Danielle DiMartino Booth has been beating the drums for weeks that the US is in recession and has been since October. No so fast says Jim Bianco. The lead chart shows Booth’s view.
Warning: This is a lengthy post. I review the positions of Jim Bianco and Danielle DiMartino Booth.
I also explain how I went wrong on my recession forecasts and why I believe Booth is early in her position that a recession started in October 2023.
Finally, I discuss when I think recession is likely.
The Pending Recession
Jim Bianco
Expansions do not die of old age; they are murdered.
This has been true for the last 50 years:
2020 = COVID
2008 = Financial Crisis, $145 crude oil
2001 = Tech crash/9/11
1991 = Iraq invaded Kuwait (400% rise in crude)
1982 = 200-year high in interest rates
1980 100-year high in inflation
1974 = Arab Oil EmbargoToo many think the economy will either roll over or “pop.” It does not work that way. It does not die of old age.
So, all the talk about deficits and inflation will not cause a recession. However, these issues can, and probably do, make the economy vulnerable to “murder.” But it will still take that murder to cause a recession. Think pandemic, spiking crude oil, political crisis, all of the above simultaneously. This unexpected event(s) could be later this year, in 10 years, or anywhere between. It really cannot be predicted, like COVID, especially by economists. This is not a knock on economists. No amount of analysis of payroll numbers or inflation reports can tell you a pandemic, a spike in oil prices, or a political crisis is coming.
How do we know when the murder has happened? Investors lose a lot of money. A recession means that even investors’ good ideas act like bad ones.
Expansions Don’t Die of Old Age
Bianco has had a hot hand. Since I have been following him, no one has called the economy better.
When most, including me, were discussing or predicting recession, and nearly everyone else predicting a soft landing, Bianco proposed the “No Landing” scenario.
By no landing, Bianco meant continued inflation but no recession, thus higher-for-longer Fed interest rates than most believed, coupled with sticky inflation.
That has been the right call. Congrats to Bianco.
I disagree with one point above, Bianco’s very last paragraph “How do we know when the murder has happened? Investors lose a lot of money. A recession means that even investors’ good ideas act like bad ones.“
Stock markets are terrible predictors. The market was at a then all-time high in November of 2007. Recession hit two months later with hardly any overall losses, and the Fed in total denial. I think a recession was obvious then, but Bernanke denied one in March of 2008 when the recession was already strongly underway.
But this is nitpicking. Bianco makes a very good case.
With that, let’s turn our attention to Danielle DiMartino Booth who has stated for weeks a recession has started.
Danielle DiMartino Booth
That was on May 2, repeated May 9.
Epic Bankruptcies
The Recession Indicator
Liquidations, Not Just Bankruptcies
Sahm “Real-Time” Recession Indicator
You can download a chart on the St. Louis Fed. It’s called the Real-time Sahm Rule Recession Indicator (SAHMREALTIME)
Please consider The Sahm Rule: Step by Step written December 7, 2023.
Smooth out the monthly ‘bumps and wiggles.’
Being data-driven is good, but being data-ridden is not. So, the Sahm rule uses the 3-month average of the monthly unemployment rate, not the monthly rate. Calculate that average in each month and create a new series, “3-Month Average of the Monthly Rate.”
Look back over the prior year.
The logic of the Sahm rule is that when the unemployment rate starts rising, it often picks up steam, and we end up in a recession. A key input to the rule is the lowest value of the 3-month average in the prior 12 months. Note the 12-month look-back does not include the current month.
Put it all together.
The most important part of the Sahm rule is the change. Take the current value of the 3-month average and subtract the 12-month low, and if the difference is 0.50 percentage point or more, then we have historically been in a recession.
In October 2023, the Sahm rule was 0.33 percentage point. That’s below the trigger but also up notably from its values earlier this year.
In closing.
I created the Sahm rule, and it’s on me to communicate it well. I try. If you have any questions, please add them to the comments.
Key Points
- Sahm computes her indicator to two decimal points. However, the input data is one decimal place. Mathematically, you cannot have two decimal points of accuracy when the input is only to one place. (Not that anyone places a lot of faith in these numbers in the first place)
- Instead of using Sahm’s numbers directly, I used labor force and unemployed numbers to calculate the unemployment rate and 3-month moving average unemployment rate to two decimal places.
- By calculating the numbers myself, I can go back further, and did. My chart starts in 1948.
- The McKelvey recession indicator is at 0.3 percent, whereas the Sahm rule is at a much higher 0.5 percent, reducing the number of false positives.
Here is my chart again for ease in reading.
I count five false positive using 0.3 percent as the rule but only one false positive if the trigger is 0.5 percent.
Did Sahm Invent the Methodology?
EconBrowser Calculation
Econbrowser looks at the data in his post In Recession? Real Time vs. Final Revised Data
Notice there are no false negatives. However, this graph (apparently) uses revised data. In real time, one would get a different set of results.
My chart only shows one false positive in the timeframe the Econbrowser chart shows three.
Sahm Real-Time Lags
- 1953-08: Late 3 months
1957-09: Late 2 months
1960-05: Late 5 months
1970-01: Late 2 months
1973-12: Late 7 months
1980-02: On Time
1981-08: Late 3 months
1990-08: Late 2 months
2008-01: Late 1 month
2020-03: Late 1 month
That is with revised data. Since revisions are negative, real-time data would generally be worse.
Sahm also had a false positive in 1959-11 at 0.59 repeating in 1959-12 at 0.51. Does this explain why Sahm starts tracking in 1960?
McKelvey Five False Signals
- 1951-11: 0.35
1957-07: 0.31
1959:10: 0.39 with 1959-11 at 0.59 and 1959-12 at 0.51
1963-03: 0.34 with 1963-04 at 0.31
2003-05: 0.31 with 2003-06 at 0.45 (6 consecutive months above 0.30)
If we conveniently start at 1968 and add a new rule that the indicator does not reset until it first drops to zero (the 2003 low was 0.17) then we can erase the 2003 false signal.
Whereas Sahm is late, McKelvey is early.
We can fix that with another new rule stating that the indicator needs to be above 0.30 for two consecutive months. But that still does not fix 1959 when the indicator fell all the way to -0.25 before crossing the 0.3 percent trigger.
Perfect Track Record?
Sorry, that is wrong. Neither has a perfect track record.
But I am very familiar with being too early. I have a history of being early and in 2022, flat out wrong.
“Sure Looks Like Recession Started in 2022 Q4“
The Philadelphia Fed has a measure called GDPplus that’s a blend of GDP and GDI, not an average. It appears to lean more heavily on GDI.
I discussed the setup August 30, 2023 in Philadelphia Fed GDPplus Measure Sure Looks Like Recession Started in 2022 Q4
In 100 percent of the cases, with no false signals, no misses, and no lead times more than two quarters, every time GDPplus had two consecutive quarters of negative growth, the economy was in recession.
I was positive we were in recession. Confirmed for four months, with what I thought was an indicator that gave no false signals.
What Happened?
Positive Revision Shock!
The Philadelphia Fed revised GDPplus higher reversed string of negative GDPplus numbers.
