I am hardly a doom and gloomer, but I just do not see a real recovery in the offing. I tend to agree that GDP will turn positive at some point this year, but that does not imply a recovery.
due to the fire sale, dealers shut down having to "sell" their inventories to other dealers, i.e. the bankruptcies, and the other is look at margin of error.
On housing, we have in '33 the HOLC, a host of freezes on foreclosures, so ya know this just makes sense to me, no job, no money to make housing payment, oops, foreclosure unless one has a major government intervention, which they did.
I'm going to write up a post on GDP specifically which is those hidden "globalization" stats but we'll see, as is. I do expect GDP to increase, but when I don't really know frankly, but with manufacturing stats where they are....I feel it's more towards 2010 than right now. but still, with 1% GDP growth I just don't see that as a huge let's pull out the yea, rah, rah, esp. with increases in population and so on. What's the total decline now? 6%?
The domain URL only if I can grab another domain name and believe me, all of the short ones are gone. Post URL's, just use copy&paste in your browser address bar, that's what I do, I don't retype in anything, without copy & paste I think the blog world "productivity" would greatly decrease. ;) There are shorter URLs but that hurts SEO, which is how people find posts through search engines.
Green shoots or Green weeds. I could see positive growth possibly 2% for a long time but certainly not enough generate jobs or sustain an economy or middle class.
Income inequality + financialization + globalization = financial crisis all over again
"Of all the statistics pouring into the White House every day, top economic adviser Larry Summers highlighted one Friday to make his case that the economic free-fall has ended.
Mr Summers has said:
The number of people searching for the term “economic depression” on Google is down to normal levels, Summers said. "
So what now? Are they going to start making policy on Google searches?
1. We know all those things happened during 1929-32. We don't have much monthly or even quarterly data, so it is tough to know which led which. We do know that at the bottom in 1933, unemployment was 25% and yet nonfarm housing starts grew about 25% from their 1933 bottom to 1934.
2. Consumer sentiment has been on an upswing for 3-4 months. The last single reading went down.
3. And exactly why should we remove gas AND autos? Give me an intellectually honest reason for removing both. That is telltale evidence of spin.
4. Recovery is likely to start very very soon (in terms of +GDP growth). It hasn't already started, which is why June coincident indicators like IP and capacity are still going downhill.
1. I don't have the stats off hand but my understanding is unemployment did indeed feed into massive foreclosures as did the dust bowl, plus deflationary crash, esp. with ag prices feed into foreclosures on farms. There were literally riots over foreclosures. I also believe FDR put into place programs which would have decoupled that correlation (need to locate) which are not in place now.
2. as I recall upswings on consumer sentiment are also one data point
3. retail sales were negative, when one removes gas, autos, and also within the margin of error. Considering the bankruptcy deals on autos plus the massive auto sales cliff freefall previously....
Sales at retailers rose 0.6 percent from May, more than forecast and the biggest gain since January, Commerce Department figures showed today in Washington. Excluding autos and gas, purchases dropped for a fourth consecutive month
4. IP & Capacity are in contraction, that's not a "bottom", it's a contraction. Free fall has stopped but they are at record lows, capacity utilization at an unbelievable 68 stats. That's not a "bottom" that's a less slope than last month, that's not stabilization, that's "less horrific than last month".
Since when have I jumped on the Economic Armageddon bus? I've always been on the long, slow decline to 3rd world status joy ride.
I'm really saying the bottom of a cliff one still can bounce around but a bottom of a cliff is a bottom of a cliff not a new hill as if the plateau at the top of the cliff never existed.
1. Did unemployment feed back into areas like housing in 1933 when it was at 25%? (Hint: No!)
2. Consumer sentiment went down in the last 2-4 week measure, true, but that is eactly one data point.
3. Retail sales are NOT negative. Retail sales have been generally stable for the last 3-6 months, and the only way Ritholtz et al were able to spin spin spin the last one negative was to take out cars (the big kahuna of durable retail sales) as well as Oil. Well, yeah, you take out positive retial sales, what you are left with is negative. There is no intellectually honest basis on which you can take out both autos AND oil.
4. IP and capacity are coincident, not leading, indicators and now even those are showing the first signs of bottoming.
And, sorry, but those who have wet dreams of economic Armageddon keep having to move the goal posts to dismiss the data they don't like.
