Recession

[bush_cheney2004]

Just putting it out there:

Note that the Great Depression crash is based on the Dow Jones whereas the other four crashes use the broader S&P 500 index.

These are all American metrics....the Great Depression was a world-wide phenom.

[msj]

These are all American metrics....the Great Depression was a world-wide phenom.

Shanghai Index

German Dax

Hang Seng

Nikkei

London FTSE

Brazil

Etc etc.....

Edited November 21, 2008 by msj

[bush_cheney2004]

Shanghai Index

German Dax

Hang Seng

Nikkei

London FTSE

Brazil

Etc etc.....

How many of these existed in 1929?

[msj]

How many of these existed in 1929?

For an interesting, but brief, look at some world stock indexes go to this PDF.

I know, I know - shocking that one might have to read words rather than look at pictures.

But it is also a good read with respect to the fact that declines in the stock market do not cause a decline in the economy (1987) whereas declines in the economy do cause declines in stock markets.

Of course, while this makes logical sense, too many people are too slow to the fact that statistics measuring the economy are slow to show a recession and that by the time they notice that the country/world are in recession, the stock market has already fallen.

This thread proves that point with the extensive recession denier brilliance demonstrated by BC2004....

[bush_cheney2004]

.....This thread proves that point with the extensive recession denier brilliance demonstrated by BC2004....

Actually, you have only proven my point. Your precious recession didn't really exist when crying wolf months ago. Stating the obvious today is less than spectacular.

[msj]

The root causes of the current recession go back decades.

Nevertheless, we can clearly see when it hit the fan by looking at the initial crisis in the credit markets which started in August, 2007:

The Progress of the Financial Crisis in One Picture: Mortgages, Flight to Safety, Credit Lock

As for the dating of the recession?

It always takes time and the start is always back dated by many months (often 9+) so my initial guess of February as being the start of this recession is looking not too shabby since the NBER will officially let us know for sure pretty soon.

[msj]

An interesting look at the lame duck economy that the US finds itself in right now:

Paul Krugman: The Lame-Duck Economy

Interesting parallels between 2008-2009 and 1932-33:

There is, however, another and more disturbing parallel between 2008 and 1932 — namely, the emergence of a power vacuum at the height of the crisis. The interregnum of 1932-1933, the long stretch between the election and the actual transfer of power, was disastrous for the U.S. economy, at least in part because the outgoing administration had no credibility, the incoming administration had no authority and the ideological chasm between the two sides was too great to allow concerted action. And the same thing is happening now. ...

Maybe this explains why Obama has announced his Treasury Secretary already?

[Oleg Bach]

It different now regarding any power vacuum that forms. The nation of America in interwoven in an electronic fabric that is the net. What in the previous era appeared to be vacumous, now has a structure. More and more of the public are sharing ideas and are instructing and giving advice to their fellow citizens. The only power vacuum is in Washington. This will rapidly close as input from the public arrives to the representatives to effect their decions,providing they are listening.

With participatory democracy begining to emerge though our new form of communication - you will likely see that all is well - As leaders are caught in that loose and whirling vortex that is the transfere of power - the people take up the slack. If I an you are communicating then there are millions who are working to a common goal and there is no polarization - Bush inadvertanly destroyed partizan polarization in the house and in the common body of America - The experience was so horrendous no one wants a repeat of mindless crimminal ineptness - I would say all are joining forces - to save their own asses that almost got suck down Cheney's toilet. Recently I described this union of parties as a Nazi plot - It's not - Its a hug fest and a celebration - ding dong the witch is dead...

[msj]

And it is now official.

The US has been in a recession since December, 2007 according to NBER.

My guess back in June or July was for February, 2008.

Could be worse though - the recession deniers still don't know the US is in recession.

[Oleg Bach]

And it is now official.

The US has been in a recession since December, 2007 according to NBER.

My guess back in June or July was for February, 2008.

Could be worse though - the recession deniers still don't know the US is in recession.

My personal recession is now in it's ninth year. I am aclimatized...most are not...good luck ...and I hope you can skin a rabbit and chop wood = I can...

[msj]

After going through this thread for the past many months to a year, the linked article really doesn't surprise me.

Some here have talked of "trust" and "confidence" as if the way to develop it is to deny reality and bury one's head in the sand.

The recession deniers throw every conceivable "argument" forward to try and deflect from reality.

Transparency is eschewed and, as someone has added to their signature line, the waters are muddied to make them appear deep.

We see in Latvia they are more proactive than that:

How to Combat a Banking Crisis: First, Round Up the Pessimists

[bush_cheney2004]

....The recession deniers throw every conceivable "argument" forward to try and deflect from reality.

Yet even your guess was quite wrong.....so arbitrary be the criteria these days. Perhaps you can convince the NBER to include the voodoo math of population growth in the denominator.

The Business Cycle Dating Committee of the National Bureau of Economic Research met by conference call on Friday, November 28. The committee maintains a chronology of the beginning and ending dates (months and quarters) of U.S. recessions.

The committee determined that a peak in economic activity occurred in the U.S. economy in December 2007

. The peak marks the end of the expansion that began in November 2001 and the beginning of a recession. The expansion lasted 73 months; the previous expansion of the 1990s lasted 120 months.

