Economists are now admitting that we are in a recession in the US, according to National Association for Business Economics (NABE). 96% of their survey respondents said the U.S. is in recession today.

Hey guys — thanks for the news flash! With the S&P down 47%, telling us that the US is in a recession is about as helpful as telling the survivors of the Titanic to take vitamin C for a cold.

Especially when considering that most of the professional economists, as recently as the late summer, were arguing that the US was going to avoid a recession. Many had claimed the US was in for a soft landing.

Here are some of the backward looking aftcasts* of the NABE panel:

-Consumer spending accounted for most of the downward revisions to the overall economic outlook, reflecting a worse outlook for household wealth and income.
-96% of the NABE panelists believe that a recession has begun.
-Half of the panel estimates that the recession started in the fourth quarter of 2007 or in the first quarter of 2008
-Just over 60% of the NABE respondents expect that the depth of the recession should be relatively contained, with a peak-to-trough decline in real GDP of less than 1.5%, with the balance expecting a harsher contraction.
-The jobless rate is expected to rise to 7.5% by year-end, 2009
-Lower inflation is predicted to coincide with increased economic slack.

* Aftcast: A forecast of what has already occurred, often weeks or months ago . . .


NABE Panel Sees Prolonged Recession
NABE November 2008

Category: Data Analysis, Economy, Markets, Really, really bad calls

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

37 Responses to “Aftcasting Recession . . .”

  1. Winston Munn says:

    “96% of their survey respondents said the U.S. is in recession today.”

    The 4% who disagree have been offered their own TV show on CNBC.

  2. 10 cc says:

    “-Just over 60% of the NABE respondents expect that the depth of the recession should be relatively contained…”

    Well, I guess that’s the kiss of death.

  3. albnyc says:

    Bodes well for recovery…not.

  4. dead hobo says:

    aftcasts: good word. It’s one I wish I made up. I would have called it an ‘aftercast’ but that’s only a nit. That word implies a depth of poetry. You could run it for miles and it would hold up the next day in a new way.

  5. babycondor says:

    I think the dearth of comments on this blog lately could be a bottom indicator. Widespread exhaustion & ennui vis a vis the markets. Nobody cares any more. A good sign.

  6. Virgil says:

    On words:

    It’s a recession when your neighbor loses his job; it’s a depression when you lose your own. -Harry S Truman

    What is it when you are homeless and what is it when the sold labor of your and your neighbor are still part-time jobs? It is some variation of George Carlin’s circling the drain position. To bad Carlin is not around to give us the words for what this is is.

    I am kind of stuck on saying I hope we build more infrastructure, because people need bridges to sleep under, not that there are homeless in the richest nation on earth or anything.

  7. hipster says:

    I would love to see a compilation, much like the one on Infectious Greed’s site about Peter Schiff calling all those fools(Ben Stein) out. Talk about poor forecasting….

    Remember all the calls from:

    Brian Wesbury
    Dennis From CNBC
    The Big Black Guy from Fox
    The list is endless

    How great would a montage be, like ones they do on New Years Eve. The worst “asscasters” of the year!

  8. DL says:

    Asshats with aftcasts.

  9. oilygasminer says:

    Isn’t it funny how the professionals lack the retailers in discerning whether we are in a recession or not? I could have indicated that we were in a recession if I only looked at our debt levels, or Net Exports to Imports, or unemployment, or foreclosures, or the prices of houses, and commodities. The fact is there are so many indicators how could anyone possibly miss what was right in front of them? I real issue that i’m concerned with, is the length of time that these recession will last.

  10. DL says:

    One can only hope that the economists advising the president (this president, or the next one) are a little better than those that make up the NABE.

  11. dead hobo says:

    I just took a quick look at Roubini’s site. In case you wondered, he’s still pretty depressing. Today is crappy and tomorrow will really suck. Don’t even ask about next week.

    Admittedly, I didn’t understand his skill and insight in predicting current events. Things today are much worse than I expected. But the fall corresponded to a logical progression that exactly matched what would happen to institutions when credit is withdrawn and bubbles pop. Up to Lehman and the immediate failures thereafter, he was a sage and should be remembered forever for the use of common sense, combined with the ability to think.