It would be interesting to find any sort of differences between Japan's housing bubble, the Dot Con bubble and the current situation for more fine tuning.
but I do not see these stats as positive. We just had more bad unemployment data, record foreclosures, IP & Capacity are still in contraction, consumer sentiment is down, minus oil, retail sales are still down and here's a weird one that I'll call a bell weather, video game market just crashed and burned, down 31%, which is classified as "recession proof" entertainment.
I don't see the love here and don't take it personally, I'm just looking at the stats you are showing plus many others.
I'm not claiming in any way we're still in free fall, on this score I agree, but to imply somehow the world will be all sunshine in a couple of months, I don't think we're looking at the same stats and cycles sometimes.
I don't think I'm moving goalposts at all, I'm looking at the same stats you are and I don't see for example, IP at rock bottom lows, record lows, being a positive statistic.
I mean GDP turns in 2010 or in a couple of months....
With unemployment continuing it's upward slope past estimates, looking to me to hit 11%, not 10% in 2010, I don't see how that is not going to feedback into areas like the housing market and if not keep it this |____ scenario with some variance bouncing around in the trough area to even another joy ride (sic) down the rollercoaster again.
Also, in those housing stats, it says you have to take windows of data, moving averages. I mean seriously with inventories and a nice little padding of 3.2 foreclosed properties, how can this not depress housing prices further?
I love ya NDD but I just don't get the joy fest and of course EP is all about differing views, analysis.
When you have to go digging for margins of error, and speculate about interest rates in the future, as opposed to adding data to data to data, almost all of which is now nearly shrieking a return to positive GDP growth in the near future, it's time to examine how objectively you are looking at the data vs. letting your ideology get in the way.
As Rob Oak points out downthread, the permits data is outside of the margin of error, so go look for a different spin spin spin on that too.
As for Ritholtz' "take down", relying on raw year-over-year rates of growth or decline (except for seasonality) is a terrific way to completely miss turning points.
Why Rob thinks I am drinking "joy juice" is that the goalposts keep moving to try to rebut the positive data that has been coming in. First it was "It's only the second derivative!" and then it was "It's only stabilization!", and now it's turning into "It's only weak growth!" WAAH! WAAH!! WAAAAAAHHHH!!!!
I was thinking we need, in big red screaming letters, just how important the manufacturing sector is to overall GDP as well as high paying wage growth (as well as twin deficit reduction).
Have you noticed this???? The most critical sector gets almost zero press in the financial MSM, except some liberal arts fluff piece, as if manufacturing is just so passé?
I feel like screaming, hey financial journalist dude, is your liver passé? Can you live now without your lungs because they are just too out of economic fashion? ;)
Yeah, that playing states off of each other in a race to the bottom, similarly to how nations are played off of each other by MNCs to be the ultimate slave labor pool was a fantastic question/commentary, as well as your amplification on this problem and probably why all of the incentives (beyond robbing the taxpayer) are just on paper.
I won't disagreeing with you on companies and investing in the communities they operate. But as mentioned, if our "Bennedict Arnold" companies won't do it we have two other choices. We can get foreign investors or promote new business startups. I prefer the latter, but if it can't happen, then the former.
Price is there as a cost mechanism. Regarding information to the end user, price does this very well. If something is too expensive, and demand is elastic, quantity sold will be less than if the product/service was at a lower price. What else would you include on a product or service, outside of any product information and the price of that product?
Regarding Wal Mart, I for one am highly skeptical of their recent moves. What could be happening with them is that they see a government that for once may actually go after them. Be it in health care plans or green stuff. So they're going to come out first to look like a good guy to the government. On CNBC, there was an analyst who talked to someone at the Arkansas retail giant, and he basically hinted that they freaked out when they saw what happened at GM or the banks. But I also suspect that their move into healthcare, for example, has more to do with the rumors of the company doing two things a) entering the field with their own services and b) they've been structuring the company to absorb such costs and to promote this new health agenda to the detriment of their competitors.
