Two of us are still adamant that a recession has started. The other is Danielle DiMartino Booth, in her best video yet. Please take a look.
GDP Rises 2.8 Percent, So What?
Following today’s GDP report, many people are crowing “no recession”.
Well, we’ll see about that. I side with the even more emphatic Danielle DiMartino Booth who says “all hell breaks loose”.
Sadly, most don’t know the definition or how it’s decided. (Hint: It’s not 2 quarters of declining GDP.)
Acknowledgment by the NBER, the official arbiter of recessions, is always late and accompanied by negative revisions.
“All Hell Breaks Loose”
At the 00:00 Mark: All Hell Breaks Loose
“I get the sense that something is going to give in the next few months and that all hell breaks loose.”
“This is the United states of America in Recession. Everyone is getting fired, across all industries. And it’s happening really fast.”
[Mish note: Danielle does not mean “everyone” literally.]
At the 17:45 Mark: Construction Hard Wall Nightmare
“This Economy hit a hard wall in October 2023. Everything I am hearing from people on the street and clients, something happened in October. And now we have builders and they have a problem. They have more completed spec homes than anytime since 2010 [Mish: 2008 if you factor in started but unsold homes]. According to Redfin, only 47 percent of the apartments that were delivered in the first quarter were move into. And there is a half-million units in the pipeline this year. Another half-million units in the pipeline next year. On the apartment side, I think they were hoping the nightmare would end in 2024, but developers have pushed completing projects out further to delay the pain.”
At the 28:00 Mark: Unemployment Rate
“The unemployment rate has politely been increasing to 4.1 percent since it troughed at 3.4 percent. When economies turn, there’s no more politeness about it.”
“That’s why we have seen in the University of Michigan data, the steepest decline in the history of data back to 1968 of people’s perception of their income declining. People know that their paychecks are shrinking and or their wife or husband is going to lose a job.”
“It’s no longer possible to gaslight the United States populace. They know something is wrong.”
At the 31:00 Mark: Full-Time Jobs
“The bottom line is we have lost 1.5 million full-time jobs. I can’t tell you how many Ubers I have been in where it’s a first-time driver.”
“Americans are working as much as they can, but Americans don’t have enough work to make ends meet. It is a tragedy that we are losing so many full-time positions, and so many people are scraping by.”
At the 34:50 Mark: A Lot of Unrest
“Something is definitely going to give in the next few months. I love metaphors. And it is a blazing hot summer across the country and I don’t find any coincidence in that. I always look for metaphors in life. A lot of people are angry and bitter, they put off starting families because they can’t afford them and they can’t afford the housing. There’s a lot of unrest.
“What I hear from the head of a food bank in Tampa, Florida, that he’s gone from 20,000 to 40,000 per month, and from the moment the doors open until the moment the doors close, there are people lining up to get food to feed their families. Something has gone wrong.”
Thanks Danielle!
Now, let’s take a look at some recent data.
July 5: Jobs Much Weaker than Expected, the Unemployment Rate Ticks Up
Counting negative revisions, there was unexpected weakness across the board in June, especially private and manufacturing payrolls.
July 8: Weak Data Says a Recession Has Already Started, Let’s Now Discuss When
I’ve seen enough. A recession has started. Let’s discuss starting with a very good indicator that has few false positives and no false negatives.
Based on McKelvey recession indicator, Danielle points to a recession start in October 2023. I think recession started in the second quarter of 2024 using a slightly different trigger.
Perhaps it’s in between. First quarter 2024 anyone?
Regardless, very few of us are this adamant, especially following today’s GDP report: Real GDP Rises 2.8 Percent in Advance Estimate
Negative revisions will be the deciding factor. We both think very negative revisions are coming.
July 17: 5 out of 12 Fed Districts Show Flat or Declining Economic Growth
Let’s tune into the Fed’s Beige Book summary of economic activity in the twelve Federal reserve districts.
This looks very recessionary because it is very recessionary.
July 18: Continued Unemployment Claims Jump to the Highest Level Since Nov 2021
After stabilizing for about a year, continued unemployment claims have surged in the last two months.
This is hard data, and it ties in with the second-quarter recession theory.
July 19: Three Top Reasons Mortgage Delinquencies Are Rising
Mortgage delinquencies are not at a seriously problematic level, but they are rising for ominous reasons.
Mortgage delinquencies are not at a seriously problematic level, but they are rising for ominous reasons.
The two top reasons for rising delinquencies are reduction of income and excessive obligations.
Reduction in income, what’s that tell you about full-time jobs?
July 25: The Yield Curve Is About to Uninvert, Is That a Recession Indicator?
The yield curve went through its longest period of inversion ever and is now on the cusp of uninverting. Some say this is a recession trigger. Let’s investigate.
This won’t lead to a recession because a recession has already started.
Q:Has that ever happened before?
A: Yes, at least twice.