    At this time, he is predicting the ‘Consumer’ and is ignoring the good deflationary aspects of recent events. Such as the lowering of the cost of living soon due to commodity price declines. In a way, he is now aftcasting. While he clearly understood the mechanics of derivatives, I think he is utterly clueless about ‘The Consumer’.

    Yes, we are in a recession. No, it is not much different than any other one previously, except maybe lighter for those who are in jobs that build inventories. Roubini thinks that consumers, as an aggregate, will be as hopelessly stupid as those who ran major investment banks and hedge funds. No, I think the cockroach parallel is more apt to the consumer. They will always find a way to prosper and will scurry towards anything that will improve their lives on a moment’s notice. The considerably lower price of daily living will make a big difference. Roubini provides no such possibilities in the incredibly dismal bits and pieces I could handle from his very depressing blog.

    The big difference today is the internet and the ability for effective whiners to make themselves heard all over the world in real time. People haven’t hardened themselves to this new communication skill. It’s almost a shared recession hysteria, as opposed to slow times. Amazing. This also explain the instant acceptance of the recent commodity bubble.

    The inflationary aspects of the banks of the world pumping up the world will soon become apparent. Thieves will rape the TARP, pumping good inflation back into the world economy. Even productivity will probably stage a comeback now that money for paper passing is not available. This will happen quite soon.

  12. leftback says:

    Fools and incompetents abound. I listened to the Peter Schiff clips recently with Ben Stein, and it was really astonishing that Stein was calling for people to buy stock in 2007 in companies that now do not exist (BSC, LEH etc..). It’s hard to imagine how many people got suckered by that and how much money they lost.

    A low PPI number tomorrow might stoke more rate cut talk, and might even spur a little rally in the financials which were hammered today. I am long UYG, much of it as of 3.57 today – but I don’t think these beasts are at the bottom yet – it’s just a trade.

  13. Michael M says:

    OT: Am I the only one who notice that where we stand 10:30 – up or down – seems to tell every day whether we end up or down, despite the huge daily intraday volatility? Seems to me the big elephants come out in the morning and late afternoon – and in between the traders play handgranade pinball on speed, make a lot of noice then take their granades and charts and go home before the big swinging trunks arrive. And lately the elephants have had a lot to drop.

  14. leftback says:

    @MM: Certainly saw a lot of big trades going down around 9.45 and 3.30 but it seems to me that is the pattern for the institutional investors normally, no?

  15. DL says:

    Article in NY Times about auto company bankruptcy:

    This article is more balanced than most that I’ve seen, and discusses impact of, and on, the foreign manufacturers.

  16. Bruce N Tennessee says:

    Hopeful economists see us coming out of the recession in the second half of 09, but the Eurozone, from what I read this weekend, is thought to probably be in recession all of next year…

    Economists and predictions…sort of like oil and water. Just don’t do it…

  17. zell says:

    Good line Winston.
    Dead Hobo: you’re misunderestimating Roubini again. Roubini is right on. He’s enumerating a cascade which has just begun in earnest. We are transitioning from Wall Street to Main Street which is where the tragedy of eroneous economic policies will play out. Forget about Wall Street at this time. It’s irrelevant- totally a lagging indicator in this mess. Don’t fall for the nonsense that itwill turn up6-9 monthsbefore the end of the recession. Don’t count on theFed& Treasury – they don’t have a clue-not that I do.
    I think the dearth of comments is caused by our entry into the darkness. Visibility is being reduced by the day. What we are facing takes my breath away. How can anyone say when we are coming out of this when we are still ignorant of what this is?

  18. VennData says:

    Can someone get an interview with the 4% of economist who don’t think we’re in a recession?

  19. Pat G. says:

    No shit, Sherlock!! I stated on this blog months ago that the recession started in Q4, so we’re a year in.

