If its Saturday, that means its time for a cool chart from Floyd Norris:
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Recession, Far From Over, Already Setting Records

20090425_3subcharts_graphic
Chart courtesy of NYT
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Excerpt:

“THE current recession has become the second-worst in the last half-century and is close to surpassing the severe 1973-75 downturn, according to the Index of Coincident Indicators, based on government data and compiled each month by the Conference Board, a private organization. Unlike the more widely followed Index of Leading Indicators, which is supposed to help forecast changes in the economy, the coincident index is aimed at simply recording how the economy is doing now.

The accompanying chart shows how far that index has declined from pre-recession peaks during each downturn since 1960. The figure for March, released this week, showed a decline of 5.6 percent from the high set in November 2007, the month before the recession began, according to the National Bureau of Economic Research.”

Interesting stuff . . .

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Source:
Recession, Far From Over, Already Setting Records
Floyd Norris
NYT, April 24, 2009

http://www.nytimes.com/2009/04/25/business/economy/25charts.html

Category: Data Analysis, Economy, Employment

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.

40 Responses to “Record Setting Recession”

  1. Bruce in Tn says:

    Gotta go, but I posted a couple interesting articles at the end of the stress test thread about household wealth and also about small businessmen….back tonight..

  2. dead hobo says:

    I don’t care about your stinking charts from the NYT. The real question is “who’s tougher? The stock market or the Economy?”

    The economy basically sucks while the stock market won’t stop going up. Now, who should I listen to? The economy tells me what I don’t want to hear. The stock market is just one big happy face. Who would you rather be around? Plus, when you put money in the market now, you see it grow. The economy doesn’t do that for me. The stock market attracts happy people who want to be my friend. All the economy has is Roubini, and bankrupt car companies, and banks that are broke. What’s that all about? Why wouldn’t I take the stock market over the economy every time?

  3. usphoenix says:

    Regarding last night’s comments about how the market is not matching reality (the current recession or normal PEs), (And it fits this thread), the market run-up right now reminds me of the run up of oil last year to $147. Who did that? My sense is whoever ran it up was smart enough to bail before the crash and left the stupids holding the bag. Could the same thing be going on now with the market?

    IMHO there are some really smart big players pumping things. Call them the PPT.

    Furthermore, I find it really curious that the TBTF banks are getting stock price run-ups based on their trading income. Are they traders or bankers?

    What’s wrong with this picture? And how is it going to end?

  4. Chief Tomahawk says:

    Interesting development here in suburban Chicago….

    The local (property tax supported) high school is laying off 12 support staff positions. Budget cuts? No. They’re going to re-direct the funds to hiring additional building security. Why? Because they’re expecting a large influx of new students for the new school year with low reading scores and possible gang affiliations. I believe it to be a product of the housing bust. This community has long been a mix of working class apartments and middle class single family housing. In it’s haste and greed, it allowed many 8-story condo buildings to go up when surrounding communities restricted new construction to four stories (first floor retail and three floors of condos.) It would seem the 8-story buildings overshot the local market and now the owners are turning to the Section 8 program to fill them.

  5. karen says:

    I awoke this morning after a very late night to find that 3 or 4 more banks have been taken over… thanks to the marketwatch bulletins dumping into my mailbox… but the barron’s cover is bullish the dow.

  6. call me ahab says:

    usphoenix-

    I think you may be on to something

  7. jhunt says:

    I wonder if the lack of personal income drop off has to do with how it’s calculated; ie the measure missed all of the income ‘growth’ via the housing bubble, and is now missing it on the downside as well. Correct me if I’m wrong, but wasn’t the post 2001 recovery one of the worst in income growth ever?

  8. Mannwich says:

    I think it’s quite obvious that the bailout money is being used by the banks to trade the market up in attempts to pretty up their financial outlook (and others) so they can raise more cash from the rubes. Now we know where inflation (all that extra cash from Ben & friends) is hitting – it’s going from the goverment to the banks and into the stock market. It hasn’t made its way to the economy….yet. Does it even make any sense to fight it at this point? I’m beginning to question the wisdom of that. Of course, it will all end someday and end very badly with some God awful unintended (or intended?) consquences, but how long can it go on? karen? Anyone?

  9. Mannwich says:

    @bruce: Saw an article in my print WSJ yesterday where it said more and more small business owners have stopped taking ANY salary and are basically skating along by the skin of their teeth. Meanwhile in the la-la land that is the stock market, everything is just peachy. I’m guessing those small businesses wouldn’t mind a piece of that TARP action but sadly they’re not going to get it even though we hear all patronizing comments all the time about just how important small businesses are to this country. It’s complete garbage and everyone knows it.