Two Consecutive Recessions Without Uninverting
Construction Hard Wall Nightmare
Regarding Danielle’s “Construction Wall Hard Nightmare”, please see Homebuilder Inventory of Started But Unsold Homes Is the Highest Since 2008
There are 376,000 homes that have been started, of which 102,000 have been completed. It’s the most since the middle of the great recession.
The homebuilders’ inventory of started but unsold homes is steeply rising as sales drop. It will take price cuts to clear inventory.
Signs of Severe Credit Card and Auto Loan Stress in Generation Z
The economy is slowing and that will hit the zoomers first and the hardest, especially renters.
Tying the economic reports and political polls together please consider Signs of Severe Credit Card and Auto Loan Stress in Generation Z
There are 10 charts in the above link. Please check it out.
Nearly everything fits the recession picture. Negative revisions will take care of the rest.
Finally, please see Dudley Changes His Mind, Says “Fed Needs to Cut Rate Now” to Avoid Recession
Citing the McKelvey recession indicator, former NY Fed President Bill Dudley, wants the Fed to cut rates now.
It’s too late Bill, recession has started. And “all hell is about to break loose.”
Discussing whether we are in a “recession” or not is a question similar to the question of how many angels can dance on the head of a pin that was the top question of the tenth century.
Pundits and economists are fooled by the data claimed to be “objective” and hence the “truth”. But we’ve seen that the federal government can refine or ignore any technical term — as it did a few years ago when the numbers did, indeed, slip into “recession”. Then this word was redefined as a “technical recession”, not a “real” one lol.
So, while statistics can have value, they are incomplete as to understanding reality. And, while anecdotal evidence can be misleading, unbiased qualitative information can be informative.
In short, government statistics can range from neutral to borderline misinformation, the food bank story in the article is alarming. While I haven’t measured in any way, it seems to me there are more older cars (and license plates, and shabby vehicles) on the road in my town outside LA than when I first moved here 8 years ago. Independent, small business closures can be seen by anyone.
I don’t really care what the various government agencies say — it’s substantially lies if I don’t see it reflected somehow in my community which I think is representative of the state if not the country as well.
Somehow the 12 million illegal military age men that have entered the country have food, clothing and shelter. Think about it.
Fromm Arizona, we are still moving along hot as ever in many ways. Problem is anyone who lives here and works a job, cannot afford to move anywhere. And if you do not own something you are going to be sht ouot of luck when your lease is up. What is keeping demand so high here is the defense spending on the wars as we have many contractors in the state so when the govt spending stops we will be holding our dicks in our hands here and will fall like whiley coyote just went over a cliff.
Good questions and insightful answers. Also, DMB continues to get even more camera friendly.
I don’t expect all hell to break loose in the next few months, but the politicians in both major parties are setting up America’s children for a financial catastrophe in the coming years. The US cannot afford to be the world’s policeman indefinitely. If the politicians don’t mend their ways, it is only a question of time until the US$ goes the way of the old German Reichsmark of the early 1920’s.
I agree. I run a fleet truck washing company. And, I can tell when things are slowing down, as I wash for many companies spanning many many industries. I agree. I see it happening now.
By money flows, N-gDp is falling and R-gDp just peaked. Inflation reaccelerates next year. And the deficits must be cut.
It’s more likely that a depression has started and not a recession.
All this while the government is spending into oblivion. What “tools” will they have in their box to instill confidence when SHTF?
perhaps bird flu and lockdowns
Soup kitchens
Have wars on all 7 continents?? Beware of penguins in Antarctica.
The gaslighting about the economy and the Ukraine war will continue until the election.
Many businesses have closed in my Midwest area not so much by the economy but rather burdensome regulations. Some jobs were replaced by various inspectors, code enforcement officers and assorted planners.
Nominal numbers have been hiding a recession for over a year. Many regions and industries have been in recession for quite some time in real terms.
If you adjust for the %25 currency debasement experienced in the last 4 years, recession could have started for large regional and demographic swaths of people in 2022.
What measures were taken by government and financial institutions to reduce risk in past 15 years? That is, besides their codified scheme which David Rogers Webb describes as The Great Taking.
“What I hear from the head of a food bank in Tampa, Florida, that he’s gone from 20,000 to 40,000 per month, and from the moment the doors open until the moment the doors close, there are people lining up to get food to feed their families. Something has gone wrong.”
25 yrs of outsourcing and endless immigrant labor will do that to your economy and it’s citizens.
Really. And yet most store fronts have help wanted signs even in Tampa and St. Pete. Could this not be nothing more than low income folks needing help given the cost of groceries? The border is an issue but oddly, just as Milton Friedman explained, illegal immigration will continue as long as it continues to be illegal. Why? Because everyone benefits. The illegal benefits with work and the employer benefits with off book labor. We need to figure out a better way.
As to out sourcing, call it what it is: manufacture and retailer’s desire for margin improvement. And why do we only get to hear about some job losses when there are thousands of job gains: water front labor, warehousing and logistics, trucking, 3rd party logistics providers and on it goes.
Almost as if the exodus from blue states ends up in Florida creating demand for services in that state.
Nah can not be everything is wonderful I saw it on TV.