In any event, there is a recession.....just as before. Big deal.

[msj]

Yet even your guess was quite wrong.....so arbitrary be the criteria these days. Perhaps you can convince the NBER to include the voodoo math of population growth in the denominator.

The Business Cycle Dating Committee of the National Bureau of Economic Research met by conference call on Friday, November 28. The committee maintains a chronology of the beginning and ending dates (months and quarters) of U.S. recessions.

The committee determined that a peak in economic activity occurred in the U.S. economy in December 2007

. The peak marks the end of the expansion that began in November 2001 and the beginning of a recession. The expansion lasted 73 months; the previous expansion of the 1990s lasted 120 months.

In any event, there is a recession.....just as before. Big deal.

Awwww, don't be such a sore loser BC_2004.

Oh, and now it's the recession "just as before."

You mean the one you have been denying for the past 9 months?

The one that you said we were not in back in June/July of this year?

Good to see you finally reading below the headlines for a change. You never know, you just might learn something.

[bush_cheney2004]

Awwww, don't be such a sore loser BC_2004.

Oh, and now it's the recession "just as before."

You mean the one you have been denying for the past 9 months?

There was no recession...just as I said. It doesn't exist until an arbitrary ruling by the NBER.

The one that you said we were not in back in June/July of this year?

Correct.....did not exist...until now.

Good to see you finally reading below the headlines for a change. You never know, you just might learn something.

I've forgotton more than you know.

[Oleg Bach]

Bach in the early 80s I stood in the subway as a simpleton. There was an electronic board that was spewing out gloom an doom to the average commuter..."recession is coming" _ they had specific dates listed on when this monster would arrive....I was dumbfounded....How could they possible know when hunger was about to strike? it was odd odd to me that they were TELLING the public ecaclty when they would be poor and hardship was to arrive - as a kid I thought - THEY ARE PLANNING THIS - How the hell could they know when humaity was to lose face and faith unless they were inflicting this deficit and depression and pysco oppression? It looked like the subway riders were taking instructions from big brother "time to be poor and suffer" - to hell with that propoganda I thought.

[msj]

Correct.....did not exist...until now.

That's a good one.

A tree doesn't fall in the forest unless someone hears it.

A killer isn't a killer unless he gets caught in the act.

Etc

[msj]

Here is an interesting post with some nice pictures so that some may better understand why the NBER has called the start of the US recession for December, 2007:

Do you see what they see?

[msj]

Those numbers are odd, msj.

Never have so many people been calling a recession for so long and stretching for whatever results to support their call.

One of my favourite quotes is one like this, now making the rounds:FP

IOW, since the Chinese economy is now only growing at 9.0% per year instead of 10.1%, the world economy is about to go into "global recession".

One of the reasons I barely responded to this is because I don't pay as much attention to China as I do Canada/US/Euro (just personal interest).

But I find it interesting that China measures its real GDP differently from other countries and that such differences mean that for Q4 2008 their 6.8% "growth" is really closer to 0%.

[Smallc]

But I find it interesting that China measures its real GDP differently

Yes. I heard on the radio about a month ago that they need a 7% growth in GDP just to maintain the status quo. Otherwise, they're going backwards.

[eyeball]

One of the reasons I barely responded to this is because I don't pay as much attention to China as I do Canada/US/Euro (just personal interest).

But I find it interesting that China measures its real GDP differently from other countries and that such differences mean that for Q4 2008 their 6.8% "growth" is really closer to 0%.

production of electricity plunged 7.9% in y-o-y basis

I imagine the scientists at the church of global dimming will be watching closely to see if less smog from the coal powered generation of electricity translates into faster warming of the atmosphere. While it seems likely that less economic activity of this sort should translate into less ecological damage it may in fact only unmask the damage that's already been done and possibly even exacerbate it, ironically enough.

Edited January 24, 2009 by eyeball

[Topaz]

http://www.treas.gov/tic/mfh.txt The US has to worry about China because if China starts selling off the US treasury bills, the dollar would dive and it could become worthless and if that happens it will affect us too.

[bush_cheney2004]

http://www.treas.gov/tic/mfh.txt The US has to worry about China because if China starts selling off the US treasury bills, the dollar would dive and it could become worthless and if that happens it will affect us too.

It could, but not very likely if only China acts. Also, a good portion of Treasury securities are held by Americans.

Oh, and thanks for the honest-to-God, no foolin', working link! You are the best!

[msj]

An article added out of interest:

The Consumption Collapse Continues

Jim covered the salient aspects of the 2008Q4 advance release in an earlier post. A few additional points: (i) exports for sure are not adding to growth, (ii) the positive contribution from decreasing imports does not augur well for future growth, and (iii) nonresidential investment has now followed residential investment with vigor. But the key point is consumption is now collapsing at a rate comparable to the 1980 recession...

[msj]

Well, that's pretty bad:

GDP Shrank 6.2% in 4th Quarter, Deeper Than First Thought

This mess really is looking like the worst since the depression (which, I will point out once again, does not mean it is as bad as the depression - it is just looking worse than the recessions since that time).

Of course, more adjustments to come in future months/years so it will be a while before we really have a number nailed down.

[msj]

Neat comparison of this recession versus 7 others in the past 50 years.

This one is is currently 2 out of 8 but in a bad way.