I find the relentless double dip drumbeat to be wrong, only in that the next recession is far enough away from the prior one as to be considered its own, stand alone contraction.
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Source: Jim Stack, Investech Research via Welling @ Weeden
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
"Money is power, & you ought to be reasonably ambitious to have it." —Russell H. Conwell, Temple Univ, 1877
"It's the end of the world as we know it and I feel fine" say the French as consumer confidence in May rose to the highest since Nov '10 as they welcome and get excited about new Pres Hollande. Also, the French 10 yr bond yield touched the lowest on record this morning. June consumer confidence in Germany held at 5.7, just .2 pts off the highest since Mar '11. To the euro bond debate which is now taking on greater rhetoric with those with high bond yields wanting them and those with low ones saying no way, ECB member...
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October 5th, 2011 at 1:08 pm
You know …. if we head back to 1300 that would be the start of one heck of a H&S pattern.
October 5th, 2011 at 1:18 pm
That’s if we go into recession, of course.
October 5th, 2011 at 1:24 pm
Here’s a hint from gdpc96:
10/1/2007 13,326.0
4/1/2011 13,271.8
Unless you’re playing with P/E Ratios, flat to negative since the previous peak. Not even 1980-81 to 1982-83 can say that.
October 5th, 2011 at 1:29 pm
Seizing upon the words ‘relentless drumbeat’, the protesters continue to amass about Wall St. And the weather is a little ways away from being a help at crowd control…
October 5th, 2011 at 1:36 pm
IMHO there are many difficulties in attempting to classify a lengthy recession vs. a “double-dip” recession vs. a new recession, especially in real-time.
I believe we continue to be in a highly complex economic environment, different from those in the past. For those interested, more on my thoughts on the matter can be found here:
http://economicgreenfield.blogspot.com/p/special-note-on-our-economic-situation.html
October 5th, 2011 at 1:37 pm
It’s a new recession in the same sense that a second heart attack three years after the first one is a new heart attack.
And if you don’t stop smoking and eating crap food and start exercising, you’re going to have a third “new” heart attack in the not-too-distant future.
October 5th, 2011 at 1:44 pm
I agree w/ TK and TZ. When all is said and done, just because the Politburo says tractor production has been up for the past 3 years, doesn’t mean that the real economy of The Glorious Republic of the People has been anything more than in the shitter during that time.
Who ya’ gonna’ believe — the bureaucrats or your own goddamned lying eyes?
October 5th, 2011 at 1:57 pm
…last week Lakshman Achuthan said it is the start of a distinctly new recession…ECRI’s track record is pretty impressive at picking turns, such as in the spring of ’09…
…on August 29th, John Hussman says “It is now urgent for investors to recognize that the set of economic evidence we observe reflects a unique signature of recessions comprising deterioration in financial and economic measures that is always and only observed during or immediately prior to U.S. recessions…”
http://red-pill-blue-pill.blogspot.com/2011/09/ecri-confirms-us-recession.html
October 5th, 2011 at 2:03 pm
From the perspective of the long term unemployed and underemployed, it is perhaps one long depression with a stock market recovery in the middle. Hopefully they’ve been using their savings (or perhaps their access to historically cheap credit) to dollar cost average in the market after the March 2009 low.
October 5th, 2011 at 2:43 pm
I understand that there has technically been a recovery which would mean that there would be a new recession. However, it is also customary to see real improvement for the vast majortity of the population in a recovery. I don’t believe that has been the case here. Most household income and emplyment metrics are not better in a significant way since the last recession. Economists can declare the beginning and ending of recoveries and recessions but most particpants won’t distiguish a difference.
I think we are in a depression with periodic rolling recessions and technical recoveries amid a generally poor employment and income environment. The sugar highs that the Fed policies and tax cuts produce seem to be smaller in each round while the economic losses in the downturns are worse each time. One or two more to fully clean house and start the next real recovery?