Everything is not wonderful and that’s true even in Florida. Florida remains a poor state with pockets of massive wealth. I would also push back on the inbound migration numbers somewhat. Yes, there is a net positive inbound migration to Florida. But the numbers are over stated. The wealthy are “moving” to Florida especially from the high tax (income tax) states. But look closely. I am in Boca and I can tell you that it’s empty. From Ft Lauderdale to West Palm: it’s empty. Where is everyone? At their homes back North! Yes, they have “moved” as far as legal domicile to obtain the income tax relief. But a large chunk has not sold their home North. That’s where they are. You have 2 inbound migration partners into Florida: the wealthy snow birds and the poor. You have some in the middle: the one’s who get economically devastated in Ft Meyers post hurricane who can’t afford the insurance or can’t afford to rebuild. The truth is
Not to be found watching FOX or MSNBC. Boots on the ground and talking to people of all stripes. A lot of restaurants here on the fold coast are closed part of the week because the population density is back up North. Just sayin’
Except the reality is America has declined as our efforts at Cheap Labor have persisted.
When you buy a toaster or refrigerator made in America some of that money goes back to that factory town or city and pays for schools and roads.
When you send that money to China it builds schools and roads in China and we’re left having to borrow that money back from China to build roads etc here.
Time to admit our mistake, start onshoring and controlling our borders and get wages back up above the Food Bank level
Wow. You’ve just made the case for inflation at the retail level. Thanks. You own it!
Yeah , keep voting democrat to see and experience the fallout . They are fucking clueless ,with absolutely no sense of human nature . Absolutely clueless . My wife is a Jewish progressive, and she believes,with her friends of course everything she hears or reads on / in her echo chamber . I do the same too … lol but I have the ability to think with a sense of objective thinking … so says I ! lol. Let the armed decide where this country goes ,as all change is determined by the barrel of a gun . I’m going with start over capitalism as I believe we are at the later stages of Capitalism now .
Wow, thank you for sharing that info, Terrible
I volunteer to take food from the Foodbank to the church that stores and gives it away . The Foodbank has been cutoff immeasurably and I deliver less and less ,the food becoming more onions and potatoesI realize that the US is upon the precipice of the haves against the have nots . Get out of the cities and arm up .
I support this message………Just practicing sorry.
And this goes with what I have heard several people smarter than me say.
The shit hits the fan and who do you think they will blame?
Does anyone really think Kamala has a shot? Hell I would not be the least surprised if during the convention the nominee is someone else.
PS: I live in a decent middle class area(but it is NY so everything is overpriced)
Most 26 to 32 year olds I know are living paycheck to paycheck, are renters as Mike says($1,600.00 per month for decent 1 Bd apt in 50 miles radius)
Some work 2 jobs, they look tired, and most tend to be liberals but are wondering just wtf is going on and are maaaaaybe starting to see the light.
PS2: more and more vacant commercial storefronts and these are not run down areas.
Those low interest rates propped up a lot of businesses that are now failing
PCE numbers bear this out. Full time struggle just to stay where a person is at.
Mish analysis to come, but today’s numbers offer zero chance for any turnaround.
Spending still exceeds income growth. Fed has gained traction against inflation which is still upwards by subjugating income. They will of course deny that fact.
Will take very little to cause a retrenchment in spending. Oh I don’t know maybe a rise in unemployment with ongoing claims steady or rising. Seems that was the subject of a post I read. Can’t quite place it tho.
Chaos in Paris
I saw that. Isn’t there chaos just outside of Paris every summer from the Islamic youth? Or did that happen already?
SPX 2022 hi/lo = 4,818-3,491 = 1,327. 1,327×1.618 = 2,147. 2,147+3,491 [Oct 2022 lo] ==> 5,638. QQQ already have reached its 1.618 target, but the Dow didn’t.
Consumers Expenditures : Murphy USA (MUSA) $10.5B and Caseys general stores (CASY) $13.8B made a new all time high. Consumers are spending money on junk food & drinks and gas. They are laughing at MickeyD. Warren Buffet Coca-Cola made a new all time high this week..
You know Mish that the Establishment (from the mainstream media to the administrative state which manages the economic statistics) are doing whatever it takes to convince enough voters the economy is doing well up to Election Day.
If Trump was in the White House, we’d have an army of James “its the economy stupid” Carvilles yelling through the mainstream media that we are in a depression.
Please keep an eye on inflation adjusted S&P 500.
Right now it is at 5399 and only 2% above its October 2021 level (5275), and 16% above its February 2021 level (4638).
https://www.multpl.com/inflation-adjusted-s-p-500
If the S&P 500 drops at least 7.5% to around 5000, then the inflation adjusted gains since the start of the Biden-Harris administration will be marginal.
.
Yeesh, get a room you two!
I gotta get into the doom-prophesy business myself. Unfortunately I already got rich by just letting my investments sit around and doing absolutely nothing during all the previous recessions. Bummer.
I don’t know if a recession is underway or on the near horizon.
I do, however, know that negative news sells like hot cakes. If it “bleeds” it leads.