I totally agree on the incentives model, especially regarding taxation. The 50-state industrial policy chaos that the video hit on was something I hit on in my last piece and agree we need better national coordination. At the end of the day, we aren't in a real free trade system, just a fraud of it. We need to start playing the game the way our so-called friends are, that is look out for our national interests first. Sadly, we have a government, and really it doesn't matter if their Democrats or Republicans, who either cannot comprehend or do not care about the reality of the situation. Once more, kudos on the piece and video.
had some exception points and that absurd corporate blast on "Buy American" which was barely anything and ya know, who cares that's the entire theoretical basis of Keynesian stimulus so what's the point in doleing out a massive wad of cash if one isn't going to follow the theory of temporary public expenditures direct to income (wages) of the citizens, directly into domestic spending, i.e. "buy American"...
So, any attempts to do a Keynesian Stimulus by the theory itself get blasted and I suspect strongly some of these same cats are blasting the Stimulus saying it didn't work...
well, from my view, it was never going to work because they did not follow the theory from the get go.
Have you noticed also in D.C. that manufacturing is a truly dirty word, like anyone working for manufacturing policy, lobbying for legislation probably gets a seat at best at the kiddie table in the kitchen?
If you see any "Dorgan style" of floor speech with huge numbers on big charts, showing just how critical to job creation, GDP manufacturing is, please capture the video and let's post it.
I also haven't been tracking on GM. When I saw they had in place no one who knew anything about making cars in the executive team, wet behind the ears administrators working on this....the idea the government was stepping into GM to save a domestic auto industry didn't seem valid to me....so what is going on now?
Thank Gomory, I doubt he's getting rich off of any of his efforts. ;)
Another thing that would be awesomely cool is if NAF enabled instant messaging stream, so the virtual audience could type in some questions and then the moderator could ask a few of them. I don't know about NAF but in terms of speakers, they are inviting some very good experts to lecture I noticed.
I am hardly a doom and gloomer, but I just do not see a real recovery in the offing. I tend to agree that GDP will turn positive at some point this year, but that does not imply a recovery.
I use twitter and you only have 140 characters. The long URLs make it difficult to post something on twitter.
due to the fire sale, dealers shut down having to "sell" their inventories to other dealers, i.e. the bankruptcies, and the other is look at margin of error.
On housing, we have in '33 the HOLC, a host of freezes on foreclosures, so ya know this just makes sense to me, no job, no money to make housing payment, oops, foreclosure unless one has a major government intervention, which they did.
I'm going to write up a post on GDP specifically which is those hidden "globalization" stats but we'll see, as is. I do expect GDP to increase, but when I don't really know frankly, but with manufacturing stats where they are....I feel it's more towards 2010 than right now. but still, with 1% GDP growth I just don't see that as a huge let's pull out the yea, rah, rah, esp. with increases in population and so on. What's the total decline now? 6%?
The domain URL only if I can grab another domain name and believe me, all of the short ones are gone. Post URL's, just use copy&paste in your browser address bar, that's what I do, I don't retype in anything, without copy & paste I think the blog world "productivity" would greatly decrease. ;) There are shorter URLs but that hurts SEO, which is how people find posts through search engines.
or whatever you call it. Would a permalink work?
Green shoots or Green weeds. I could see positive growth possibly 2% for a long time but certainly not enough generate jobs or sustain an economy or middle class.
Income inequality + financialization + globalization = financial crisis all over again
"Of all the statistics pouring into the White House every day, top economic adviser Larry Summers highlighted one Friday to make his case that the economic free-fall has ended.
Mr Summers has said:
The number of people searching for the term “economic depression” on Google is down to normal levels, Summers said. "
So what now? Are they going to start making policy on Google searches?
These people are freak'in crazy!!!!!
1. We know all those things happened during 1929-32. We don't have much monthly or even quarterly data, so it is tough to know which led which. We do know that at the bottom in 1933, unemployment was 25% and yet nonfarm housing starts grew about 25% from their 1933 bottom to 1934.
2. Consumer sentiment has been on an upswing for 3-4 months. The last single reading went down.
3. And exactly why should we remove gas AND autos? Give me an intellectually honest reason for removing both. That is telltale evidence of spin.
4. Recovery is likely to start very very soon (in terms of +GDP growth). It hasn't already started, which is why June coincident indicators like IP and capacity are still going downhill.
1. I don't have the stats off hand but my understanding is unemployment did indeed feed into massive foreclosures as did the dust bowl, plus deflationary crash, esp. with ag prices feed into foreclosures on farms. There were literally riots over foreclosures. I also believe FDR put into place programs which would have decoupled that correlation (need to locate) which are not in place now.