  20. lalaland says:

    Hey Barry – what do you say you limit clicking thru to pages that contain more than 5 paragraphs and leave on the home page any content with less? I know those pageviews are important to revenue, but, you know, I hear you have a day job for that and it’s tiresome to click through to read another 4 sentences and stuff…

    Otherwise, love the redesign although I haven’t really poked around through all of it yet (busy, miraculously).

    dedicated reader lalaland…

    anecdotal micro-recovery evidence – brooklyn real estate clients (rentals) came out of the woodwork this weekend after shutting-in for the last few weeks, wife’s luxury jewelry employer saw a similar bounce, and the upscale restaurant around the corner said brunch was hopping for the first time in, well, since pre-election. Maybe the fact that some survived so far is sinking in and people want to get on with their (more broke/less rich) lives…

  21. Bruce in Tn says:

    Watching Cramer this afternoon, I am garnering at least a measure of respect. It would not be easy to have been wrong at least the first 2/3 of this downturn, even foolishly calling a bottom (needlessly) as he did, and now having seen the light, being just as stubborn on the downside. He now calls those with bullish sentiment idiots, but at least he’s not a Donald Luskin. I imagine he’s a very interesting person in person, but it must be hard for him now to tacitly admit he was wrong and we are in a very difficult place and it is too early to become bullish. Ben Stein, for all his many faults, has also apologized to his readers, although it would be nice if he wrote an apology to Schiff for all of us to read.

    I have been offhandedly quizing people who pass through the salt mine to see me over the last few weeks. Here in east Tennessee, there will be quite a decrease in spending over the holidays if the people I see are indicative of the population at large.

    Leftback….any interest in a burger about the initial claims this week?????

  22. leftback says:

    @ Bruce: It would be unwise of me to wager on data that is likely to be doctored. Has anyone else noticed how dire the numbers are since election day? Maybe the sugar coating is no longer being applied. I am calling a turn-around Tuesday rally for tomorrow and possibly Wednesday, based on soft PPI and CPI. After that, who knows? Any kind of sizeable rally and I will get short. That’s how I have been making money lately – it’s a range trade.

    I am in DC this week and I can’t see a lot of pulling back going on here. The restaurants are full and the convention business is certainly lively. K Street looks like the lobbyists have fueled a crazy building boom these last 8 years. I guess the Gubmint just keeps on paying folks to collect and spend our money.

  23. Bruce in Tn says:

    I also would like to say that there are pigs out there who are simply pigs. And arrogant pigs.

    “There’s a high degree of urgency” for federal action if GM is going to stave off a financial crisis, Rick Wagoner, GM chairman and chief executive, said Sunday in a joint appearance with United Auto Workers President Ron Gettelfinger on WDIV-TV in Detroit.

    Gettelfinger and Wagoner have been unmasked. Now they are appearing jointly to beg for this bailout money, and that isn’t what pisses me off….but Gettelfinger says the union won’t make any more concessions and Wagoner says the current GM executives will not step down if the government, in making the bailout, thinks this is for the best for the health of the company.

    Unmasked as arrogant bloodsuckers on the taxpayer. Give me the money and give it to me on my terms…NOW…

    A couple of real beauties….

  24. harold hecuba says:

    whatever has been mentioned before i’m not even reading. ECONOMIST is simply a made up job on wall street for firms that need it to fill the title. economists on wall street are worth nothing yet they pay these mooks 6 and 7 figure salaries. for what i ask. they are unable to forecast any turns in any business cycle. they remain optimists as is usual because they work for the wall street sales machine.

  25. Gabriel says:

    Is there a way to sue them, if they don’t stop bailing out these suckers?

  26. DeDude says:

    Anybody heard the roumor that after this came out, a famous former radio personality said: “those are some NABE ho’s”

  27. Winston Munn says:

    The consumer’s perception of liquidity has changed.

    Von Mises wrote about time preferences – a fairly good description of what happens in a deflation. The consumer hunkers down, is unwilling to take on unnecessary debt, and is wary about spending cash that may be needed later. Savings grow. Debts are paid.

    If the downturn is severe enough and lasts long enough, the changes to perception are generational. How close to that kind of change is anyone’s guess, but the wealth affect destroyed by the housing demise has affected many more lives than the internet bubble’s crash, so the severity of perception change is much greater now than during the last recession.

    The longer this lasts, the less chance that consumer debt-expansion can be resurrected to drive growth.

  28. Bruce in Tn says:

    “Private consumption fell in the third quarter that ended in Septemberand economists think it will drop again in the current period and in the first quarter of 2009. It would mark the first time since quarterly statistics began in 1947 that consumption fell for three straight quarters.