As revised, there was not a second consecutive quarter of negative GDPplus.
Q:Why the revision?
A: Don’t blame GDPplus or the Philadelphia Fed. GDPplus is subject to huge revisions when the BEA revises GDP and GDI.
GDI lags GDP by at least one month. And the GDP report lags the economy greatly. For example, The BEA released the advance (preliminary) estimate GDP for 2024 Q1 on April 25, 2024.
The second estimate of GDP for 2024 Q1 will be on May 30. That is also when the preliminary estimate of GDI is released.
GDPplus Since 1960
GDPplus Recession Track Record
That’s a very impressive track record, with no misses and no false positives as long as one waits for the second revision to GDI.
Where Are We Now?
In 2022, we had two consecutive quarters of GDP as noted in the square box above, but that is not the definition of a recession.
Real final sales were +1.5 percent. A huge inventory adjustment took GDP to -0.6 percent but the NBER discounts that. So do I, and I said so in real time.
Now we have pretty strong numbers.
Shocks Run in Two Directions
Q: What happened to stave off recession in 2022Q4-2023Q1?
A: A huge tax cut coupled with big jumps in minimum wages in 27 states!
Please recall my February 28, 2023 post Explaining a Huge Inflationary Jump in Disposable Personal Income
Disposable personal income is income after taxes. Since the tax rate went down, income went up.
Personal Income Percent Change From Previous Month
Anything Else? Yes!
Minimum Wage in States with Increases in 2023
In every 2023 paycheck, low-to-medium wage earners got more money in their paychecks relative to 2022 due to tax cuts.
In addition, there were minimum wage hikes in 27 states.
Recession Murdered
Q: How did the tax cuts happen?
A: The IRS Changed its Tax Brackets for 2023.
Americans could save on taxes this year because of historically large inflation adjustments set by the IRS.
The agency adjusted many of its 2023 tax rules to help taxpayers avoid “bracket creep.” That’s when workers get pushed into higher tax brackets due to the impact of cost-of-living adjustments to offset inflation, despite their standard of living not having changed. On average, the IRS pushed up each provision by about 7% for 2023.
I am not aware of anyone who saw this coming. I didn’t. The above link is from February of 2023.
Did Biden influence this or is this standard IRS procedure to cut taxes?
Bianco discussed the economy being murdered. In this case, a pending recession was murdered on sight, ironically, by the IRS.
Tax Cuts Explain Surge in Consumer Spending in 2023
On January 29, 2024, I commented Tax Cuts, Not Bidenomics Explains Surge in Consumer Spending in 2023
On January 1, 2023, 38 states had noteworthy tax changes. 37 of the changes put extra money in people’s pockets. Here’s the result in pictures.
Another Positive Shock
The ridiculously named Inflation Reduction Act was another positive shock.
The IRA introduced consumer tax credits for EVs, gave inflation rebates to low income groups, and handed money to auto makers to invest in EVs.
But what’s happening now?
Negative Revisions Multiple Places
Negative revisions are running rampant in jobs, homes, and durable goods.
On May 24, I commented Another Massive Revision, This Time Durable Goods, What’s Going On
The Commerce Department revised March durable goods orders from +2.6 percent to +0.8 percent. Now it reports a 0.7 percent gain vs an expectation of -0.5 percent.
Also see New Home Sales Sink 4.7 Percent on Top of Huge Negative Revisions
Arguably, the biggest negative revision is in jobs.
Expect Big Negative Revisions to BLS Monthly Jobs
On April 24, the BLS released a little-read jobs report that shows reported jobs in 2023 may be wildly overstated. In turn, that means GDP is likely overstated as well.
On April 25, I commented Expect Big Negative Revisions to BLS Monthly Jobs in 2023, GDP Too
Business Employment Dynamics (BED) Chart Notes
- Data is from the BLS Business Employment Dynamics (BED) report and the BLS monthly jobs reports (CES).
- BED data is less timely but far more accurate than the BLS monthly jobs reports/
- For 2023 Q3, the BED reports shows gross job gains of 7.559 million and gross job losses of 7.751 million for a net loss of 192,000 jobs.
- The BLS monthly jobs reports show a gain of 640,000 jobs.
56 percent Think We Are In Recession
It seems Ed Krassenis, shall we say, mystified as to why 56% of Americans “incorrectly think we are in recession” Perhaps it’s because they’re CORRECT. Per the BLS,job losses began in Q3 2023 & CONTINUED into Q4 2023 per today’s data.
Q: How does the QCEW and BEDs reports relate to the unemployment rate?
A: The Establishment Survey (monthly jobs report), QCEW, and BEDs measure jobs with varying degrees of accuracy. BEDs and QCEW are highly accurate. Unemployment is based on the household survey, a completely different dataset.
With the unemployment rate, you are either employed or you aren’t. However, not employed does not mean unemployed. One has to be seeking employment to be counted as unemployed. In contrast, someone working multiple part-time jobs is counted multiple times in the jobs reports.
Q: Are those job losses reflected in retail sales?
A: Yes.
Real GDP, Real Final Sales, Real GDI
We do not have real GDI for 2024 Q1 yet, but it would take one hell of a set of negative revisions to wipe away Real GDI of 4.8 percent in 2023 Q4.
As for sales, RFS was 2.0 in 2024 Q1 and a whopping 3.9 in 2023 Q4.
Recession Started?
Like Booth, I expect more negative revisions but not enough to revise away a 2023-Q4 GDI print of +4.7 percent, a RFS print of 3.9 percent, and a GDPplus print of 3.4 percent.
The idea that a recession started in October of 2023 seems far fetched at the moment.
Even 2024 Q1 seems early, pending the GDI report and the related GDPplus number.
The Fed’s Big Problem
On February 20, 2024 I noted The Fed’s Big Problem, There Are Two Economies But Only One Interest Rate
Those renting and looking to buy a home are very angry at rent prices up at least 0.4 percent for 32 straight months while home prices are the least affordable in history.
No one wants to trade a 3.0 percent mortgage for a 7.5 percent mortgage so the housing market is essentially locked up.
For discussion, please see Home Prices Hit New Record High, Don’t Worry, It’s Not Inflation
There is no solution to this self-made Fed problem. The Fed has never admitted it created this mess or any mess.
New Home Sales Huge Negative Revisions
New Home Sales plunged in April. And the Census Department completely revised away the fictional 8.8 percent rise in March.
For discussion, please see New Home Sales Sink 4.7 Percent on Top of Huge Negative Revisions
Discretionary Spending Tumbles at Target
On May 22, I noted Discretionary Spending Tumbles at Target, Shares Drop 10 Percent
Target CEO Brian Cornell said the results show “continued soft trends in discretionary categories.”
The interesting word above is “continued”.
EVs Hit Brick Wall
The Inflation Reduction Act provided stimulus for a while, but it also caused the auto manufacturers to gear up for cars that few want now.
EVs have hit a brick wall. IRA stimulus has gone into reverse.