2. as I recall upswings on consumer sentiment are also one data point
3. retail sales were negative, when one removes gas, autos, and also within the margin of error. Considering the bankruptcy deals on autos plus the massive auto sales cliff freefall previously....
4. IP & Capacity are in contraction, that's not a "bottom", it's a contraction. Free fall has stopped but they are at record lows, capacity utilization at an unbelievable 68 stats. That's not a "bottom" that's a less slope than last month, that's not stabilization, that's "less horrific than last month".
Since when have I jumped on the Economic Armageddon bus? I've always been on the long, slow decline to 3rd world status joy ride.
I'm really saying the bottom of a cliff one still can bounce around but a bottom of a cliff is a bottom of a cliff not a new hill as if the plateau at the top of the cliff never existed.
1. Did unemployment feed back into areas like housing in 1933 when it was at 25%? (Hint: No!)
2. Consumer sentiment went down in the last 2-4 week measure, true, but that is eactly one data point.
3. Retail sales are NOT negative. Retail sales have been generally stable for the last 3-6 months, and the only way Ritholtz et al were able to spin spin spin the last one negative was to take out cars (the big kahuna of durable retail sales) as well as Oil. Well, yeah, you take out positive retial sales, what you are left with is negative. There is no intellectually honest basis on which you can take out both autos AND oil.
4. IP and capacity are coincident, not leading, indicators and now even those are showing the first signs of bottoming.
And, sorry, but those who have wet dreams of economic Armageddon keep having to move the goal posts to dismiss the data they don't like.
I see almost a war brewing between the green shoots and the brown weeds analysis camps.
One thing I find fairly awesome on EP is just how many people use data, charts, analysis in their posts.
So, I hope all are respectful and just debate the data....
cause it would be god awful it the focus was on "positions" as if we're in some tug o war.
BTW: I will officially declare myself a member of the green weeds, brown shoots camp.
just for the emotional bubble graph alone!
It would be interesting to find any sort of differences between Japan's housing bubble, the Dot Con bubble and the current situation for more fine tuning.
but I do not see these stats as positive. We just had more bad unemployment data, record foreclosures, IP & Capacity are still in contraction, consumer sentiment is down, minus oil, retail sales are still down and here's a weird one that I'll call a bell weather, video game market just crashed and burned, down 31%, which is classified as "recession proof" entertainment.
I don't see the love here and don't take it personally, I'm just looking at the stats you are showing plus many others.
I'm not claiming in any way we're still in free fall, on this score I agree, but to imply somehow the world will be all sunshine in a couple of months, I don't think we're looking at the same stats and cycles sometimes.
I don't think I'm moving goalposts at all, I'm looking at the same stats you are and I don't see for example, IP at rock bottom lows, record lows, being a positive statistic.
I mean GDP turns in 2010 or in a couple of months....
With unemployment continuing it's upward slope past estimates, looking to me to hit 11%, not 10% in 2010, I don't see how that is not going to feedback into areas like the housing market and if not keep it this |____ scenario with some variance bouncing around in the trough area to even another joy ride (sic) down the rollercoaster again.
Also, in those housing stats, it says you have to take windows of data, moving averages. I mean seriously with inventories and a nice little padding of 3.2 foreclosed properties, how can this not depress housing prices further?
I love ya NDD but I just don't get the joy fest and of course EP is all about differing views, analysis.
When you have to go digging for margins of error, and speculate about interest rates in the future, as opposed to adding data to data to data, almost all of which is now nearly shrieking a return to positive GDP growth in the near future, it's time to examine how objectively you are looking at the data vs. letting your ideology get in the way.
As Rob Oak points out downthread, the permits data is outside of the margin of error, so go look for a different spin spin spin on that too.
As for Ritholtz' "take down", relying on raw year-over-year rates of growth or decline (except for seasonality) is a terrific way to completely miss turning points.
Why Rob thinks I am drinking "joy juice" is that the goalposts keep moving to try to rebut the positive data that has been coming in. First it was "It's only the second derivative!" and then it was "It's only stabilization!", and now it's turning into "It's only weak growth!" WAAH! WAAH!! WAAAAAAHHHH!!!!
I was thinking we need, in big red screaming letters, just how important the manufacturing sector is to overall GDP as well as high paying wage growth (as well as twin deficit reduction).