October 5th, 2011 at 2:58 pm
I’m not sure I understand you clearly. Are you saying that a “new” recession wouldn’t be so much “new” as it would be a continuation of the last recession which never really ended? If you are looking at employment indicators, it certainly doesn’t look like it ever ended; if you are looking at production figures, it ended in a technical sense, but not a “sustained growth” sense.
If that’s what you mean, I agree.
October 5th, 2011 at 3:06 pm
i actually wonder if the 2001 recession is really over and that we only papered over it and called a recovery
October 5th, 2011 at 3:17 pm
we still not quite to an NBER technical recession
but this splitting hairs
you could say US in below capacity growth recession over a year
and recession or growth recession for over 5 years
except for 3Q09 to 1Q10 a little inventory boomlet
unemployment (standard measure) last at its low of 4.4% in may of 07
bounced around there earlier
as early as Oct 2006
and unemployment has pretty much headed up last 5 years except around that little boomlet.
so jobs this fri might still hold us only in growth recession for now
small payroll plus and last mo revised to plus? but the lead indicators last 3 wks starting to read near term future recession as odds on.
October 5th, 2011 at 5:19 pm
You know …. if we head back to 1300 that would be the start of one heck of a H&S pattern.
Yup, actually received a note today from a technical analyst basically outlining it. You’ve got the left shoulder at the April 2010 top with the head at the April 2011 top. One scenario would be that we just put in an intermediate-term bottom, and then get a countertrend rally back up to 1250-1260 into April 2012 to form the right shoulder. The downside implications of that break are quite large but if that comes to play maybe that will be the final secular bear market bottom similar to 1942 or 1982.
October 5th, 2011 at 6:36 pm
I think most are on the same page: the stock market ≠ the economy. The last decade (and counting) demonstrates this with alacrity. If we’re talking about cyclical market movements, I’d agree we’re a hair’s breath away from a new recession. But if you’re talking about secular economic cycles, I concur with other commentators who’ve posited that we’ve been stuck in virtual recession since early-2000. The only question is what to buy; when; at what price; and for how long?
October 5th, 2011 at 6:48 pm
Production is production. While the recession hasn’t ended in terms of fresh growth and demand for more labor, it has recovered alot of what it lost, which was more “real” than the credit driven fantasy the last expansion contained. So it is catching up to its real levels.
You people try to hard. I would even argue we saw some acceleration in September again. The key to knowing when you are getting some consistant push, is when it happens for about 6 straight months.
October 5th, 2011 at 8:21 pm
Isn’t it just semantics? As defined by TPTB themselves, they should NOT be talking about a “Double Dip”. In the real world, it is obvious that if these same TPTB had not pissed away Billions of the peoples money in “Stimulus” (Solynfra etc.) to float asset values, then we would still be in the earlier Recession, which by now would probably be classified as a “Depression”.
October 5th, 2011 at 10:03 pm
The chart shows the S&P; the headline talks about recession. Two different things. Sometimes the stock market gets out of sync with reality.
October 5th, 2011 at 10:04 pm
Like ‘bear market,’ the term ‘double dip’ has no formal scientific definition.
The so-called double-dip recession in 1981 started 12 months after the previous recession ended. If a fresh recession started in May 2011, it began 23 months after the previous recession ended in June 2009.
Since the average business cycle runs about 5 years, I’d call anything less than 2 years a double dip.
October 5th, 2011 at 10:51 pm
Barry,
I’ll stipulate that I may be dense on this one, but I’m not sure at all what this post means and, assuming the elusive thesis (to me) is correct, what one should conclude from it.
October 6th, 2011 at 12:51 am
BR, you are right. This is not, can’t be, and will never be a double dip recession. Impossible.
This recovery is its 9th quarter (9 quarters of positive GDP). By definition, double-dip recession has only a couple of quarters of positive GDP in between two recessions.