On April 2, I commented Tesla’s Deliveries Drop for First Time Since 2020, It’s Demand Not Supply
On April 15, I noted Elon Musk Fires 10 Percent of Tesla Workforce, Prepares for “Next Phase of Growth”
On April 26, I noted Ford Loses $132,000 on Each EV Produced, Good News, EV Sales Down 20 Percent
And repetitive minimum wage hikes are now pressuring restaurants into layoffs.
Factor in tariffs, Biden’s regulatory errors, and a huge slowdown in the number of student debt cancellations.
What will Biden or the Fed do for an encore?
Murder by Poison?
Q: Looking back to Bianco’s murder shock thesis, is it possible the economy was murdered and we don’t see it yet?
A: Yes.
A combination of Bidenomics, massive immigration and energy policy errors, coupled with Fed QE and housing errors, and you have murder by slow-acting poison instead of one big shock.
The positive shocks are over. And a rate cut by the Fed, whenever it comes (July or September) may mean nothing more than a recession has started.
Final Thoughts
- There is no magic real-time recession indicator.
- Recession? Not in 2023 Q4, but headed that way. GDI, GDPplus, and Real Final Sales are all too high to be revised away enough to indicate a recession.
- As an indicator, I put more faith in GDPplus than Sahm-based rules. But GDPplus is lagging. We do not have GDI for 2024 Q1 yet and that is the key leading input to GDPplus.
- Looking back, we were headed for recession in 2022 Q4. However, two positive shocks, tax cuts and the IRA, murdered the then-pending recession.
- Bianco has called the economy accurately so far. But murder by slow-acting poison is finally taking a huge toll.
Recession did not start in October 2023 and probably not in 2024 Q1 pending the next GDP/GDI report.
But I do expect we will be in recession this year. Bidenomics plus Fed policy errors will finally kill the patient. AI might even play a small role. Companies are getting rid of employees, turning instead to AI.
Label the recession murder by poison.
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Poison Has Taken Its Toll, We Just Await the Coroner
Bianco may be right but his “evidence” is wrong, or at best too sloppy to be relied upon by anyone serious about the question at hand.
2008 = Financial Crisis, $145 crude oil
2001 = Tech crash/9/11
1991 = Iraq invaded Kuwait (400% rise in crude)
1980 100-year high in inflation
Most of the time, a recession starts not because the economy gets “murdered”, but rather because Wile E. Coyote (or a pack of lemmings) becoming over-exuberant and running off a cliff’s edge without realizing it, and then belatedly looking down.
I agree with Mish that we’re already over the cliff. Though stagflation may be the outcome (and has been so far…) rather than a classic recession.
The EU will be forced to follow Joe Biden’s tariffs against China whether it likes it or not, otherwise Europe will alone face the concentrated trade shock from Xi Jinping’s predatory mercantilism.
It will become the primary dumping ground for China’s exorbitant overproduction of industrial goods, with a flood cars, batteries, and cleantech components together posing an existential threat to the European social market model.
Britain, too, will have to follow suit or become the market of last resort for over-indebted Chinese companies desperately seeking a foreign outlet for excess goods that they cannot sell into their own depressed economy, a fate that would annihilate the UK’s manufacturing base within a decade. We are beyond the point of theoretical discussions about the merits of free trade.
https://archive.md/YoOcN#selection-2859.0-2871.377
Wow. https://t.me/childcovidvaccineinjuriesuk/3351
If the data lead the Fed to believe a recession is imminent… not a problem…
Just accelerate the debt from 1 trillion every 100 days… to 1 trillion every 50 days
When that happens get down to the hardware store and buy some wheel barrows… cuz you’ll be needing them…
Whether someone thinks the US is in recession or not depends on their viewpoint.
If you’re the type of person who recognizes reality, works hard to improve their situation, and your wealth has been zooming upward year after year, you certainly don’t think the US is in a recession.
If you pay attention to corporate earnings, and have watched them continue to grow, you probably think the economy is doing really well.
If you are poor, unemployed, underemployed, poorly educated, unskilled, afraid to invest, follow cult conspiracy websites, typically fill your head with misinformation,
and love to bitch, whine and complain; then you probably think the US is in a recession.
I’m sure a recession will appear eventually. And when it does, I will take advantage of it and improve my situation.
While many here will simply bitch, whine and complain even louder.
Actually there are clearer definitions of recessions than merely how someone feels or their viewpoint . It is possible to be employed and doing well even in a recession or unemployed and not doing well during an economic boom.
The reason I posted CFNAI-MA3 as a really good indicator is that has been pretty spot on in data because of the sheer number of metrics and data the model takes into account.
We aren’t currently in a recession but are at stall speed based on the recent readings. The 3 month moving average will tell us every month.
My comment wasn’t about statistical definitions of recessions. It was about whether people “think” we are in a recession.
But thanks anyway.
We’re in recession now and have been for a while. We’ll be in a depression in a few years regardless of who wins the election. Depression will come faster if Biden or any Democrat wins. Everyone should be preparing now.
More like a collapse… all the stimulus is about offsetting the head winds caused by the depletion of affordable energy which kicked off at the turn of the century…
The stimulus was pushing on a string prior to covid .. and now it’s about to poison the beast and kill it.
The Beginning of the End
JUNE 13, 2003 – There is increasing evidence that massive economic stimulus — monetary, courtesy of the Federal Reserve, and fiscal, thanks to the president and supply-side minded lawmakers — is taking hold. The magnitude of the policy turnaround, which caps a constructive, multi-year reflation process, should overwhelm the economic negatives — including the drag from expensive oil and poor finances at the state- and local-government levels.
Expensive oil and its impact on other energy costs remains a concern.
The current level of U.S. monetary stimulus is massive. Real interest rates have fallen 5.2 percent from December 2000 to March 2003, reaching -1.2 percent. A swing of this magnitude may be historical.
Read more at: http://www.nationalreview.com/article/207227/reversal-fortune-david-malpass
The Feb purposely pumped up the housing market with easy money low interest rates and liar loans… cuz those help offset expensive energy costs…
When that ran into a brick wall in 2008… they did more of the same but China also began to contribute in a big way with their own housing mega bubble … which included Ghost Cities… and that is now about to implode…
Now the Fed has resorted to adding a trillion in debt every 100 days… and is running out of ammo…
This sucker is going down.
HIGH PRICED OIL DESTROYS GROWTH
According to the OECD Economics Department and the International Monetary Fund Research Department, a sustained $10 per barrel increase in oil prices from $25 to $35 would result in the OECD as a whole losing 0.4% of GDP in the first and second years of higher prices. http://www.iea.org/textbase/npsum/high_oil04sum.pdf
HOW HIGH OIL PRICES WILL PERMANENTLY CAP ECONOMIC GROWTH
For most of the last century, cheap oil powered global economic growth. But in the last decade, the price of oil production has quadrupled, and that shift will permanently shackle the growth potential of the world’s economies. http://www.bloomberg.com/news/articles/2012-09-23/how-high-oil-prices-will-permanently-cap-economic-growth
Yes. Higher oil prices will crimp economic growth. The question is “what price is too high”. The one study you mentioned is horribly out of date as it mentions an increase from $25 to $35.
Oil has rapidly escalated in price to over $100 a few times in the last two decades. Each time, the sudden rise resulted in a drop in demand and substitution. So the price dropped back below $100 every time.