I’ve also noticed that internet communities have basically turned into echo chambers. Confirmation bias permeates.
Selling at the bottom is a proven path to the poorhouse, so don’t feel bad. I did just fine by not trying to time the market.
Heck, Barry Ritholtz built an entire business based on the premise that market timing is a fool’s errand.
The economy is coming off some very unusual highs. Even a 10% fall from here would be well above historical trendlines. We are reverting to the mean in the near term, not falling off a cliff. There is a difference. There is $6.4 trillion sitting idly in money market accounts. That sounds like excessive unspent 100% liquidity wealth, not a recession indicator.
PS If the student loan forgiveness gets retroactively shut down, then yes, there will likely be a recession. Sentiment will either sober up, or some serious YOLO spending will occur. I’m putting a very high probability there will be overall sobering, and that only say 10% or less might go YOLO.
How does that get “retroactively” shut down ? You mean any money they set aside (but have not yet been paid to the student loan note holders) is returned to the Treasury Department ?
Or you mean the federal government tells the banks or note holders to return the money ?
I read as of May 2024 that Biden-Harris have given about $165 billion to student loan forgiveness for about 4.5 million Americans, and that that represents about 10% of Americans with student loan balances.
We only look at negative trends/indicators/revisions around here, friend.
When that $6.4 trillion is vaporized by the Harris administration mandatory sex-change tax laws, they’ll all be sorry they didn’t bury coffee cans full of money in the yard like me.
The money I have in a money market account is there as a cash buffer so I don’t have to liquidate stocks at the bottom of a bear market. It’s not idle excess liquidity. There are lots of retirees in the same position.
Sorry. Don’t see it yet. Jobs plentiful everywhere I go. People still spending money. People are also demanding more money due to inflation. Not fazed at all.
What kind of job? What state? And yes people are still spending money, agree there
0% FED Funds rate with a ten year US treasury yield of north of 10%?
Can’t happen here.
Tomorrow the Personal Consumption Expenditure (PCE) is reported.
I suspect it will be less than 3%. Jerome Powell said he was looking the PCE to steady at 3% or less, and its been averaging below 3% since October 2023.
So the Fed may cut the Fed Funds rate from 5.5% to 5.25% in its next meeting.
I read the Fed’s goal is to set the Fed Funds rate to around 1.5% above annual inflation.
Does the bond market believe that inflation has subsided and will remain below 3% or they do not trust the federal government reporting of inflation ?
The yield curve has been inverted for almost 18 months so it seems that the bond market thinks that the economy (and inflation) is going to cool very soon and that the Fed will lower the Fed Funds rate.
LOL the fed’s goal is to set the Fed Funds rate = annual inflation + 1.5%? How many years have they actually hit that goal? Other than very very recent, as in like this very month or so, as inflation has cooled from insane to luke warm, I believe that is basically NEVER. So stop reading whatever it is you read. You should have known that couldn’t possibly be true the instant you read it.
Heck in the Obama years and first 2 of the Biden/HARRIS Administration it was pegged at zero. So were we in price deflation for 8 years under O-dog and the first 2 under Biden? No. That goal was fiction and known to be false the instant you “read it”.
These are all ridiculously arbitrary comments. Give me (data analyst/scientist) your data and let’s see what I can justify.
I linked to jobs data, unemployment claims data, mortgage delinquencies, new home sales, and many other links. Open some of them and read.
Yeah, I tried. You have some broken links and most of them just point other “articles” on this site. I’m talking hard data that can be analyzed by someone, not just citations in an echo chamber of this site.
If the economy doesn’t improve, they’re going to have to shoot Trump again.
No they let him be the president and collapse everything on his shoulders .Do you know where the local soup kitchen is ?
How AI Is A Sign Of Collapse
Applying the adjective ‘artificial’ to what we vainly call intelligence just uses massive energy consumption and complexity to create village idiots. To hear it from the beast’s mouth, this is Jim Covello of Goldman Sachs:
https://indi.ca/ai-is-a-sign-of-collapse/
AI Big Data (and Google Maps) being used to automate ESG Compliance Materiality Assessments for Compulsory (Individualized) Climate Tax. Your 2025 Carbon User Fee will be delivered in an i-envelope to your cell phones, directly from ‘The Cloud’!
A crash? How wonderful! Bring it!
Anything is better than what we have now…..
I’m not plugged into the economic indicators like you, Mike, but working in an advertising-driven industry, we always see the signs when businesses start pulling in their horns…Dec 2023/Jan 2024 felt like the start of the shift.
Agreed. My research and development department was closed this past January 1st. It lasted only 3 years. We were designing medical equipment, nothing trendy. In previous job searches I sent out many resumes with 90% matches, and got 1 interview that lead to an offer. This time I sent out much fewer resumes, but had onsite interviews with 7 companies before receiving an offer. Half of the onsite interviews were 100% matches with my experience at competitors. I accepted an offer (100% match with a former supplier) that required relocation because I knew the job market was softening.