Have you noticed this???? The most critical sector gets almost zero press in the financial MSM, except some liberal arts fluff piece, as if manufacturing is just so passé?
I feel like screaming, hey financial journalist dude, is your liver passé? Can you live now without your lungs because they are just too out of economic fashion? ;)
Yeah, that playing states off of each other in a race to the bottom, similarly to how nations are played off of each other by MNCs to be the ultimate slave labor pool was a fantastic question/commentary, as well as your amplification on this problem and probably why all of the incentives (beyond robbing the taxpayer) are just on paper.
I won't disagreeing with you on companies and investing in the communities they operate. But as mentioned, if our "Bennedict Arnold" companies won't do it we have two other choices. We can get foreign investors or promote new business startups. I prefer the latter, but if it can't happen, then the former.
--------------------------------------------
www.venomopolis.com
Price is there as a cost mechanism. Regarding information to the end user, price does this very well. If something is too expensive, and demand is elastic, quantity sold will be less than if the product/service was at a lower price. What else would you include on a product or service, outside of any product information and the price of that product?
Regarding Wal Mart, I for one am highly skeptical of their recent moves. What could be happening with them is that they see a government that for once may actually go after them. Be it in health care plans or green stuff. So they're going to come out first to look like a good guy to the government. On CNBC, there was an analyst who talked to someone at the Arkansas retail giant, and he basically hinted that they freaked out when they saw what happened at GM or the banks. But I also suspect that their move into healthcare, for example, has more to do with the rumors of the company doing two things a) entering the field with their own services and b) they've been structuring the company to absorb such costs and to promote this new health agenda to the detriment of their competitors.
--------------------------------------------
www.venomopolis.com
A month ago I received this in an e-mail. I can't vouch for the validity of the info but it could be true.
"Want to buy US made products? BUY USA by watching for "0" at the beginning of the number. We need every boost we can get!
f the first 3 digits of the barcode are 690, 691 or 692, the product is MADE IN CHINA.
471 is Made in Taiwan .
This is our right to know, but the government and related departments never educate the public, therefore we have to RESCUE ourselves.
690-692 … then it is MADE IN CHINA .
00 - 09 … USA & CANADA
30 - 37 … FRANCE
40 - 44 … GERMANY
47 ... Taiwan
49 … JAPAN
50 … UK
I totally agree on the incentives model, especially regarding taxation. The 50-state industrial policy chaos that the video hit on was something I hit on in my last piece and agree we need better national coordination. At the end of the day, we aren't in a real free trade system, just a fraud of it. We need to start playing the game the way our so-called friends are, that is look out for our national interests first. Sadly, we have a government, and really it doesn't matter if their Democrats or Republicans, who either cannot comprehend or do not care about the reality of the situation. Once more, kudos on the piece and video.
--------------------------------------------
www.venomopolis.com
had some exception points and that absurd corporate blast on "Buy American" which was barely anything and ya know, who cares that's the entire theoretical basis of Keynesian stimulus so what's the point in doleing out a massive wad of cash if one isn't going to follow the theory of temporary public expenditures direct to income (wages) of the citizens, directly into domestic spending, i.e. "buy American"...
So, any attempts to do a Keynesian Stimulus by the theory itself get blasted and I suspect strongly some of these same cats are blasting the Stimulus saying it didn't work...
well, from my view, it was never going to work because they did not follow the theory from the get go.
Have you noticed also in D.C. that manufacturing is a truly dirty word, like anyone working for manufacturing policy, lobbying for legislation probably gets a seat at best at the kiddie table in the kitchen?
If you see any "Dorgan style" of floor speech with huge numbers on big charts, showing just how critical to job creation, GDP manufacturing is, please capture the video and let's post it.
I also haven't been tracking on GM. When I saw they had in place no one who knew anything about making cars in the executive team, wet behind the ears administrators working on this....the idea the government was stepping into GM to save a domestic auto industry didn't seem valid to me....so what is going on now?
Thank Gomory, I doubt he's getting rich off of any of his efforts. ;)
Another thing that would be awesomely cool is if NAF enabled instant messaging stream, so the virtual audience could type in some questions and then the moderator could ask a few of them. I don't know about NAF but in terms of speakers, they are inviting some very good experts to lecture I noticed.
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