Currently OPEC+ wants to keep oil between $80 and $100. If they can keep the price in that range, people will adapt and the economy will be fine. It is only after people get used to a certain price, and then it rapidly jumps, that the economy will be affected.
The ideal situation is for slow and steady moves in oil prices. But that is rarely what we get.
Incidently, a barrel of oil contains 23,000 man hours of energy. What is that worth?
Yes it’s horribly out of date… oil has rocketed much higher hitting $147 – just prior to the GFC.
The Beginning of the End…
JUNE 13, 2003 – There is increasing evidence that massive economic stimulus — monetary, courtesy of the Federal Reserve, and fiscal, thanks to the president and supply-side minded lawmakers — is taking hold. The magnitude of the policy turnaround, which caps a constructive, multi-year reflation process, should overwhelm the economic negatives — including the drag from expensive oil and poor finances at the state- and local-government levels.
Expensive oil and its impact on other energy costs remains a concern.
The current level of U.S. monetary stimulus is massive. Real interest rates have fallen 5.2 percent from December 2000 to March 2003, reaching -1.2 percent. A swing of this magnitude may be historical.
Read more at: http://www.nationalreview.com/article/207227/reversal-fortune-david-malpass
Work out the inflation adjustment then apply this 0.4% hit on GDP and without the massive stimulus that was initiated 20+ years ago … which continues to this day…
And what does GDP look like?
If the Fed and other Central Banks had not done what they have done for the past 2 decades… the global economy and civilization would have collapsed.
It is still going to collapse… because the stimulus eventually poisons the economy…
That is exactly what we are looking at right now… the financial system is dying…
recession started 1-2 quarters ago… will be reflected in numbers after the inevitable downward revisions are published.
The positive shocks are just beginning. Much of the Federal money has been approved for a long time, but is just beginning to be spent. There is a wall of federal spending headed our way.
Wall street might send SPX down 1,000 pt for Michelle.
Mike, thank you for this one. Outstanding comparison of data, analysis and conclusions.
Chicago, Chicago, Obama kind of town. If elected Michelle will rule this country for
24 years.
Just tell me whatever results you want I have supporting factors and rules.
Lots of interesting points.
I think only way to actually get inflation down without cutting rates is to regulate the derivatives markets again. This will cause commodity prices to crash and stimulate more large scale projects. There is enough money in the system already. Too much of the economy is based on unproductive growth.
In any case we are gonna need a lot of new construction in new places after this summer. These superstorms are becoming the new norm. Miami and New Orleans have a major problem along with other coastal cities. Parts pf Mexican coastlines which were habitable 10 years ago are now not. There will be mass migrations over the next few decades to higher ground.
You did a TON of work here, Mish. Thanks.
Dave Halsey, my Mentor in Measured Moves, mentioned the Sahm rule to me in a private email months ago.
In Aug, in Chicago, the Dem convention might choose Michelle. The Dem might sack Gamala/Biden. Danielle DiMartino Booth is working for FOX.
Cfnai-ma3 says no but we are at stall speed as the number is negative. We either will enter a recession or won’t.
https://www.advisorperspectives.com/dshort/updates/2024/05/23/chicago-fed-national-activity-index-cfnai-economic-growth-decreased-april-2024
Based on a bunch of anecdotal evidence I saw traveling this weekend, we will see economic activity bounce up in May and likely through the summer. Companies would have to start widespread layoffs to have a recession in my view.
widespread layoffs have been rolling for two full quarters now… and more/deeper layoffs are coming.
not sure how anyone could miss/ignore this, FFS.
Most of them are finding new jobs. This is why unemployment hasn’t risen much at all. Call me when u-3 actually gets over 6%
full-time jobs turning into part-time jobs.
salary jobs w/ benefits turning into hourly jobs… no benefits.
you are kidding yourself.
No. The part time workers will never drive the economy. The top 20% of income earners drive 80% of consumption and GDP. The bottom 80% really little overall bearing on the economy. This is why U-6 can be high but the economy can still be growing. U-3 is the real number to focus on if you are interested in recessionary numbers. As the economy keeps getting more bifurcated, it will seem like a recession for some but a boom for others But nothing will change this trend –even a new president every 4 years.
you just contradicted yourself in spades… and you don’t even realize it.
you’re done here… go get your shinebox.
We have been in a recession since 2008 (at least) … its been papered over by trillions and trillions in debt.
The loser octogenarians running S&P500 companies, Congress, the White House … these are the people who have done nothing but accrue more and more debt their entire existence. its one thing to borrow and invest in the future, but that implies borrowing once and then paying the debt back over time.
These losers have been accruing more and more and more debt, year after year after year – and most of it was spent on really dumb sh!t that will never pay for itself. Not that it matters, as these worthless deadbeats have no intention of ever repaying it anyway.
The fact that Dimartino and Bianco dont’ grasp this, and both want to argue about whether more and more debt should be labeled stagnation or recession just misses the point. They should both be ignored
This is excessively silly.
Look, doofus – here’s the reality (and you can squirm & gnash & get all hurty with the QWERTY all you like; I can take it):
This market is unbreakable. Nothing now known or unknown can stop it. I am amazed by how many still don’t realize how truly risk free this market is.
To even get QQQ to fall below 400 it would have to fall 7.5 percent? Do you really think this market will ever have that kind of pullback in our lifetime?
We’ve all known for a while that rate cuts were not happening, despite jaw boning. People actually think that the market rallies on hopes of rate cuts. It doesn’t matter if they don’t cut rates again all year or next. This market will never fall for more than a day or two. There is just way too much free money in the mix. Think about the worst hard luck slob you ever knew from ten years ago: how are they doing now? Everyone’s a winner.
The market doesn’t care about price or valuation; if it falls even 1% it deploys unlimited liquidity to buy every dip in sight.
Every dip will continue to be bought, the market will still rally and there is actually not a single thing that can stop it aside for a few days here and there, and then guess what? It will V and V again forever. All the Mag 7 will have multiple T market caps. I don’t care what happened in 2022 or in the past. This is truly a new market and if you are not buying every single dip then…???
You opened with an emotional outburst and personal attack.
You followed up by demonstrating poor reading comprehension skills. Do you know how to identify topics in a text? Mish talked about two economists (Dimartino and Biaco) and whether the US is in (or about to enter) a recession. I pointed out that the weakness in the economy has been masked by batsh!t crazy increases in debt issued by octogenarians who are too old to even discuss paying it back… so you could have argued about any of those topics.
Instead you claim that QQQ can never have a 7.5% pullback in our lifetimes… which even if true was not the topic being discussed. Do you know how to read? Can you pick out the topics actually being discussed?
You finish with the claim that “this is truly a new market…”, which is only a slight variation on “this time is different”.
You’re flailing little man. And…you know I’m right! No recession in sight; stock market never going down. Wring them hands!
Similar to what they said about the Titanic. “Unsinkable”
at least two octogenarians are embarrassed and ashamed at what their generation is leaving behind. Go f#ck your deadbeat selves, and take your debt and your so-called leadership with you
I wish I could give you 10 upvotes.