  10. DL says:

    dead hobo @ 9:50

    “The stock market attracts happy people who want to be my friend”.

    I suppose that means that short sellers are little more than anti-social curmudgeons.

  11. Doc at the Radar Station says:

    Look at the “V” shapes after 1974-75. The included angle of the “V” begins to increase and then the right half of the “V” begins to rotate clockwise. In 2001 the “V” shape collapses and is morphed into a “W” with the middle part subdued. They are slowing turning into “L” shapes since 1974-1975. Recovery times are lengthening. Looking at the geometry, it looks like a decade to recover from this one.

  12. They are slowing turning into “L” shapes since 1974-1975.

    “…When the first triennium of the Trilateral Commission was launched in 1973, the most immediate purpose was to draw together—at a time of considerable friction among governments—the highest level unofficial group possible to look together at the key common problems facing our three areas…
    …Two strong convictions guide our thinking for the 2006-2009 triennium. First, the Trilateral Commission remains as important as ever in helping our countries fulfill their shared leadership responsibilities in the wider international system and, second, its framework needs to be widened to reflect broader changes in the world. Thus, the Japan Group has become a Pacific Asian Group, and Mexican members have been added to the North American Group. The European Group continues to widen in line with the enlargement of the EU. We are also continuing in this triennium our practice of inviting a number of participants from other key areas.

    The “growing interdependence” that so impressed the founders of the Trilateral Commission in the early 1970s is deepening into “globalization.” The need for shared thinking and leadership by the Trilateral countries, who (along with the principal international organizations) remain the primary anchors of the wider international system, has not diminished but, if anything, intensified. At the same time, their leadership must change to take into account the dramatic transformation of the international system. As relations with other countries become more mature—and power more diffuse—the leadership tasks of the original Trilateral countries need to be carried out with others to an increasing extent.

    The members of the Trilateral Commission are about 400 distinguished leaders in business, media, academia, public service (excluding current national Cabinet Ministers), labor unions, and other non-governmental organizations from the three regions…”
    http://www.trilateral.org/about.htm

  13. franklin411 says:

    The article’s title does not logically follow from its premises. As the chart shows, this recession has been gawdawful…Tell me something I don’t know? And from that, we’re supposed to divine the future?

    And…define “the recession is over.” Is it over when we swing to positive GDP growth? Who, pray tell has been predicting such a thing? Nobody is predicting that. What we’re seeing is signs of a meaningful recovery–green shoots, if you will.

    Finally, the chart tells us one more thing–V shaped recoveries are the norm…L or W shaped recoveries are the exception. And if you look at the two periods of non-recovery recoveries on the chart, both occurred under Presidents Bush I and II. Coincidence? I think not.

  14. Mannwich says:

    It’s not at all profound, but it just hit me – - our economy has morphed from the ’90′s to bidding up worthless dot.com stocks to flipping homes to each other to quickly speculating/flipping stocks to each other. Brilliant! We don’t make anything of real value anymore, so it’s all about the quick buck now. Stocks are far easier to buy and flip too. This could go on for quite a while, I’m guessing, until this crashes and they find the next bubble to blow (maybe it’s real estate again?). Our whole so called “economy” is a complete farce. It’s all about the big CON, a quick fix predator-based economy based on the the who, how, where is my next mark? Quite sad.

  15. Jeff,

    w/this: “a quick fix predator-based economy”

    http://www.af.mil/factsheets/factsheet.asp?fsID=122
    “Mission
    The MQ-1 Predator is a medium-altitude, long-endurance, unmanned aircraft system The MQ-1′s primary mission is interdiction and conducting armed reconnaissance against critical, perishable targets. When the MQ-1 is not actively pursuing its primary mission, it acts as the Joint Forces Air Component Commander-owned theater asset for reconnaissance, surveillance and target acquisition in support of the Joint Forces commander.

    Features
    The MQ-1 Predator is a system, not just an aircraft. A fully operational system consists of four aircraft (with sensors), a ground control station, a Predator Primary Satellite Link, or PPSL, along with operations and maintenance crews for deployed 24-hour operations.

    The basic crew for the Predator is one pilot and two sensor operators. They fly the aircraft from inside the ground control station via a line-of-sight data link or a satellite data link for beyond line-of-sight flight. The aircraft is equipped with a color nose camera (generally used by the pilot for flight control), a day variable-aperture TV camera, a variable-aperture infrared camera (for low light/night), and other sensors as the mission requires. The cameras produce full-motion video.

    The MQ-1 Predator carries the Multi-spectral Targeting System which integrates electro-optical, infrared, laser designator and laser illuminator into a single sensor package. The aircraft can employ two laser-guided AGM-114 Hellfire anti-tank missiles.”

    they do wonders for ‘Crowd Control’, as well..

