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Nofsdad
Joined: 06 Jul 2003
Posts: 6727
Location: Central CA
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Posted: Sat Aug 09, 2008 3:37 pm Post subject: This Recession Will Be Neither Short Nor Shallow
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Implications Of An Overleveraged Consumer
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For an economy overleveraged on consumer spending the chart could hardly look worse. Yet, it is going to get worse, lots worse. Hiring has stalled, commercial real estate is hitting the skids, vacancy rates at malls are rising, lease rates are dropping. In short, the Shopping Center Economic Model Is History.
The reported unemployment rates is 5.7% and rising rapidly. It takes somewhere between +100K and +150K jobs a month to keep up with the birthrate and immigration. Yet, Jobs Have Declined 7 Consecutive Months.
It will be interesting to see what the above chart looks like and what the economy looks like when the unemployment rate hits 6.5% or 7% sometime next year. |
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In my opinion, the past 7 years have been among the most fiscally reckless ever in the entire history of the world. The hangover is going to be long and deep. I am sticking with my Case for an "L" Shaped Recession.
Ironically, clowns on CNBC are debating every day whether or not a recession has even started. The only way a recession hasn't started is by using a definition of 2 consecutive quarters of declining GDP. That definition is widely used but it simply is not how recession calls are made.
What actually happens is the National Bureau of Economic Research [NBER] decides recessions using a wide range of data, not just quarter to quarter GDP.
The Library of economics has a discussion of the above as well as data on the average length of a recession. From 1920 to 1938 the average length was 20 months. The average length of a recession from 1948-1991 was 11 months. The longest was the great depression that lasted 43 months.
Given that this was the greatest global fiscal party ever, the likelihood that this will be one of the greatest hangovers on record is very high. In other words, this recession will neither be short nor shallow.
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It's Time To Think
* Think foreclosures have topped? Think again.
* Think housing has bottomed? Think again.
* Think CEOs are being honest about forward guidance? Think again.
* Think corporate earnings are going to improve? Think again.
* Think the parade of bottom callers is correct? Think again.
The big irony in all of this is bottom callers are calling the end to a recession they claim has not even started. The truth of the matter is there is no reason whatsoever to think that the economy is remotely close to turning up. The teeth of this recession have barely begun to bite. |
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dictators_rule
Joined: 08 Jul 2003
Posts: 4780
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Posted: Thu Aug 14, 2008 3:50 am Post subject: inflated artificial
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That's a duh.And that's what you get with an artificially inflated economy with stuff like loose credit,weak immigration laws and US Corporation OUTsourcing.
In some respects were just seeing the true colors of the US economy,alot of old problems like immigration and outsourcing or exporting of manufacturing overseas is beating us down.Throw in some 1970s style oil dependence and of course you have a crab economy.
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FLlifer
Joined: 16 Feb 2005
Posts: 102
Location: FL Florida
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Posted: Thu Aug 14, 2008 4:10 pm Post subject:
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95% of the American people have no idea whats about to happen with reguards to our economy. Most are so in debit that they only have time to worry about their own mountain of bills. Our country is over 9 TRILLION dollars in debit without medicare and social security. Some say above 50 TRILLION if you include those. Instead of congress balancing the budget, they have given away the power of controling our money supply to the FED. Who by the way are not part of the Federal Government, but controled by big banks. Outsourcing has gutted the American economy of good paying manufacturing jobs, so service jobs are most of what we have left. What happens when the consumer stops buying. No more flipping that house, or heloc's to support your buying habit. I say get ready for GD number 2. Shame on the boomer generation. What have we tought our kids.
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