Upvote a euphemism for tongue bath? His comments is more dark & hateful than my last girlfriend who was a narcissist and an open/devout satanist
@Mish — when I click to hide the illiterate kid (EdStrong), only about half of the comments with that name get hidden. I assume it is another Marxist bot using multiple accounts / logins to manipulate the comment section.
Is there any way to block all the accounts coming from the same IP address?
You wouldn’t know a Marxist if one came up and bit you on the knee. Moreover, my big toe is more lettered than you.
There is no recession; people are doing swimmingly (and yes, miles better than you, though I know that burns), and the stock market is never ever going to crash.
Wake. Up.
…all I’m sayin’
@Mish – if you are going to allow political agitators and vandals to take over the comments section, your blog will become a dump site
little too much free time? Sheezus
He’s a vibrant specimen.
SPX is a leading indicator. [1M] SPX RSI never entered recession territory. If SPX
backup to the 4,800/4,500 area it might be a good start.
I’m with you Willie. These people destroyed America’s balance sheet to PUMP their own personal accounts. They looted their descendants future and didn’t hesitate doing so
Agree with the papering over. Many assets were never allowed to collapse but simply held by banks. Residential real estate came back but commercial real estate is still a shitshow. We need a new paradigm the next time down where the economy is productivity driven and not all commodity and asset inflation bc of the FIRE industry.
This is a really good question
Yep. It’s been in recession for months.
Years.
Centuries.
Well, except for the greatest economy in the history of the universe when lord savior DJT was president.
Given the collapse of the Roman empire I’d say millenniums.
Pointing to the sahm rule today is as laughable as the inverted curve. Everything overshot, including employment well, well, well past full employment. The only thing to glean from a sahm rule chart is reversion back to the trend from the overshoot.
Talk to me when initial claims get back to any meaningful print, say 300-350,000. Until then, 200k prints are hardly a feather blowing in the wind. Any increase from zero is stool nearly zero.
Remember, ALL of the Econ numbers are doctored.
Claims are not estimates, and figures are provided both seasonally-adjusted and non-seasonally adjusted.
Exactly. The hallmark of a recession is a sharp increase in the unemployment rate. Very difficult seeing that happening within the timescales described in this article with initial claims in the low 200s and ongoing claims flat at a low level.
DDMB is very well spoken but let’s face it, her projections have been very wrong for a long time.
unemployment is a LAGGING indicator.
take a look at the avalanche of layoffs that have accumulated since Q4’23.
U1/2 will catch up soon enough… then you’ll change your story claim you saw it coming.
Look at a graph of unemployment with recessions shaded. You’ll see that the start of recessions and the upshot in unemployment are nearly simultaneous. Here is the graph: https://fred.stlouisfed.org/series/UNRATE
…and every one of those recessions was back-dated… only declared AFTER data revisions, etc.
Yes, but that observation misses the point because the unemployment rate is not back dated and as such it is not indicating that a recession is imminent in real time. Real time claims data (which is less prone to revision) also follows the same pattern and it too is not signaling imminent recession.
As the OP says… wake me up when initial claims cross 325K… we’re not even close to that. Until then keep losing by staying out of the market.
U1/2 lag… we already established that.
is a part-time job the same as a full-time job?
is an hourly job (fractional income, no benefits) the same as a salary job?
there is a MASSIVE qualitative element to employment that you completely ignore. your choice… and exposes your incredibly shallow POV.
keep reading those charts… good luck!
You’re ignoring the fact that claims levels signal are supporting the unemployment level signal in real time which is what this post’s reply chain is about.
I’m not saying there will be no recession someday. There most definitely will be. However, those who insist that there is recession when there isn’t are just losing out on market gains.
Except for travel.
Discretionary spending seems to be collapsing.
Coffeeshops are empty.
Lots of Teslas and Mercedes at MaoMart.
I bought a short Starbucks drip in a grocery store and it was over $4.00.
Boomers are used to seeing their net worth remain stable or grow. I get the sense (they think) those days are over. Mass profit taking in equities are probably weeks or months away. Metal is the dead canary in the economic mine.
The only thing propping up the economy is housing prices and equities.
The rationale that millions of illegals will prop up the million dollar plus housing market is illogical. When there are huge interest rate spikes it becomes increasingly difficult to qualify for a mortgage. I was told by a mortgage broker that no one is qualifying.
The only logical housing market is people downsizing. Well? Who buys out the person at the top?
Nothing bad will happen until housing values plunge.
Practically every car, new or old has dents and scrapes.
The roads in many states are unbelievably horrible.
Human zombies in the cities are real.
The next crash should be called the:
“Zombie Economy”
“Bedraggled and beaten it looks for any morsel of rotten flesh to feast upon no matter how rancid, even defense stocks and foreign military aid will do.”
Discovering that Starbucks drips are something you can easily do without may not be a sign of crashing consumer spending. It could be a sign that as the young get older they are making choices as to what is good consumption and what is superfluous. Coffee houses are empty because they are no longer relevant. Housing remains high because it is still very relevant.
paying 3.50 – 4.00 for a stupid cup of coffee is absurd. This is double what it was in 2020. Just not doing it.
Point well taken!
Nomadic Tech hobo here.
The non boomer element of coffee shops departed prior to the lockdowns. Renters have increasingly eaten shit since Air BnB.
The only under 40’s in coffee shops are Hindus, white tech like me and boomers with walkers.
I drove through Seattle yesterday saw many motor homes with nice new cars parked next to them living on the streets.
Interesting times.
I investigated this?
A lot of the homeless used to live in subpar rentals with sub par rents for sub par jobs Restaurant kitchen work, occasional construction like roofing, odd jobs.
Air BnB destroyed this sustainable formula and that’s the carnage you see.
Next time you get angry about these poor souls be sure to boycott Air BnB. I could not live with myself if I created the fertile ground upon which so many fentanyl deaths grew.
Horrific
In many cases the garage or backyard units or ramshackle rentals these previously housed rented – had an empathetic landlord who was their friend and they looked after one another.
The social contract is dead.
Fastbear and Willie Nelson vying for my favorites AGAIN today.
Interesting perspective. Do you think this will change when these airbnb owner/investors who are now having a difficult time hoteling their homes (partly due to the crapification of airbnb and obscene fees) choose to sell?
My neighbor is one of those. He had a tough time renting his home, tried to sell it for 200k above market because. The house sat and sat. The greed of some of these people is breathtaking as is their unwillingness to acknowledge reality.
Newsflash to homeowners: You don’t get to dictate market price.
I must delve into this…
– Except for travel. Discretionary spending seems to be collapsing.
> “Discretionary Spending” is voluntary by definition, meaning unnecessary in many cases, as you choose to open your wallet/pocketbook for whatever it is on a whim if desired.This form of spending, ironically, increased during Covid. As “Fixed Expenses” lessened, due to the “Government Edict” for Votes was enacted. Money was actually falling out of peoples pockets, or so it seemed and felt like to many. No Rent, No College Exp., or Basically No Accountability OR Consequences for their Financial decision making, good or bad.
– Coffeeshops are empty.
