“I Just Got Here, but I Know Trouble When I See It”


That headline and image is the cover page of the Sunday NYT Business section. It may be the closest thing I have seen to an excessively negative magazine cover indicator in a while.

In general, I am negative about the economy going forward — I think we have a better than even money chance of slipping into a recession; I am nowhere near as sanguine about a housing recovery as many of my peers; Job creation appears to be significantly below what is needed to work off the high levels of Unemployment. In short, a typical post-credit crisis recovery is underway.

Yet cover articles like this one make me want to temper my negativity:

Yet if we go beyond the Beltway and the Battery, to where most of American life is lived, the numbers don’t always add up. Yes, the Great Recession officially ended in 2009. But many millions of Americans are out of work or cannot find full-time jobs. Home prices are wobbly. The foreclosure crisis drags on. And the Occupy movement’s campaign against “the 1 percent” has underscored the ravages of income inequality.

It was, as always, a year of ups and downs in business. Washington said the nation’s AAA rating was safe, but Standard & Poor’s concluded that it wasn’t. Europe insisted that its currency was sound, but investors worry that it isn’t. Wall Street seemed perpetually on edge. After so many wild days, the American stock market ended 2011 about where it began.

On this side of the Atlantic, aftershocks of the financial crisis of 2008-9 are still reverberating, though the worst has passed. Now, how Europe’s economic troubles play out may determine whether job growth here finally picks up enough to make up for all the lost ground — and whether that 401(k) is richer or poorer next Jan. 1.

All told, interesting stuff to contemplate from a contrary perspective . . .


Contrary Indicators

I Just Got Here, but I Know Trouble When I See It
NYT, December 31, 2011

Category: Contrary Indicators, Psychology

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.

11 Responses to “NYT Sunday Business: Magazine Cover Indicator?”

  1. Singmaster says:

    For forecasts, as much as I try to discount them, I thought this post in your think tank section was a smart read:
    Loved Ritzholtz WaPo column below.

  2. arbitrage789 says:

    I’m counting on this baby to pay for my social security and Medicare.

  3. Pantmaker says:

    I hear ya on the contrary thing…but it’s gonna be a crappy year for markets and recession is baked into the cake. Get short or just get out of the way on this one. We’ll look back on this like we look back on the old “gold is going to 5000″ thing….no…it isn’t and it didn’t. Money is money…make it on the way down…who cares.

  4. howardoark says:

    I was reading this this morning

    10 Buy emerging markets: Mulligan! This was another favorite forecast for 2011, and it was wildly wrong. China and Hong Kong were down 20 percent; India and Brazil were off by a third. The decoupling thesis never goes away — that despite the interconnected global economies, some regions will do well even when their biggest trading partners slide into recession.

    And the first thing that popped into my head was that Europe was one of our biggest trading partners (Canada being the other is in trouble if commodities tank).

  5. codepoet says:

    I read the article in its completion including all the “analysis” by the experts. I don’t deny their expertise but basically they weren’t addressing the premise(s) of the article: that 2012 could very well look like 2011. Each of them focused on each of their particular areas of expertise and professional concerns…Schiller: housing, Romer: unemployment/more stimulus, Mankiw: Fed Reserve policy. I just wish they could have each been a bit more expansive in their thought processes. It would kind of interesting to hear say what Schiller thinks of unemployment. In other words, their responses were sort of rote to a certain extent assuming one follows the “economic press”.

  6. NewBob88 says:

    Buy when you want to “throw-up” … and remember to sell when you think, “Life is Good.”

    I wonder how many of the 1%’ers in Europe want their wealth to evaporate because of foolish economic policies? I also wonder about the 1%’ers in our economy and what they think about any political/Fed policy that will bring about a recession?

    It doesn’t take a rocket scientist to figure out these answers. Has anyone seen the 1%’ers moving from Palm Beach or the Rivera? My money is betting that both 1%ers (American and European) will do the right things to maintain their economies and wealth.

    This picture makes me want to “Throw-Up” which means it is time to buy equities.

  7. victor says:

    BR: “On this side of the Atlantic, aftershocks of the financial crisis of 2008-9 are still reverberating, though the worst has passed. ” I agree that that is what most of the data show, lagging and forward indicators, but I think it is still too committing. How about “…it appears the worst has passed”. Wow, I just edited BR! or attempted to…

    Now, if the Time magazine AND Business Week covers go negative simultaneously, then may be the 1982 moment you talked about in your previous appearance may be soon thereafter at hand.

    @NewBob88: “My money is betting that both 1%ers (American and European) will do the right things to maintain their economies and wealth””. This may be a bad bet as it has been proven repeatedly that these dudes DO act collectively against their interests as Greenspan confessed that he had “been taken by surprise” of this self destructive behaviour. For details, see for example yesterday’s FinCrisis1.0 and today’s beta version of future FinCrisis2.0. Karl Marx and Vladimir Lenin even bet the barn on self destructive capitalism. While wrong about capitalism, they were right on about its recently morphed form of it, still evolving and spreading devastation on the otherwise healthy body of our Republic: Crony Capitalism.

  8. pintelho says:

    HNY BR

  9. VennData says:

    What is bad about the drop in housing prices?

    The markets have cleared the Ownership Society policy mistakes and allowing the banks to leverage up (bank deregulation)

    If you owe too much, you walk.

    If you owe too much but don’t want to walk you have debt to pay down. Pay it down.

    If you want a home, they are cheaper.

    If you didn’t fall for the “Ownership Society’ crap you are in good shape since Fannie and Freddie will be weakened in the long run and there hasn’t been a depression due to Obama’s quick action (to see what woukdhave happened otherwise, see Europe)

    House prices ain’t a problem. They are a benefit.

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