June 9, 2009

See it now?



Remember, unemployment is a lagging indicator.

The Great Recession ended in April.

So, the question you should be asking isn't "is the Great Recession over?" Some questions you should be asking are:

1) What happens when the sugar high wears off?
2) What happens when foreigners don't buy our debt?
3) Will consumers spend again? With what? Stock market gains perhaps?
4) If the stock market goes up 100% and the US dollar falls 50% will people feel better off?
5) Is working at Wal-Mart the new American Dream?
6) What's the true unemployment number?
7) When will home prices stop falling?
8) Will we simply inflate away all debts?
9) Will all those Alt-A's and Option ARM's that haven't defaulted simply refi?
10) Was Bernanke's 'helicopter speech' the most important speech of the 2000's?




37 comments:

upthecreek said...

Don't Worrie Keith....Obama will FIX it all..NOT..

And YES

The recesssion is over.. the depression has started.

Anonymous said...

Keith your charts prove nothing.

The unemployment RATE is going to rise much higher while the recession continues. The rate can/will continue to rise while the monthly losses decrease.

Expect nearly 12% unemployed in 2010.

trPM

keith said...

trpm - I actually see unemployment peaking around 13% or so

And your point is?

W.C. Varones said...

Keith,

We agree on all of this.

So why are you still cheerleading the bailout and deficit king Obama?

Anonymous said...

How come no stream regarding the lefty politicos in Eurpoe getting tossed out of office en mass.

Anonymous said...

The point is- The unemployment rate chart shows that recessions end at or just before peak unemployment.

IMO we are no where near peak unemployment.

Anyhoo, what's this current recovery going to look like?(you say it's underway, but I don't see it)

What sectors will lead?

Where's the growing demand?

Demand for what?

Will American consumers start borrowing again?

trPM

Anonymous said...

think 9.4% is bad? it would have been a lot worse if it wasn't for obama saving and creating jobs.

BO has estimated that he save ~150,000 jobs last month alone!

Tyrone said...

Keith,
Go read Denninger today. He's going off the deep end, perhaps with good reason...

How Much BS Can You Take?

Ten Things You Must Do
- Stop listening to those who claim that "The Market is telling you the recession is ending/over
- Acquire lawful means of self-defense
- If you have assets in the stock market, and have thus enjoyed the rally off SPX 666, either sell or hedge that exposure RIGHT NOW
...

eric in vegas said...

Hope all those unemployed FIRE industry workers like working in the sun with shovels.

Keith, the sad thing is we may peak around there because of technicalities like people no longer collecting UE benefits and not because they've found employment.

keith said...

One take-away from the top graph is how sharp the rises in unemployment are heading into a recession.

You're going along, everything's fine and then BAM, employers throw everyone overboard.

That's why I hate companies. Better off working for yourself.

keith said...

Nobel Laureate Krugman Says Recession May End ‘This Summer’

“I would not be surprised if the official end of the U.S. recession ends up being, in retrospect, dated sometime this summer,” he said in a lecture today at the London School of Economics. “Things seem to be getting worse more slowly. There’s some reason to think that we’re stabilizing.”
...
Even with a recovery, “almost surely unemployment will keep rising for a long time and there’s a lot of reason to think that the world economy is going to stay depressed for an extended period,” Krugman said.

http://www.calculatedriskblog.com/

Anonymous said...

OK Keith. You're right as usual. Recession is over. Everything is fine and dandy again. Good times all over. Those waves of foreclosures will be washed away by a tsunami of Obama money. America will reclaim it's leadership role in the global economy with it's cutting edge developments in the fields of Starbucks coffee, nail and tanning salons, reality TV, fast food and financial innovations.

Anonymous said...

Oh yes, the title of "Nooobel Laaawreeate" sounds soooo prestigious and grand. He must know what he is talking about.

KD is calling BS on PK right here:

Denninger Challenges Krugman to a Bet.

Recession over my ass.

-Gonzo

keith said...

I'm surprised I have any readers left, since most of you disagree with this call.

You must like the debate. That's good. Because perma-bulls and perma-bears are f*cked.



People Choose News That Fits Their Views

News readers gorge on media messages that fit their pre-existing views, rather than graze on a wider range of perspectives. In other words, they consume what they agree with, researchers say.

The finding comes out of a recent study which tracked how college students spent their time reading media articles on hot-button issues such as abortion or gun ownership.

Unsurprisingly, students gravitated toward articles that supported their views.

"The idea has been around for a very long time, but it has just never been proven," said Silvia Knobloch-Westerwick, a communications researcher at Ohio State University. "It's just considered textbook knowledge or lay common sense."

That preference for similar views may also influence hardcore political junkies who prefer to read blogs with strong political views, according to separate research.

http://news.yahoo.com/s/livescience/peoplechoosenewsthatfitstheirviews

Anonymous said...

People Choose News That Fits Their Views.

Is that supposed to be some kind of paradigm shifting revelation??

Andrew from Russia said...


