcing the politicians to enact real reforms, or b) continued public apathy and ever increasing suffering with dead-end austerity.
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Hang on. Here we go again.
We know how “ferocious” the Democratic party leadership is.
… at Wall St. as we might wish ~ the Fed can just make more. The problem is not that, “Now that the trillions have been spent the economy is sliding back into decline, except this time we don’t have trillions more to throw at the problem.” … the problem is that the trillions thrown at Wall St. had nothing to do with the sluggish recovery we experienced.
The sluggish recovery was driven by rising exports on the back of the exporter’s exchange rate and consumer durable goods spending, and a brief spell of catch up investment on projects deferred. What the federal stimulus mostly did was offset the decline in state and local spending, so the net stimulus effect was very small.
The bottom of the economic food-chain has already been starved out by globalization, i.e. wealth transferred from the world’s working classes to the multinational-corporate elite who control all world governments. The PC version of the outcome is lack of consumer demand, the reality is there will soon be little-or-no money left to be made from the resulting destitute masses, they will have no value (no economic value = no value in a world controlled by insidious greed).
This will not change; people have no effective means of retaliation against oppressive global power-structures backed by 21st century military forces that serve the multinational-corporate agenda (see Iraq).
With the coming Dark Age there will be no “New World” where people can (temporarily) escape.
there will be ups and downs year to year, but the rich have stolen almost all the wealth, and they’re not gonna give it back–in fact they’re still coming for the rest.
barely a blip on the graph mostly because of the lack of jobs and the ongoing bank mess
Get the savages into debt by whatever means necessary so they’ll have to sell their lands. He articulated this quite a few times in different ways. Ultimately these lands ended up in wealthy private hands. This was in concert with federal treaties that also led to distribution of lands into wealthy private interests. And if these didn’t work, get out the army.
This policy was carried to extremes by the insane Jackson.
And this was a policy that catapulted the U.S. to quickly subdue the continent while engaging in insane adventures like taking half of Mexico. And all during the 19th century, 90% of the newspapers were supportive.
The last 100 years has been the SAME THING, except the impetus that launched this nation, built upon wild expectations, doctrines and social control by debt is
finally running out of energy in the face of cultural and environmental realities. Notice how we’re TOLD that we’re all in debt. What a strange moment indeed.
But from my memory aljazzeera became mainstream American media shortly after the invasion of Iraq. At the time I was waiting for shock and awe from Faux News wondering why such things never really came. I have come a long way since those days. Then some years later I went of one of my mother’s financial planning meetings and recall getting pissed about the wonderous investment opportunities in financially supporting the North Vietnamese tuna fishing industry, what, me being a cusp of Vietnam era Baby boomer and all that. Wow, amazing since “we”, the US government has held this amazing grudge against Cuba long after the infamous Soviet Union “fell” to Ray-guns concept of Star Wars and subsequently Islam was designated as the military-indusrial-intelligence complex’s enemy dujour via the false flag event most sheeple know as 911.
This financial engineered shit of wiping out the 300 or so million of “us”, the most consumerist society ever merely to enhance to profit margins of globalists on top of the food chain, erasing forever from history the human rights advances “we” did accomplish? Now that just boggles the mind, don’t it.