I was looking at the bed tax (or tourist development tax) receipts for Panama City Beach for April 2024. Its lower than the previous April’s 2022 and 2023 by about 8%.
I’ve never seen a drop like that before for the bed tax receipts in a resort town that is popular with people from Chicago to Nashville suburbs.
And I saw on news about Disney World offering discounts now.
That was a big surprise to me as all I know is Disney World prices are suppose to go up each year , regardless of how bad the economy is.
So it must be that bad of an economy, and yes even factoring in Disney trying to distance itself from a Woke agenda.
I read Disney CEO Bob Iger has reigned in its Disney Studio as far as not making any more Woke movies, and dragging down Disney profits.
https://www.mynbc15.com/news/entertainment/disney-world-slashes-admission-prices-amid-mounting-customer-dissatisfaction-lake-buena-vista-discount-discounting-costs-hotel-stays-declining-park-attendance-cincinnati-packages-deals-hopper-pass-normal-rates-all-star-movies-resort-resort-vacation-vacay
There was a surge of tourism after the pandemic, aka “revenge tourism” that is now quieting down. If you look at other indicators like airline passenger numbers, they are up by a lot.
Google reported a drop in Youtube ad revenue. I wonder if it was mostly because of a slowing economy and not because of competitors like Tik Tok.
“All Hell Breaks Loose” is something that is more associated with a crash / depression than a recession.
Just curious, is this recorded before Biden dropped from running? She sounds like Democrats want to leave a mess to Trump -assuming he will be elected in Nov- since they are gearing for 2028 election? Really? What is she smoking? There are a lot of measures in this economy that points strange directions in themselves or w/r/t each other in the context of conventional economy measures. That’s granted. I think there is no self respecting economist who can make sense of all these either. But this self admitting “conspiracy theorist” talking about decisions made by a few? Or Trump will be unifying …the same beat many main media has been “predicting” but Mr. Trump proved them wrong already getting back bashing Harris already. You have been beating the drum about recession for months now if not since last year. What will be different down the road that already not here that will make a recession happen? And please don’t give me that inverted (or un-inverted now) yield curves or revised CPI or any other data raw or revised.
I think what will be different is the amount of deficit spending will have to be cut due to out nat’l debt and interest on debt getting too high, and this reduction in spending, even if it leads to a recession or depression, is much needed to keep stabilize the country.
There’s only one thing that can save us: Universal Basic Income.
/s
I gave your comment a “thumb’s-down” which was my way of giving it a “thumbs-up!”
Socialism doesn’t work.
For those that missed it, the “/s” at the end of Sentient’s comment indicates that anything prior to “/s” should be read with sarcasm.
poll after poll says that most folks support unequal fairness over equal unfairness . Look at East Germany …. The country was divided up into huge government beurocracy vs. the plebeians ,a two part society . The .gov folks got all the perks and the plebes did all the work . Socialism is a joke , and I’m going to work as hard as the slowest least contributing worker . What a fucking joke !!
The system is broken. You might be ahead of the curve.
Save their skin.
Ahh ,I love your youthfulness and naïve look at the current goings on . I have had this argument with our housekeeper . I have found out that the fed /.gov can bail out banks with no issues regarding inflation , but as soon as you give money to the people ( ie stimulus checks ) its game on for inflation . Can you imagine the inflation with UBI ? You might find yourself with less buying power than when you started .Hope you don’t get what you wish for . Good luck with that .
Sorry I missed the /s
So the NBER is full of Obama people. Any wonder they have not declared a recession yet? Government data is a total joke. Those of you touting strong GDP/low unemployment are in for a rude awakening.
That is why I think the “massaged” economic statistics may be revised or adjusted for several months after the upcoming November election.
They are hoping this works enough to not expose the ruse, and this will convince enough voters the economy is strong right before the election.
MUSA is laughing. It made a new all time high this week.
Again as I posted previously I’ll note here in Los Angeles we’ve gone from insane levels of traffic gradually tapering for several months to where I drove to work this am during peak rush hour, took me 16 minutes versus 50 minutes several months ago. Activity is way down here.
I find DDB to be a good source of data with a cautious take on things.
For those perma-bulls on Mish’s board here remember that the FED has proven they’ll do almost anything to support the markets giving everyone a false sense of security. One of these days they won’t and the resulting downward adjustment in prices will be much larger than otherwise. Now is not the time to go in deep with margin on volatile investments
How much is the stock market overvalued ?
If the S&P 500 drops 10% then it will be only about 4% above (inflation-adjusted) its February 2020 level.
I don’t think the Fed can support the markets. It’s just people have not cared about risk for so long and continued buying overvalued assets. That will eventually change as it always has. The Feds policies are actually bad for the markets because they encourage this gambling and malinvestment behavior. We’ll either get a big crash or a long period or no gains and the crazy thing is, a lot of people will want the Fed to continue the manipulation and interference that caused the problem in the first place because they’ll believe the MSM propaganda that we need the govt to intervene in the free market.
No problem.
Just buy as much stawks as you possibly can and right now.