> True “Discretionary Spending” Coffee Shops are Gone! So are Fast Food Places! Companies will remain alive in many cases, but not all of them, and mostly the Big Ones, but much smaller in overall quantities.
– Lots of Teslas and Mercedes at MaoMart.
> EV’s are done, for the foreseeable future. Cost, reliability, maintenance costs, battery cost and disposal, insurance, Charging issues etc. The Government jumped the shark for quick coin, but didn’t think it all the way through as usual. This is why we try to keep the Government out of Business Decisions, Ideas, Operations, Follow-up, Follow-though, Etc. And used to be the Banks, FedRes, Medical, Healthcare Etc. But those days are gone…
– Boomers are used to seeing their net worth remain stable or grow. I get the sense (they think) those days are over.
> Indeed some incredible growth has taken place, nearly everywhere you look when the Boomers were kicking butt! They know it’s over, but not for them! Many have assets like Homes, and Camps etc. Many of which are and have been payed off, so they sit (hence the desire for the Dems to have the IRS “Collect Taxes” on Unrealized Gains” ie. Unsold Homes, so yet Unrealized Gains.).
– Mass profit taking in equities are probably weeks or months away.
> Not a lot of mass profit to take, without buyers willing to pay mass Expense’s. I just don’t see that. During times like these one term comes to mind from my childhood days, and has stayed with me. “Hunker Down” and that’s what has now started, and will continue in mass. Until things level back off (IMO 10 Yrs +/- 2).
– Metal is the dead canary in the economic mine.
> Energy Is.
– The only thing propping up the economy is housing prices and equities.
> Housing Prices have fallen in most all vulnerable areas, leveled off at best in the outskirts of those areas (where many go), and stayed up or at times higher for those with Money, as Custom never stops, but nearly slows down (mostly due to workers).
– The rationale that millions of illegals will prop up the million dollar plus housing market is illogical.
> Actually read above, and the opposite should occur. They will make up for the lower profit margins due to inflation, and help keep those that can afford them happy, seeing as how they have the Money!
– When there are huge interest rate spikes it becomes increasingly difficult to qualify for a mortgage.
> Indeed! The forced scrutiny, due to massive cost increases, has made clear what any already knew or now know. High Interest Rates crush home ownership, and especially upgrades in size (hence decreasing available buyers) as a result, also crushing sales, slowing support sales and profits, and no money for mobility cost, as your stuck where your at.
– The only logical housing market is people downsizing.
> While true, but to a point. Downsizing by desire, yes indeed. Downsizing by default is not worth it, so they will squat until removed, and by force can only make matters worse for the Owner of the property in many cases today, in certain States and Cities of course,
– Well? Who buys out the person at the top?
> Others at the top. When you’re speaking of the Wealthy, there is always a buyer at the right price. Banks help make this happen, as do Laws on the books, to assist in these matters.
– Nothing bad will happen until housing values plunge.
> Bad has already taken place in many cases, just look at NYC, Chi. St. Louis, etc.
– Practically every car, new or old has dents and scrapes.
> I agree if you live, work, or drive in a city.
– The roads in many states are unbelievably horrible.
> States can’t afford the revenue for maintenance. Spent it all on the Fed wet dreams that faltered. Now the moneys gone, inflation is here, and the printing presses have been shut down (temporarily of course).
– Human zombies in the cities are real.
> Indeed, but of course not in the literal sense.
Maybe kashkari will soon call for another good, hard lockdown.
Sahm indicator reached nadir in Sept 2021 at (-)40. In Aug 2022 it was 0.13. Total : 0.53. Sahm indicator doesn’t have to reach 0.50. It has to rise by 0.50. The question is if Sahm chart is three months moving average or not. If not the (-)40 was a low to ignore. Between June 2022 and June 2023 Sahm indicator was flat at zero. We never reached 0.50. We reached 0.37 which satisfies McKelvey.
Sahm chart is monthly. The 3 months at the low [(-)23 + (-)0.40 +(-)0.30]/3 = (-)0.31. No recession
Finally a read with some meat on the bone.
At least Mish is trying to do this the right way, props to him for that. It seems like most economists these days substitute their political take on recession instead of their objective view on whether we are in one or not. That doesn’t help anyone.
You are in a recession when everybody knows it. Stealth recessions do not exist.
Stealth means Covert, or hidden, so as not to be detected. We have been in just that for about 2 years now is my best guesstimate, looking at the facts on the ground that you can see and gather up.
Job openings, % Employed, Layoffs, Bank closings, Companies true bottom line (when forced to show it), and so many more examples. The MSM stays quiet as ordered, and won’t capitulate until told to do so.
CFTC Fines J.P. Morgan Securities — a Fed Primary Dealer — $100 Million for Failing to Surveil Potential Spoofing and High Frequency Trading for Eight Years
By Pam Martens and Russ Martens: May 28, 2024 ~
https://wallstreetonparade.com/wp-content/uploads/2019/11/Jamie-Dimon-Sits-in-Front-of-Trading-Monitor-in-his-Office-Source-60-Minutes-Interview-November-10-2019-ii.jpg
Jamie Dimon, Chairman and CEO of JPMorgan Chase, Sits in Front of Trading Monitor in his Office (Source: 60 Minutes Interview, November 10, 2019)
How does a Wall Street trading firm gain competitive advantage to entice spoofers and high-frequency trading firms to use its trading platforms instead of those of its competitors? How about having its trading compliance personnel wear a blindfold as billions of trades occur over the span of 8 or 9 years?
That is essentially what three of JPMorgan Chase’s federal regulators have suggested is behind the $448 million in fines they’ve leveled against three separate units of the largest bank in the United States.
When JPMorgan Chase filed its quarterly report with the Securities and Exchange Commission on May 1, it sheepishly admitted that the $348 million it had already paid out to two of its regulators for trading violations was not the end of this saga. It said that it “expects to enter into a resolution with a third U.S. regulator that will require the Firm to, among other things, pay a civil penalty of $100 million….”
Last Thursday, ahead of a long holiday weekend, that third regulator, the Commodity Futures Trading Commission (CFTC), released its statement and imposed a fine of $200 million – which magically became $100 million by giving this five-count felon bank a $100 million credit for settling with the two other regulators. (If that makes zero sense to you, welcome to the Kafkaesque world of Wall Street and regulatory capture.)
The two federal banking regulators that imposed the earlier trading fines in March were the Office of the Comptroller of the Currency (OCC), which fined JPMorgan Chase Bank $250 million, while the Federal Reserve fined the bank holding company $98.2 million. The OCC said the misconduct occurred since at least 2019. The Federal Reserve said the bank had engaged in the misconduct over the span of nine years, from 2014 to 2023.
The CFTC took the position that the misconduct had occurred for eight years, from 2014 through 2021, and had involved “billions” of trades where a JPMorgan trading unit had failed to provide any surveillance.
The CFTC’s charges were directed at J.P. Morgan Securities LLC – a registered futures commission merchant and swap dealer with the CFTC as well as a broker-dealer registered with the Securities and Exchange Commission.
But far more problematic, J.P. Morgan Securities LLC is also one of the Federal Reserve’s “Primary Dealers,” whom the Fed relies upon to conduct its so-called “open market” operations.