1) What happens when the sugar high wears off?


Captain Obvious will come in and lecture everyone about hangover.


2) What happens when foreigners don't buy our debt?


My bet is that, with the right taxation framework, the domestic savers (ex-consumers with negative saving rates as of 2006) will gobble it up. "Savings bonds", yum! The sales pitch: "Not as risky as those stocks (do you remember losing your pants on the fake "Green Shoots" rally?), tax-free, and even earning a stable 0.25% to 2.5% return! ORDER NOW!"


3) Will consumers spend again? With what? Stock market gains perhaps?


It is safe to assume they won't.


4) If the stock market goes up 100% and the US dollar falls 50% will people feel better off?


Depends on how the 50% fall (with respect to what? CPI going up 100%? Dollar index going down to 40?) is accomplished.


5) Is working at Wal-Mart the new American Dream?


Working anywhere full-time may certainly be!


6) What's the true unemployment number?


Just like CPI, the official number looks honest enough. Throwing certain categories of underemployed overboard is the way to account for the peculiarities of the post-industrial age. Hint: I'm not a full-time employee either. And even if I'm dreaming of a $100K/yr. full-time sinecure, the gov't is not obliged to "create" one for me.


7) When will home prices stop falling?


Never! :)
Sure, some day there might be an intermediate bottom but I doubt that RE "investment" game will return in a full glory. The demographics are no longer there. Almost every potent piece of regulation to distort the market has already been written. The outlook appears dull.


8) Will we simply inflate away all debts?


Not before the rest of the world suffers through the pain of repaying/restructuring their dollar-denominated debts (these DO exist, to much surprise of the dollar morticians).


9) Will all those Alt-A's and Option ARM's that haven't defaulted simply refi?


Maybe the bureaucrats will devise some brain-dead solution. What will that change?


10) Was Bernanke's 'helicopter speech' the most important speech of the 2000's?


That, plus some neoliberal "growth" babble. Printing is one thing, spreading around in the most destructive way is other. I nominate Goldman Sachs' "Dreaming with BRICs" for the "most important research paper of 2000s" category.

les said...

Keith,

Great Recession ended in April?

Are you saying that the economy grew in May?

keith said...

Yes, I'm saying US GDP will see a positive recording in Q2 vs Q1

Remember, the economy had fallen off a cliff, so beating the Armageddon Q1 numbers when production had shut down ain't gonna be too tough.

Recession
Definition
A period of general economic decline; specifically, a decline in GDP for two or more consecutive quarters.

les said...

It's wonderful how the govt pulled Wall St out of the gutter and the Fed shoved $8 trillion dollars into their pockets. Just because they almost destroyed the economy doesn't mean that they should suffer too.

Wall St. will make big profits and "technically" pull the US out of recession. Woohoo.

Duarte said...

If that is your definition of recession, let alone depression, you realize that you are disagreeing with the historical end of the great depression being in the early to mid forties. Right? No wonder you quote Paul Krugman.

I, personally, am done arguing this point. The measurements of GDP are going to be falsely skewed by apparently 'resillient' dollars. I think my attention is going to turn toward The Campaign for Liberty. Schiff was right. Keep measuring the GDP in dollars as they fall like stones in the pond. The GREAT Depression. HA! Those lucky bastards.

wallstreetvet said...

Keith, I agree, technical recession end. Housing will remain in a slump as there is no leverage, just like hedge funds cannot get going as no money.

Make sure readers understand with inflation not everything goes up.

Things we buy will go up, things we own will go down.

Nobody cares about the price of $USD as pensions, 401k, corporate executives, hedge funds, mutual funds, are all tied to the stock market. So reflate.

Anonymous said...

Unemployment is at 20.2% right now....it will go to 25-30% by next year. It hath been foretold. Things will degenerate far faster than you think keith.

Miss Goldbug said...

We are no where near a bottom in unemployment or housing prices.

When a receptionist job opening at my work receives 1000 resumes in one week, we are not at the bottom.

I agree with another poster that the recession is over and the GD2 has begun.

JaneZ said...

5) Is working at Wal-Mart the new American Dream?

LOL

Wal-Mart to Start Outsourcing More to India

The U.S. retailer is considering TCS, Wipro and Infosys for $500 million outsourcing deal

http://tinyurl.com/l4wzvz

Anonymous said...

"keith said...
Recession
Definition
A period of general economic decline; specifically, a decline in GDP for two or more consecutive quarters."

Denial. A river in Egypt.

Recession Over, Greatest Depression Begun.

Semantics, semantics, semantics.

Go long on Smith & Wesson...

Anonymous said...

The downward plunge will stop, thanks to the money bomb. We will bounce in and out of negative growth for a while, but there will be no recovery. Soon enough, the long slow grind downward will start, and no one can picture what the bottom looks like.