But be sure to sell them before the other guy starts selling his.
The exit will be so darn crowded though
At minute 41:00 is perhaps the most important and forward-looking part of the entire video: AI’s impact on education, assuming, of course, that the manner in which it is done does not dehumanize education. AI offers the potential to innovate entirely new teaching paradigms, or to make ancient ones available in the 21st century–Alexander (the Great)’s tutor was Aristotle! Kudos to Danielle.
Was a STEM HS teacher before CCSS, on into after CCSS (Government AI on the Cloud!). We were told by Authority, ‘You are not to refer to yourselves as ‘Teachers’ but as ‘Instructors’ (of AI Given Wisdom). Your job is to maintain classroom control and keep your students on task. (heads down, peck peck, aughh, peck peck). KEEP YOUR PERSONAL VIEWS AND EXPERIENCES TO YOURSELVES.’ So we had our first suicide, then our first murder, and time to find another trade. CCSS = Toxicosis.
The way out is let go the deep state DOT, FBI, CIA, DOJ, DHS, HHS, DOE, DOI, EPA parasites, cut taxes, cut oil prices, deregulate, erect high tariffs, and start building factories and jobs. Dudley, however, says we need more money for nothing and chicks for free.
I am not inclined to watch the video, but am curious about one thing: Is she a perma bear?
Not at all…
She has been on several George Gammon interviews for about 5 years.
Mish – Thanks for posting her video. She gives excellent analysis and data to back it up just like you. I like to watch all her videos.
Ford plunged 25% to hell. GOOGL is already down 13%, possibly to close Apr 25/26 gap, or the one below it ?? AMZN is backing up around 2021 high @188.65. WB protects his $3.36T AAPL. NVDA 1D BB : May 30/31, 115.82/106.92. It might cont down to closed May 22/23 gap. The MAG 7 barrel is melting. That’s a good thing.
In the 1920s “Radio” (RCA) was a high flying “tech stock” going into the crash. In the early ’60s there were the Nifty Fifty stocks, which included techs Digital Equipment, IBM, Polaroid and Xerox.
GE is the only remaining stock from Dow’s original list. In the 100 plus years of the Dow’s existence, there have been countless dropouts and replacements. Now the DOW is like a rigged fantasy football team where you get to switch in the best players whenever your team starts to lose. And when new stocks are added, their prices are magically adjusted upwardly so that a $30 stock can somehow count as $150 in the Dow composite.
So true Pete. I would give a thousand thumbs up if I could.
The way the other indexes are weighted also gives a false sense of prosperity that is just not there.
Nominal numbers have masked true values that have been decimated by 25% currency devaluation in just 4 short years.
Well, if you believe in the business cycle, and you are screaming “Recession!”, sooner or later, you’ll be right.
Credit card defaults and car repossessions are solidly in the neighborhood of 2008 crash levels. Ken McElroy (billionaire landlord) says apartment evictions are running at more than double the normal rate. Poor and middle-class people are getting squeezed by rising prices while home prices are hitting highs. These are signs of an inflationary depression, aka stagflation. The broken clocks are about to be right for a change.
Just to keep my track record of 100% wrong on predictions, I’m predicting a booming economy over the next 12 months.
LOL! To give you an idea of how bad my predictions have been, I still have rice and beans in my basement that I bought in 2008. I was preparing for the hyperinflation that was supposed to happen at any minute!
Don’t get rid of them . The time is near . They will collapse everything on Donald Trumps head . Cre , banks , everything financial ,ridiculous home prices … it all comes down with a swift kick in the pants . Thousands on the streets ….. you will be able to live in your home mortgage free , even the police won’t come to escort you out at the behest of a bank as they will have their own problems . Ain’t it grand
And I passed on buying palladium for under $200/ounce because I believed Ted Butler who said silver would hit the moon at any moment. Needless to say, palladium went up 500% while silver floundered.
GDP growth of 2.8%, an unemployment rate of 4.1%, initial claims well below 300k, and a tiny uplift in continued claims are not indicative of a recession. DDB has been sounding like a broken record for a long time now with little to show on the ground. The surest sign of recession is a steep rise in the unemployment rate and once it starts it spikes up quickly. We will be able to see it in real time. We’re not there.
she works for fox
She looks like she’s had as much work done on her face as a female fox News correspondent. You lose all credibility when you start appearing on fox networks.
But CNN is the height of credibility?
The 18 upvotes were for the sarcasm
She owns her own company. She does interviews with a lot of different networks/radio hosts/podcasts.
“The surest sign of recession is a steep rise in the unemployment rate and once it starts it spikes up quickly.”
Unemployment is a lagging indicator of a recession.
The recession has started, mark me down. Anecdotally, what I have seen from my company, I soon expect others to follow suit. Expect many surprises when companies begin releasing their earnings in the next little bit. like DiMartino has stated.
Manufacturing recession playbook
-Immediate halt of all external hiring
-% based budget cuts issued to all departments
-Immediate halt of all non essential work not critical to running the plant. (outside contractors begin to take the first hit.)