The word “open” has also become one of those Kafkaesque terms when filtered through the carefully scripted reverse-speak of the Federal Reserve. J.P. Morgan Securities LLC received $2.9 trillion in secret, cumulative repo loans from the Fed in the fourth quarter of 2019 (adjusted for the term of the loan). This bailout was not revealed to the American people for two years by the Fed. When the data was finally released by the Fed, there was a total news blackout by mainstream media.
In September 2020, the U.S. Department of Justice charged JPMorgan Chase with two criminal felony counts for fraudulent activity in the precious metals market and the U.S. Treasury market. The CFTC was also involved in the settlement of those charges against the bank in 2020.
The CFTC’s Order last Thursday on its most recent charges against the bank suggests that it didn’t have the full picture from JPMorgan in 2020. The CFTC wrote:
“In September 2020, JPM entered into a settlement with the Commission to resolve allegations of spoofing, attempted manipulation of the trading of precious metals and U.S. Treasury futures contracts, and failure to supervise its trade surveillance system. In connection with that settlement, JPM represented that it was ‘[r]evising its trade . . . surveillance programs, for example JPM’s systems now surveil trades on over . . . 40 futures and options exchanges’ and that ‘JPM also continues to refine its spoofing surveillance, modifying its spoofing parameters in response to lessons learned . . . and currently uses three primary alert types within SMARTS [a third-party trade surveillance system] to detect potential spoofing and layering.’ ”
But now the CFTC learns that JPMorgan’s failure to surveil “billions” of trades continued into 2021. The CFTC writes in its release last Thursday:
“The magnitude of the gaps in JPM’s surveillance was large: On DCM-1, for example, JPM failed to ingest into its surveillance systems—and thus failed to surveil—billions of order messages from 2014 through 2021. Accordingly, JPM failed to surveil more than 99% of order messages on DCM-1 during that time period, which, according to JPM, largely consisted of sponsored access trading activity for three significant algorithmic trading firms.”
What is an “algorithmic trading firm”? It frequently means a hedge fund that uses algorithms to trade. It can also mean high frequency trading firms. This is how Senator Elizabeth Warren described high frequency trading at a Senate hearing on June 18, 2014:
“For me the term high frequency trading seems wrong. You know this isn’t trading. Traders have good days and bad days. Some days they make good trades and they make lots of money and some days they have bad trades and they lose a lot of money. But high frequency traders have only good days.
“In its recent IPO filing, the high frequency trading firm, Virtu, reported that it had been trading for 1,238 days and it had made money on 1,237 of those days…The question is that high frequency trading firms aren’t making money by taking on risks. They’re making money by charging a very small fee to investors. And the question is whether they’re charging that fee in return for providing a valuable service or they’re charging that fee by just skimming a little money off the top of every trade…
“High frequency trading reminds me a little of the scam in [the movie] ‘Office Space.’ You know, you take just a little bit of money from every trade in the hope that no one will complain. But taking a little bit of money from zillions of trades adds up to billions of dollars in profits for these high frequency traders and billions of dollars in losses for our retirement funds and our mutual funds and everybody else in the market place. It also means a tilt in the playing field for those who don’t have the information or have the access to the speed or big enough to play in this game.”
Adding to the perception that the American people are only seeing a tiny speck of sunlight into what JPMorgan Chase is paying $448 million to keep secret, is the fact that the federal agency charged with oversight of stock exchanges and securities trading – the Securities and Exchange Commission – appears to have gone missing in this matter.
The OCC – the federal regulator of federally-insured banks operating across state lines – wrote in its consent order against JPMorgan Chase’s federally-insured bank in March that: “The consequences of these deficiencies include the Bank’s failure to surveil billions of instances of trading activity on at least 30 global trading venues.”
The SEC cannot investigate trading inside a federally-insured bank. The SEC supervises securities exchanges, securities broker-dealers, investment advisors, and mutual funds. This raises the question, has JPMorgan Chase intentionally moved vast amounts of its trading inside its federally-insured bank to avoid the snooping eyes of the SEC?
That further raises the equally troubling question: do Americans want taxpayer-backstopped banks to be trading on “30 global banking venues”?
The answer is clearly “no” given that this is the same bank that gambled with depositors’ money in London in 2012, making hundreds of billions of dollars in high risk derivative trades, and losing $6.2 billion of depositors’ money according to an in-depth investigation and 300-page report from the U.S. Senate’s Permanent Subcommittee on Investigations.
Definitions…… Semantics……..
Recession…… Depression…..
Inflation causes depression. Which is widely evident.
Inflation tends to hold off recession (the devaluation of bloater equities).
Shortages and lawlessness will define any further collapse. These tend to be localized, but can spread.
Welcome to the new, improved, socialized, high tech version of medieval feudalism.
Americans prize stability and peace far more than the media portrays.
They can and will persevere in this direction regardless of the noise.
Two media personalities with opposing views competing for attention. Neither of them are paid to be accurate. Debt is not growth, and that is what these two talking heads are actually arguing about.
We all know the country is DEEEEEEP in debt, all the alleged growth of the last 15 years was funded with debt… debt these experts, political leaders and business leaders plan to stick future generations with. When, not if, foreigners stop lending these losers more, the false “growth” will be undone.
Since neither of these two talking heads knows what they are truly arguing about (debt not economic growth), and neither of them has any clue when foreign creditors will cut the US off from ever more debt … does it matter what they say?
Can you sing and play the guitar? Are you the illegitimate offspring of Willie Senior? Asking for my wife who is wondering about your relation.
The nickname is an office joke… Ten years ago give or take, I narrowly missed being hit by Willie Nelson’s tour bus. I think it was the bus carrying his backup singers or backup musicians, but not really sure. They were exiting the concert venue and it was definitely his entourage, but I don’t think he was on said bus. It was a very close call, but I wasn’t hit. I don’t think I can even name one of his songs.
Even if I was the singer… would that influence your opinion of Dimartino or Bianco?
OK. The link is accidental and not philosophical. Did almost getting hit by a bus change your view on life?
My office mates have a macabre sense of humor. Its been years and I had forgotten the root story behind the nickname
You should break them of that habit because that nickname is a joke.
Leave the gun, take the canoli.
Mine was when I was twenty years old. After I was never afraid of death.
Being narrowly missed by a bunch of high hippies on a tour bus doesn’t count as a near death experience in my book.
Do not confuse your office mates with your friends
It wasn’t a bus. It was something unique.
That a recession could already be underway (or even imminent) with the Federal Government already doing $1.6 TRILLION in annual deficit spending is a scary thought indeed.
And the murder weapon is…
Interest Rates
Rates spiked prior to all six instances that Bianco pointed out. Not just the level of rates but rates relative to the market, which are currently at an ATH. Much higher than each of the Bianco 6 recessions.
Ask any small business owner, whose enterprises constitute roughly half of all US employees; we are in a recession now. But there has been an interesting dichotomy in perception due to the strong equity market, driven almost wholly by AI, which is perhaps masking recession psychology.