Nothing that Bernanke or Geither have done so far has caused high inflation, much less hyperinflation. To get either, their foolishness will need to continue a lot longer or become more extreme. Will that happen? Hard to say - there are a lot of competing forces pushing both ways. Trying to call inflation/deflation is tantamount to predicting how the back room maneuvering will play out, which is like predicting the weather six months in advance. No one can do it, not Keith, not Mish, not Schiff. You are a fool if you place heavy bets on either outcome.

Anonymous said...

The 1980 point on the chart may be where we are. Unemployment temporarily peaks as we get a short lived recovery, then more bad news starts kicking in by late 2010 (like the day after the mid terms). Then unemployment shoots the moon. That's one theory.

Joe said...

Keith you are way off base on this one. We have excesses to get rid of from the previous Bull market that began in 1980. The banks are insolvent and have written off nothing.

There has been no change, we hit ice and the Titanic is taking on water and Obama has done nothing but pour gasoline on the deck instead of trying to repair the hole in the side.

Somewhere this summer, maybe within 1 month we will start to see the reality of the situation.

"Hell is truth seen too late" … Hobbes

Joe M.

Anonymous said...

Keith that chart is upside down. Right? You are saying its good news so its upside down?

GT Charlie

True Amer ICAN said...

Blogger JaneZ said...

5) Is working at Wal-Mart the new American Dream?

LOL

Wal-Mart to Start Outsourcing More to India

The U.S. retailer is considering TCS, Wipro and Infosys for $500 million outsourcing deal

http://tinyurl.com/l4wzvz

June 9, 2009 2:59 PM


I am pissed. Why can't the government tell American companies to stop outsourcing good high paying American jobs? I had an IT job in the banking industry. Then I got laid off (they outsourced my job to India) in 2001 and I never was able to make the same salary again. This is so unfair. We and the government needs to do something.

gutless and lazy said...

Irrelevant. Academic. Esp with the trillion dollar, debt based, sugar high. A temporary (very short term) bump.

Here's what matters!
USA household wealth continues to decline:

Perm. job losses continuing due to globalization/outsourcing/offshoring; Foreclosures rising; House prices continuing to fall; Wages shrinking; Personal debt rising; Public debt rising; And now pile on top of that, large scale inflation in the pipeline and a declining currency.
THAT'S WHAT MATTERS!

Smart money is taking the slighly longer term perspective and is unloading U.S. dollar based equities during this bump.

The next downturn will be relatively soon, steep and brutal, all while the USA gov't will be fresh out of ammo, and any credibility whatsoever.

Angry Leprechaun said...

"News readers gorge on media messages that fit their pre-existing views, rather than graze on a wider range of perspectives. In other words, they consume what they agree with, researchers say."

Funny you mention this, because if Obama wasn't in office and it was still Bush, you would be going ape shit right now saying that all these graphs are lies.


"Recession Definition
A period of general economic decline; specifically, a decline in GDP for two or more consecutive quarters."

We brought this up a year ago, and you said this defenition fooey, we are in recession. Hypocrite!

Keith I come to this site still for one reason. In the midst of going from fiscaly conservative to completely fiscaly idiotic, you now have a wide range of veiws from both sides of the fence. It is a good place to debate. I don't think this was your original intentions, but since you drank the koolaid this is what has happened. I don't think you realize how much you have jumped ship Keith, it is sooooooo obvious.

Anonymous said...

.


How's that Hope and Change workin out for ya?



.

patrat said...

11. What happens when wages go down? (See multiple articles this month throughout the national media.)

MollyMacquire said...

"I am pissed. Why can't the government tell American companies to stop outsourcing good high paying American jobs? I had an IT job in the banking industry. Then I got laid off (they outsourced my job to India) in 2001 and I never was able to make the same salary again. This is so unfair. We and the government needs to do something."

Why don't you start posting over at CafeHayek, a website operated by a tenured state university professor. His regular posters --generally other tenured US professors-giggle girlishly in delight at the loss of American jobs and at the wonderful, mystical workings of the free market system. While thanks to tenure, these professors themselves are not subject to free market forces, they expect and demand that everyone else be fully subject to these free market forces, including the poor, the disabled, and the elderly. The loss of the American standard of living is all shit and giggles for these pasty-faced, coffee-breathed American academics. According to one of the commentators on that website, unemployed Americans should just mass migrate and settle where the jobs are, in Mexico, India and China. One commentator even speculated that it couldn't be too hard to permanently migrate to a new country, with a different language and culture, uprooting your entire family in the process. After all, all the migrants which he ever saw in the USA seemed sooo happy.

If you really want laughs, go to the archives to CafeHayek and check out where the professors desperately try to justify state-bestowed tenure as being fully compatible with the free market...

Anonymous said...

unemployment is twice that of 1982 if calculated by the same methodology as the 1982 number.

i've had it said...

Keith, you have disregarded many posts recently regarding the methodology behind the UE rate. Also, not all recessions are the same so comparisons of this one to prior ones may not be a good idea. Finally, the only way you can go from negative 6% GDP in one quarter to positive GDP in the next one is by rigging the numbers, which I don't put past the DC grifters and Wall Street banksters.