-Search for ways to possibly do outside contractor work with existing personnel.
-Inside contractors next faced with layoffs as company re-examines work in progression and planned.
-All positions re-evaluated and company personnel face layoffs.
This is a little time consuming but generally thats how it plays out in a manufacturing industry.
No. You are mistaken. The start of recessions is commensurate with a steep rise in unemployment as you can plainly see here (recessions are shaded):
https://fred.stlouisfed.org/series/UNRATE
Are you joking?
It appears you are having issues reading a chart. What I said is obvious.
-OutSource support divisions, HR, Payroll, Procurement to offshore ln’dia.
-Re-Source outside consultants to Nationals running backoffices in In’dia.
-InFill SME Retirements with no holiday no benefit gigs via ln’dia recruiters
(Went from being replaced by ln’dian, to whole office offshored to ln’dia, to now gigger through an ln’dian job placement service. My agent is in ln’dia.) Of course, offshore & tech visa conversation is radioactive under Kamala.
Used car plunged, that’s a good thing. Home builders stuck, that’s a good thing. Mortgage delinquencies rising, bank’s auctions. JP said : I wouldn’t mind 4.0%/4.1% unemployment.
New Homes Sales, blue line, is a 10 year Lazer aiming higher > 2020 high, a few years from today.
If she is right, “All hell breaks loose” heading right into the election, which will not favor Kamala (or whoever the actual Democratic nominee is).
She’s been saying a recession is imminent for almost two years now.
It’s why Mish likes her so much.
Big Mike
The GDP number baffles me, but the large majority of other indicators point to a recession s I think the GDP increase is a headfake much like the unemployment data between late 2011 and mid 2012. Because of the longstanding link between presidential elections and unemployment, I will watch the U3 release in early August with great interest. I expect 4.2% and further increases throughout the year.
Summer has been quite cool compared to other summers where I am in Minnesota. After the warmest winter of my life. The super water volcano in the pacific last year has made a mess of things plus the ENSO oscillations
Bottom line is whether the Bloomberg types are correct and we are entering a golden age because of AI and energy transition, which they view as a positive, with RISING r*
OR
You hike rates into an economy that has lower r* because debt and energy policy are a huge negative not a positive, not to mention demographics and things go to hell. 5.38% effective in what is really a 1.25% Real economy. The only reason we get absuridites like 2.8% prelim Q2 GDP is the outrageous government spending through the Inflation Enhancement Act and CHIPs.
By end next year Fed will be at 1%
We are long futures in the 2s and the 30s
The super water volcano in the pacific – I read on one of the Nature sites that this volcano put an extra 10% water vapor (which absorbs sunlight and thus heats the planet) into the atmosphere. Scientists expect the extra vapor to take up to 5 years to return to normal so we may be in year 2 of extra warm world wide temps (and we’ve had back-2-back record settings years so far).
More clouds. Clouds reflect solar energy. And guess what? Mother Nature makes those adjustments automatically.
Nope. There are almost zero clouds in the stratosphere. Very rare to see a cloud up there.
Not common globally, but not rare near the poles (especially south). Poleward of 45° during winter one has a chance of observing, but definitely rare in mid-latitudes:
https://cloudatlas.wmo.int/en/nacreous-clouds.html
I will contend that the influx of water into the troposphere elevates Td, leading to warmer nocturnal temperatures, but that isn’t a cloud issue.
Water only stays in the Troposphere for 9 days on average before precipitating out. Much longer in the Stratosphere because there is almost zero precipitation.
The Troposphere will retain more water as the temperature increases. Each 1C increase in temperature will increase the Tropospheres carrying capacity by 7%, based on Thermodynamics.
So today’s Troposphere can hold 10% more water than 150 years ago because we are 1.5C warmer.
There isn’t precipitation in the stratosphere, energy and matter transition down via tropopause folding events.
Roughly 9 days is the global average residence time of a water molecule in the lower atmosphere, but you need to be mindful that all that ejacta is now actively participating in the hydrogeologic cycle. It will take an unknown amount of time to get back to where things were, i.e. equilibrium. (and good luck trying to model such a process since it is a peerless event). Initial guesses were years-
https://www.space.com/tonga-eruption-water-vapor-warm-earth
The extra water vapor that makes its way from the Stratosphere to the Troposphere over the next several years will have very little impact. The Troposphere’s level of water vapor is rebalancing constantly. Even if all the water vapour from Tonga had ended up in the Troposphere in a single day, it would have been largely eliminated in a few weeks.
Is there “some” effect. Yes. Is it significant. No.
Nope. The Stratosphere has been cooling by about 0.5C per decade. And it will continue to cool going forward. The water vapour from the volcano “might” add 0.1C or 0.2C to parts of the Stratosphere (it varies a lot depending on location). But the effect will dissipate in a few years. It will not result in more warmth in the Troposphere.
Whereas the Troposphere (the lowest part of the atmosphere) has been warming by 0.3C per decade. Because that is where the greenhouse gasses accumulate. The extra heat gets trapped in the Troposphere which is why the Stratosphere has been cooling.