If this is a recession, it is a brand new recession. :-)
October 6th, 2011 at 2:39 am
I can agree, penguin. For RB and other wannabee depressionites, they’re oudda luck too. Depression: 8 quarters with at least -4% Real GDP. Greater Depression: 16 quarters with at least -8% Real GDP growth. This was a Severe Recession and its over…
The ECRI interviews conclude predicting new recession will have started in Sept or Oct. That’s very odd ‘cuz TRI gauges Sept GDP @ 2.0% pace & Oct is projected @ 1.7%. The softest month in the near future is April: 0.8% pace. There is no comparison between the current data releases and the frightful weekly deterioration monitored thru 2008.
TRI chart: http://trendlines.ca/free/economics/RecessionIndicatorUSA/USA-TRI.htm
October 6th, 2011 at 3:12 am
GDP needs to rethought rediagnosed .. the calculation is nothing without taking into account foreign trade deficit .. any job is not like all jobs .. lets say everyone in America had a job blathering on/in one of the many MSM (print, radio, tv) .. churning at work and burning MidEast gasoline (in their foreign made car) get’g to the job
our American GDP is toooo full of jobs that employ folks / overhead for the country to overcome in the balanced trade book .. the wall street traders, the lawyers, the accountants come to mind next
this post assume’g America has no high value jobs and is toooo simple X1000 .. but the trade deficit is what it is and continues to be month after month
foreign trade deficit may be the one and only fly in the ointment .. repair that (without war) and all other things will fall into a state of “Wow – that was easy”
October 6th, 2011 at 7:18 am
That’s a moot point for those that missed the interceeding expansion.
October 6th, 2011 at 8:05 am
more on GDP and trade deficit .. the reason the deficit starts and carries on is the ratio (or leverage) of a foreign workers hands & feet molding a product vs an American counterpart assembler
I hear the USAs drumbeat of > an assembly/manufacture’g country (like China) isn’t fighting fair by not allow’g its currency to revalue .. bunk .. thats why we went in the 1st place (environmental laws 2nd)
The revalue will happen when they have been raised to the standard of living across the board thru universal gravity of trade
I guess the south had it right > slavery is needed > the leverage ratio arbitrage
October 6th, 2011 at 8:10 am
oh yeah, and B of A says the 6 day outage was due to “upgrading their platform”:
http://news.yahoo.com/bank-america-appears-fixed-6th-day-221155779.html
so, you know, you got THAT goin’ for ya . . .
October 6th, 2011 at 8:48 am
By definition, double-dip recession has only a couple of quarters of positive GDP in between two recessions. — penguinsgoldenegg
Oh yeah? So why are the 1980 and 1981-2 recessions, which had twelve months of expansion between them, universally pointed out as the classic double-dip?
You’re inverting ‘two quarters of negative growth’ (as an ersatz definition of ‘recession’) into two quarters of positive growth as a criterion of double dip. And they’re BOTH wrong. Congratulations!
October 6th, 2011 at 12:34 pm
Machinehead,
Here are quarterly GDP growth readings adjusted for inflation in the period you are referring to:
+1.3%
-7.9%
-0.7% (official 1st recession)
+7.6% (1st positive)
+8.6% (2nd positive)
-3.2%
+4.9%
-4.9%
-6.4% (official 2nd recession)
+2.2%
-1.5%
+0.3%
+5.1%
Yes, that was a double dip recession back then, because there were only two CONSECUTIVE quarters of positive GDP.
Again, we are in the 9th positive quarter of GDP now, so it is impossible to call this today a double-dip, triple-dip, or any other non-sense…
~Cheers~
October 6th, 2011 at 1:21 pm
Agreed – and one has to consider the considerable growth of the other NBER measures (except employment) since the January 2009 bottom. GDP is not the only determinant of recessions.
October 6th, 2011 at 1:25 pm
You are right, if yo0ua re talking about the technical definition of recession. But the truth is, if the government sector hadn’t spent massive amoutns of money on stimulus and bailouts we would’ve still been in a recession, or even depression. The prviate sector never achieved the escaped velocity and it cannot do so until the disparity in the global wages levels off. It is like gaining 40 pounds in a year and then losing o.5 poound a year and thinking it is OK since I am not gaining weight. May be so, but I am still overweight and unhealthy.