  16. Doc at the Radar Station says:

    In the recessions up through 74-75, when people were laid off, they drew unemployment for a few weeks or months and then got a call and went back to work at the same place for the most part. The composition of the economy was tilted more towards production instead of consumption, so you had an inventory correction that drove it. The jobs lost in the last few recessions increasingly have been permanent. That might explain the “V” shapes as opposed to the “W” or “L” shapes, just a hunch.

  17. Mannwich says:

    Maybe the terminally unemployment will just trade stocks on margin for a living? Sounds like a brilliant idea. Beats going to LV. You can just hang out at home and lose money.

  18. Obama: Give me ideas on tightening federal belt

    I’m not an American so he probably wouldn’t listen to me. If anybody wants to email him you might suggest he cut a 10% commission check for every dollar a person can save the government through waste and expense reduction or ingenuity. It would be expensive at first but pay off over the long run.

  19. franklin411 says:

    @Doc:
    Sounds reasonable to me. But the shift to consumption was not an accidental or organic development; it was a conscious decision by political leaders and the voters who supported them. We’ve known since the late 1970s that foreign competitors were dumping goods on the American market in a largely successful attempt to eliminate American producers while protecting their own domestic markets with high tariffs on our goods. Did we do the reasonable thing and match their tariffs until they opened their markets to our goods? No–we cut our tariffs! Reaganism in action, and Clinton largely bought into it.

    I’m reminded of an old cartoon. The character gets into a fight on the street, and the assailant says “Put em up!” (IE Put up your fists to fight). The character reacts by putting his hands over his head, and of course he’s knocked out. That was Reaganism in action.

  20. I call this ‘the baby boomers finally get that they’re mortal and have to retire some day’ recession ;)

  21. franklin,

    you need to get over the ‘Reagan’-thing, it’s clouding your Vision.

    The raping & looting of this Country has been a bi-partisan affaire

    it started before #40, and has been continuing, with ever greater enthusiam, ever since.

    btw, it Was WJC, aka #42, that signed NAFTA, the WTO, & China MFN

  22. Doc at the Radar Station says:

    franklin411, Check out Michael Pettis’ and Martin Wolf’s comments here (if you haven’t already):
    http://mpettis.com/2009/04/is-governor-zhou-a-closet-bernanke-ite/

    They propose that the Fed “chose” increasing indebtedness through artificially low interest rates (a domestic stimulus) to offset the unemployment resulting from the US tradable goods sector shrinking.

  23. call me ahab says:

    Mannwich-

    manufacturing will come back with the devaluation of the $- not sure of all the ramifications of that- but a lower living standard is one-

    where will all the jobs be? who knows- the middle class is being squeezed- best to become fireman- pretty hard to shop that job out

  24. call me ahab says:

    rock on Hoffer- franklin definitely has tunnel vision- or maybe blinders

  25. MRegan says:

    Ahab-

    Forget everything I wrote about Peru- go to Paucartambo for La Fiesta de La Virgen del Carmen, in June or July like the 14th or 16th and go on the overnight excursion to see Las Tres Cruces, here are some links. I went in 2006- inexplicable

    http://snobear.colorado.edu/Adina/Watson/Tres%20Cruces.htm

    http://solnacientetrescruces.blogspot.com/2008/03/tres-cruces.html

  26. MRegan says:

    MH-

    Saw the notes, will look at Waste etc link tonight.

    Saludos

  27. ahab,

    see: En los meses de mayo, junio y julio el astro rey a su salida de oriente presenta un espectáculo natural con una variedad de colores, formas y matices, todo este espectáculo es apreciado desde el balcón natural de Acjanaco, en este lugar ocurre el fenómeno natural “rayo blanco” cuando el sol nace en el horizonte, este peculiar bamboleo de la luz solar ocurre durante el amanecer del solisticio de invierno, 22 de Junio.

    from MR’s link #2.

    note, longer days are soon to be leaving us~ before you go brush up on your Astronomy, a lot of what the Incas were doing will make more sense..