Good try though.
Nice try about what?
All I said was what I read on some science websites. That the eruption was going to temporarily increase water vapor for a few years which would increase temperatures for a few years until it dissipates.
There are multiple sites you can read about this affect. Given the last 2 years have been the hottest on record it seems that the water vapor has indeed caused a short term increase in temperatures.
Never said a word about climate change which I just don’t care about in the least.
Good try on attempting to undserstand the science here. But you still don’t get it. The volcanic eruption added extra water to the Stratosphere, not the Troposphere. If the extra water had been added to the Troposphere, it would have precipitated out in a week or two. So it would only have affected global temperatures for that week or two. Not for two years.
And the extra water in the Stratosphere may have warmed the Stratosphere by 0.1c but would have almost no effect on the Troposphere, which is where global warming is taking place. Global cooling of roughly 0.05C per year is taking place in the Stratosphere
So your claim that the last two years of global warming was caused by the volcano is simply wrong. Here is your statement.
“ so we may be in year 2 of extra warm world wide temps (and we’ve had back-2-back record settings years so far).”
Now, if you had said El Nino added a little extra warmth, you would have been right. The volcano, on the other hand, was a rounding error in comparison.
CO2 is non-denominational. At night it resonates two bands of blackbody IR, then re-radiates in all directions, some back to Earth, so we don’t freeze overnight, most on to outer space. In daytime it does the same, by re-radiating Sun’s IR, some on down to Earth, but most back to outer space. .: CO2 is a net heat-shielding gas. Earth is not a ‘greenhouse’, that’s kindergarten paddycake. Earth is a googleplex multivariate Chaos.
You sound like a climate change denier. ONLY humans should be blamed for climate change! It is nearly impossible to tax a super water volcano!
its been damn hot here in So Oregon ,the Marxist state
What’s the longest amount of time between a recession starting and NBER finally declaring it?
Great question! I have no idea but would love to see the answer.
You don’t need to be a genius economist to figure this out. The start of recessions are always accompanied with a steep, nearly vertical rise in unemployment (whether the recession is declared immediately or in retrospect). See FRED chart below; recessions are shaded. We are most certainly not there at this point.
https://fred.stlouisfed.org/series/UNRATE
Now look closer at that graph and see what happens as the economy is weakening prior to the declaration of a recession. Which is always done in hindsight; how much I really don’t know.
I care only marginally about whether we are in a recession right now. I am watching UE rise as it did just prior to the onset of all but one recession since 1980. The graph shows no examples of a sustained increase in UE that did not culminate in recession.
Thus, I think it will happen. When it will happen is less interesting to me.
Oh, I absolutely agree that a recession will happen at some point and I’ve said it on comments on Mish’s site many times before. I disagree though about when a recession will happen not being interesting. That is the most interesting part of it and has so many consequences with respect to politics and the economy.
The UE data going back to WW2 shows a strong correlation between the change in Q2 U3 and the November result, in both directions, the only exception being 18956. So that is what I am watching closely right now.
Past performance is no assurance of future results, of course, but when U3’s change in either direction has predicted the popular vote winner in 11 of 12 elections since WW2, I regard it as the best predictor I know of.
I can envision reasons why it will not work this year, one being that the Q2 increase has been from a low level and the other being if U3 now declines. My gut feel is that the first exception is more likely than the second, but I am no clairvoyant. We shall see how it works out this year.
” … the only exception being 1956.”
Except it is obviously a lagging indicator looking at that chart. Especially given that the start of recessions are declared in hindsight. Not much help predicting one. Buy, yeah, Mish is *always* early and often wrong anyway.
No. It is not a lagging indicator. It is a coincident indicator given that a recession and nearly vertical climb in unemployment happen at the same time. Look at the chart again.
Good chart! Keep in mind you can have data revisions for that chart 2 months later.
Usually 6 months. Looking at the past 6 recessions, the lag has ranged from 4-12 months.
All the data is here:
https://www.nber.org/research/business-cycle-dating/business-cycle-dating-committee-announcements
Thanks for that!
Finally had a chance to sit down and, funny, watching it now. That’s the strongest language she’s used yet.
The hyperbole just gets hotter and hotter the longer they are wrong. They may as well start stomping their feet.
This time is different. And I truly mean that. I’ve been duped by countless perma-bears over the decades (Peter Schiff “Hyperinflation by 2012”, James Turk, John Rubino, John Williams “hyperinflation by 2013”, all of Greg Hunter’s guests from 2010 to 2019, etc., etc.). The surging credit card defaults, auto repos, apartment evictions and alarming retail reports are painting a dark picture that should not be ignored. Beware, and buy some rice and beans to keep in your basement.
I remember almost 50 years ago my uncle gave me a book for my birthday titled “How to prosper in the coming bad times” I think. It’s all the same shit that the permabears are still saying today. Hilarious. The point is you are rarely going to create wealth listening to the permanently negative outliers. Optimism is what makes the world better.
No ,the Fed does