The Wealth Effect strikes again. Paper gains in equities or gold or 401ks or homes or AI all give the illusion of being wealthy and one can spend to your heart’s desire……
Every position liquidated, is also a position bought. No new spending money is created by this transaction The exception would Real Estate loans in a rising market which create money out of thin air. I would imagine Real Estate is neutral to negative in money creation in this flat to negative market, and is offset by high mortgage payments being removed from circulation. Credit Card pumps to the economy are probably giving a temporary boost to the economy, but are not sustainable as available credit is exhausted. Massive amounts of illegals teeming on the Mexican border is also increasing unsustainable demand in our economy.
Is AI bread and circuses for the moneyed class? What would ChatGPT say about that?
Long long ago I took a cab driving job for three months. Since tips are a good part of your pay, you learn to observe the client and figure out what political party he was in or even better, figure out his pet peeves. Then you cater to his beliefs and reinforce his opinions. If you do it well your tip is very generous. Also driving a cab is boring so it becomes a game. You unravel what the client wants and give it to him and the money rolls in. “Ask any business owner” reminds me a bit of that.
Bartender tips work the same way.
US recession lives in China. Uncle Xi is giving free goods to America: TVs, computers, clothes, cars… He needs the factories working. He doesn’t know what to do with so many green papers. Now China is buying gold, losing T-bills yields. The chinese workers are poorer every month.
“Murder by Poison” will be accurate forensics but only secondary. “Murder by Karma” will be listed as the primary cause of death of the economy.
American labor is reverting to the standard of living they enjoyed before post WWII America held a monopoly on manufacturing. Labor extorted wages beyond its value. Before WWII Americans lived in clapboard and tar paper shacks. Housing regulations prevent those options so sidewalk pup tents and mobile homes are the new standard living arrangement. High value technical skills are doing fine. Unskilled labor is reverting to the world mean standard of living.
Until the criminal enablers at the FED admit the wealth effect on “the economy”, none of this matters.
There will never be another natural recession as long as the FED and Congress spend enough and inject enough and buy enough (FED plunge protection team in Chicago and their illegal balance sheet) to keep pumping paper assets higher to give people the illusion of wealth and keep them spending and ACCEPTING that Congress can keep spending like they have endless wealth too. It’s all a fraud.
If the FED and FED Govt didn’t spend $13T during the scamdemic, the US would have been in a natural recession soon after the spring of 2020
If the FED and FED Govt didn’t spend an extra $5T the last 2+ years, the US would have been in a natural recession.
The Great Rinse and Cleanse is only building up size and momentum by artificially and intentionally trying to cover it up and kick it down the road for just ONE MORE DAY. The infestation and disease is growing
The end is nigh
Buckle up because THEY HATE YOU and they will never bail you out when it finally explodes. Maybe somebody will go to jail or the gallows this next time……
Hank, they hate me but you love me? If you hate me as they hate me then you are no different from those who hate me but if you hate me you would not be warning me that there are those who hate me so the conclusion is that you love me and are warning me from the goodness of your heart, unless it is just a ploy to get attention. In that case they might not hate me but you do. This is confusing Hank. Are you for me or against me?
Dougie you are the best and I am for you!!!! The cabbie story was legit 👌
Anyone who runs around saying “The End Is Nigh!!” Is either Short the market and talking their Book…
Or they’ve lost their tinfoil hat and need a good therapy session or A Hug.
I’m all of the above plus reading a lot of old English books and the King James Bible
Interesting view points but I’m in the camp that we won’t have a recession until the unemployment pops and that will be very hard to accomplish with so many people retiring year over year and low birth rates. The only thing I know that can change that is if Biden suddenly authorizes work permits to all those immigrants sitting idle.
TSA had record breaking travelers this past memorial day weekend. My wife drove us, in her car, to a beach resort this past weekend. It was packed. Restaurants were packed (45m wait for breakfast), bars were packed, traffic was bad although not horrible which was the only strange thing about the weekend.
There is also an ever growing flow of cash going to retirees collecting social security to the tune of $120 billion per month and growing. Oil companies are lucky to make $6b profit per quarter to give you a scale of the SS money flow.
There is just too much money and credit in the system, until that slows I don’t see a recession.
Our potential population reduction reminds me of the Black Plague in that paradoxically, it increased wages for the lower classes and crushed that of the upper. Perhaps we could see the same effect as labor being rare has much more bargaining power than before. The pie gets smaller because the economy is smaller but the partition of wealth changes. It also has the advantage or upending existing social structures allowing more dynamic groups to come to prominence.
I predict plumbers, electricians, and carpenters will be the new “doctors & lawyers and IT pros” by 2030. In Wisconsin, there’s a new Microsoft data center mega project, I heard they need 800 electricians to wire it all and they can’t find them.
And with the non-existent climate change, trades people & electricians will be needed for all the destruction to infrastructure. Just look at what happened in Houston a couple of weekends ago.
https://www.texastribune.org/2024/05/17/texas-storm-photos-damage-power-outages/
And this wasn’t even a hurricane, just a storm.
Advise your daughter to drop the lawyer and marry the plumber.
Texas got Californicated
those people ran their state into the ground, then they move and destroy the next state without ever asking themselves who voted to destroy CA in the first place?
Isn’t immigration (more workers, more demand, etc) an ongoing positive shock? I’d think that’s one of the big reasons we didn’t (yet) enter recession territory.
2020 = COVID
2008 = Financial Crisis, $145 crude oil
2001 = Tech crash/9/11
1991 = Iraq invaded Kuwait (400% rise in crude)
1982 = 200-year high in interest rates
1980 100-year high in inflation
1974 = Arab Oil Embargo
Allow me to say, 2008 wasn’t an recession, it was a complete meltdown of the system.
We live in the aftershock of that supernova.
Proof: When the SVB, an unknown entity, started to keel off, the whole system went berserk, printing an additional 200B on top of trillions.
The pre-2008 system is dead.
1991 crude rose and then fell rapidly. It was a flash in the pan (great metaphor-look it up).It was nothing like the oil price rises in the 1970’s.
Stop the nonsense. 2008 was a result of 2003 – 2007 and the ridiculous amount of speculation on Real Estate and WAY too much Construction based on that Speculation. (Pre-Construction Condos & Houses anyone??)
While there’s plenty of opportunity for local issues in overpriced houses and condos…there is NOT enough construction and Pre-Construction Speculation. Commercial
Office RE is an issue…but it’s not kicking anyone out of their Houses…which caused massive harm to many individual consumers.
More and more people in the country EVERY Year…less construction of housing…equals less affordable housing…equals people holding their homes longer…equals more pay down on mortgages and less hopping to higher priced houses.
Plenty of ways to mess that up…but probably not soon.
Leading economic indicators say we are in a slow down at least, but heading back up as of the latest reading.
Since GDP does not measure what it pretends to but rather spending it’s almost certain that the us economy never really came out of the covid recession. GDP numbers have been driven by debt based transfer payments.
Only countries like Venezuela or Cuba really believe that an economy can exist without production.
Strip non productive debt out of GDP and there was no growth last year
Sell the first rate cut. Because by then, rigor mortis is setting in. Until then, greater fools, weekend at Bernie’s etc.