    MR-
    claro~

  28. call me ahab says:

    MRegan- appreciate the info- appears to be quite the spectacle- definitely now on my list

    MEH- please see the Google Translate rendition:

    During May, June and July the sun from east to exit presents a spectacle of nature with a variety of colors, shapes and shades, this whole spectacle is seen from the balcony of natural Acjanaco, in this case the natural place “White Lightning” when the sun rises on the horizon, this peculiar bobbing from sunlight occurs during the winter dawn solisticio, June 22.

    give me you critique of the translation- unfortunately, I am not conversant in Spanish-

  29. ahab,

    that’s the nut of it, no major errors that I see.

    though, it’s MR- that’s conversant, I just read enough so I don’t get lost (;

    it is funny though–translations, usually, don’t (translate).

    http://two.not2.org/psychosynthesis/exer/evocativ.htm
    http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=the+evocative+word

  30. Mannwich says:

    This one caught my eye while sweating on the bike at the gym. It seems in Cali tax credits are spurring more home building. Just brilliant. WTF??? @franklin: Is this your idea of good stimulus?

    http://online.wsj.com/article/SB124061719457055061.html

  31. call me ahab says:

    Mannwich-

    Keynes has been let out of the bag a la Aladdin’s Lamp- and will never be able to be put back in- this is the stuff that truly makes me ill- growth for growth’s sake- so the builder’s can survive- government and lobby’s at work- protecting their respective turfs

  32. Mannwich says:

    @ahab: It’s an ongoing mis-allocation of capital on a grand scale that we’ll be paying for for decades. Don’t we have far better things to do with taxpayer money at this point?

  33. call me ahab says:

    mannwich-

    agreed

  34. jc says:

    Who’s kidding whom – just look at the previous depression for guidance, there were a series of down and up moves then too, this is our second strong up move following two stronger down moves. Everybody is divining glimmers of light that we’re moving down less slowly but nobody is claiming we’re not moving down anymore.

    Nothing can improve when we continue to lose jobs at this rate.

    Just watch the auction foreclosures in the bubble states, that will push the banks over the edge , kill geithner’s toxic plan and send a new Treasury Sec’y back to Congress for another trillion for our most deserving banks!

  35. snapshot says:

    http://www.prospect.org/cs/articles?article=the_unlikely_revolutionary

    Unlikely Revolutionary – Simon Johnson

    “If you walk into a finance seminar with data pertaining to power and influence, the kind of things we’re talking about, they will take you very seriously,” Jonson says. “The short-run macro people, not so much.”

  36. Onlooker from Troy says:

    Interesting. Some things I’ve been thinking about lately in this vein.

    This recession was called based on unemployment rising vs. the more conventional (as far as I’ve known) 2 quarters of negative GDP. Is that a first? What have other recession going back to WWII been called based on?

    If it’s not the norm then comparisons between them may be somewhat distorted. We only had neg GDP starting in Q3 ’08. So compared to other similar recessions we’re only 9+ months along. I’m sure there are some faults with that thinking but it does point out that not all recessions are the same.

    This one was led by unemployment I assume because of the dropping housing market from bubble proportions. This is leaving us with a very crippled economy compared to the good old cyclical inventory excess recession because there won’t just be rehiring into those housing industries and the financial industry as well. We have to restructure to create new industry and jobs.

    That and the debt deflation makes this one a doozy and it’ll be a long one. It’s not over by a long shot either, the next wave of foreclosures and other debt default is coming.

    Those who try to look to those bear markets and recessions for guidance in catching the new bull are going to be sorely disappointed. And that is indeed what’s going on out there, even amongst much of the investment “profession.”

  37. Onlooker from Troy says:

    Oh, one other thing. Everybody assumes that the recession will end when GDP goes positive in a quarter. The start was called based on dropping employment numbers, might the end also end up being based on employment too? In this one it just might be appropriate.

  38. Onlooker from Troy says:

    franklin411 Says:
    April 25th, 2009 at 11:57 am

    (snip) And…define “the recession is over.” Is it over when we swing to positive GDP growth? Who, pray tell has been predicting such a thing? Nobody is predicting that. What we’re seeing is signs of a meaningful recovery–green shoots, if you will.<<<

    That’s exactly what those who tout this rally as the beginning of the next bull contend. They are saying that growth will start in Q3-Q4 and that the market leads that by 6-9 months. Ergo this is the real thing, better get on board. Of course it’s turned into an orgy of speculative froth, running up every low quality piece of trash they can find. A typical sign of a top. Just like ’07.

    Once again, what we’re seeing is a slow down in the velocity of contraction. No amount of hoping can change that. We’ve got a lot of work to do still and not dealing with the banks’ insolvency won’t help us. The next wave of Option ARM, Alt-A, and prime mortgage foreclosures is going to be a doozy. And unemployment’s heading well into the double digits. Sorry, those green shoots are a mirage. I’m not happy about that. I’m just facing reality.

  39. primordial_ooze says:

    We need to take a long-term view of things. The US will become a third world
    country and then the labor costs in China and India will be so high that they
    will out-source everything back to the US. We will rise again!

  40. farmera1 says:

    We already are a third world country, we just don’t know it yet.