    That is precisely what the U.S. government is trying to avoid. The Treasury wants to use some of its $700 billion rescue fund to guarantee consumer lending in the hope that doing so will get money flowing again.”

    Of course, this makes the government, in trying to reignite spending by the country as a whole, the enemy of the individual who is trying to pay off excess debt and years of overspending.

  29. ron32 says:

    Zell: Yes Roubini has and is ahead of the curve, seem to understand the critical role consumer spending has on our GDP. Why it escape’s the other 99% of the economic brain trust is a mystery!
    The lack of comments does reflect that the economy has jumped the recession creek sorta took the words and breath out of the bulls and bears for a bit.

  30. JohnnyVee says:

    Re Winston’s consumer perception: The babyboomers turn 61 in 2009. I don’t know about you but my parents are in their late 70′s and they don’t buy anything anymore. They have nice cars and a nice house or two. They just don’t consume anymore. The babyboomers, described as the pig in the python, will be consuming a lot less in their senior years like all the other generations. I think I am turning Japanesse…I think so.

  31. DL says:

    Over at Mankiw’s website ( he says that Intrade has a bet on the probability of a DEPRESSION occurring in 2009 (defined as a cumulative decline in GDP of more than 10.0% over four consecutive quarters).

  32. advsys says:

    This is classic!
    Deny, deny, deny. Hoping that when you have to capitulate the worst will be past.

    I know exactly what is coming. All the Giddy know nothings will now tell everyone this is the optimal time to buy buy buy.
    Why?? Simple logic. A long recession is 16 months. Markets usually start to recover at least 6 months before the end of the recession. Ergo, since this recession started 9 months ago, simple math makes the next month the time to buy.

    Purposely, leave out any other facts or that your reasoning could be based on incorrect assumptions and non facts in evidence.

  33. guidepostings says:

    There is so much quantitative data on the market right now that it so overextended that it is almost useless to interpret it. Basically, most of it is saying the market is so oversold that we should rally, and should rally hard. But I have been following a few indexes and ratios as guideposts. Since this is arguably the greatest financial crisis ever, the banking sector is an excellent forward looking vehicle to guide us where we are heading. Big surprise, it doesn’t look good. Today we took out the Philadelphia Banking Index’s lows from early October and last July. I think this is a pretty big deal and pulls 800 into the crosshairs pretty quickly, maybe by the end of this week or at least the end of November.

    some shameless pointing, check out more:

    Dig a little deeper and you can see an interesting relative performance chart for the BKX and the S&P 500. In both instances, the BKX led the turn in the overall market by several months. Back in July of this year, the ratio bounced HARD off of the bottom established in the 1998-2003 bear market. Some traders made serious money picking that bounce.

    Assuming logic and geometry prevails (if you have any question about this market’s geometry look no further than the 2 beautiful tops that the market carved out in 2000 and 2007 on the S&P – as much as the market feels random and volatile, there is a rhyme and rhythm to this beast):

    The fact that we took ourselves back down to the last bear market lows in this ratio puts the very real possibility that the 768 intraday low on the S&P in October of 2002 will be revisited in this waves decline. Slightly scarier, is the ratio’s decline during this bear took out the intraday low from the previous by a substantial margin. Obviously, if those lows are taken out on a closing basis (especially on the weekly or monthly charts) this market will gain new and uncharted territory potential towards the downside.

  34. kackermann says:

    Aftcast. I like it.

    It’s sort of like the postdictions that others applied to Nostredameaus’ vague and vapid writings.

  35. kackermann says:

    I got a kick out of all the serious conviction/belief after market close last Thursday that we had truly entered what was to be a months-long rally.

    So much faith in technical analysis, yet everyone seems to have forgot that many of the indicators have broken records. When something breaks a record, that means there are no comparables.

    If the sun doesn’t rise tomorrow, there is no reason to say that it is certain to rise the next day based on the past performance of the sun.

  36. Bruce in Tn says:

    Calculated Risk has a cute video this morning on where your money is going. He and Barry have some of the same twisted humor…

  37. Bruce in Tn says:


    If the Berkshire class A shares close below where the class B shares used to sell for, is that an inverted yield curve?

    Berkshire Hathaway Shares

    …just wonderin’