It's just common sense, really. And, frankly, you don't need a keen set of observational skills to understand why it's so, but the truth is: "
The Next Wave Of The Financial Crisis Is Coming." Even folks considered to be level-headed proponents of Wall Street
on the right are predicting a double-dip recession, with the second leg being worse than the first.
The next wave of the financial crisis is not "probably" coming.
It's not that it "may" come.
It's already here.
When the outspoken head of the Congressional Oversight Panel, Elizabeth Warren, tells us there's going to be hell to pay, maybe it's time to listen? (See: "
Congressional Oversight Panel - August 11 Report - The Continued Risk of Troubled Assets.")
We're talking about objective factual reality. And, if you think our government is going to give us reliable statistics about what's happening, you might want to hear what Barry Ritholtz just said yesterday, when he opened up a can of his whoop-ass...
Here's Barry Ritholtz telling us that the last place we should be looking for objective statistical analysis is within our own government: "Defining Recessions; Mis-defining NBER."
(NOTE: The "NBER" is the National Bureau of Economic Research.)
Defining Recessions; Mis-defining NBER
By Barry Ritholtz - August 13th, 2009, 4:58PM
Here's another of those articles that look so embarrassing one year later:
Can you imagine an article that insinuates that the government, not an independent academic commission, was the more objective arbiter of data? That argued we should let the pols decide when recessions start and end?
Insane, right?
Ritholtz says, "Let's go to our WTF were you thinking file:"
"But what exactly is a recession? The popular definition is two consecutive quarters of economic contraction. But NBER provides a little more room for judgment with its definition of "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real gross domestic product, real income, employment, industrial production, and wholesale-retail sales." Justice Potter Stewart might have had more succinct wording than NBER: "I know it when I see it."
Why not let the federal government be the arbiter of when we are in a recession? After all, the federal government collects and disseminates economic data, and by all accounts quite credibly.
And, then Ritholtz closes out with...
WTF planet do you live on buddy? I would bet that the majority of savvy knowledgable watchers of markets and economic releases would laugh their arses off at the phrase: "by all accounts quite credibly."
I am not sure what the author was trying to prove, but pretty much everything in this article is shite . . .
Yes. This isn't rocket science. And, if you've been paying attention, in between the lines of even those calling for an imminent recovery, the truth is that even these folks--for the most part anyway--don't offer up much, in terms of explaining exactly what will lift us up from the current lows that we're witnessing now. What we're hearing and reading--which in many cases is incorrect (more about that, below), I might add--is that things have stabilized. Another way of describing it is that things have "reached a bottom." But, when it comes to the price of housing (not the sale of homes by investors or buyers that are actually driving the price of property even lower) or rising unemployment, or consumers spending their way back into national prosperity, or positive jobs creation, that's nowhere near happening now; and it's not expected to happen over the next few months, either. (It's a matter of common knowledge that the Spring and Summer are the heavy buying times of the year when it comes to residential real estate, good economy or bad.) But, these same people that tell us a recovery's in sight, aren't exactly sure what it is that's going to lift us up from these economic depths. All they seem to think they know, which is not fact-based by any stretch of the imagination, I might add, is to state: "It looks like we've reached a bottom."
Here's a headline sampling from the past 48 hours:
"Home Price Declines Accelerate in Second Quarter."
"U.S. Initial Jobless Claims Rose to 558,000 Last Week."
"US Consumer Credit Shows Steepest Contraction in Over 5 Decades."
"Report: Record Foreclosure Activity in July."
"Retail Sales Decline Slightly in July."
Hell, even Paul Krugman, whose comments were, to a great extent, taken out of context on these pages earlier this week, actually said:
"Great Depression 2.0 avoided but recovery slow: Krugman"
Agence France Press
Kuala Lumpur: The world has avoided a "Great Depression 2.0" but it will take at least two years for the global economy to make a full recovery, Nobel prize-winning economist Paul Krugman said on Monday.
Krugman said in a speech to an international business forum here that although the worst of the financial crisis was over, the world now faces a prolonged slowdown like Japan's "lost decade" of the 1990s.
"How do we get out? I think the technical answer is -- God knows. We have a great shortage of role models," said Krugman, a professor of economics at Princeton University in the United States.
Krugman said that in the past, swift economic recoveries saw affected countries export their way out of trouble, trading with countries with large surpluses.
"Unless we can find another planet to export to, we cannot have an export-led recovery from this global financial crisis, which means we have a serious difficulty," he said.
Other possible solutions -- consumer spending, business investment and housing booms are all unlikely to kick-start the US or world economy this time.
"We seem to have avoided the Great Depression 2.0," Krugman said, but added: "I do believe that full recovery is at least two years and probably more than that off."
Bold type is diarist's emphasis.
Many others--and many other recent facts--are telling us we have not reached a bottom. They say we have lower yet to go as far as unemployment, housing prices, foreclosures, and current homeowners being "under water," as well as the tanking of commercial real estate values, are concerned; and the most recent numbers appear to be bearing them out.
Larry Summers was quoted on Bloomberg TV, late yesterday, as saying, "We're seeing a return to normality."
Hmmm..."normality." Oh, I guess that would be a return to our bubble economy, right? And, the bubble-du-jour? Well it's been staring us in the face for many months, now, "Stocks: The latest Fed bubble."
Stocks: The latest Fed bubble
By Colin Barr, senior writer
Last Updated: August 12, 2009: 3:52 AM ET
Are the government programs supporting the financial sector reinflating global stock markets even as economies stumble?
NEW YORK (Fortune) -- The Federal Reserve has spent the past year cleaning up after a housing bubble it helped create. But along the way it may have pumped up another bubble, this time in stocks.
To head off the worst downturn since the Great Depression, the central bank has slashed interest rates while funneling money to banks.
--SNIP--
At the same time, stocks have bounced back with startling speed. Since global markets hit their bottom in March, the S&P 500 has jumped 51% -- even as the outlook for economic recovery remains dim.
"This is the most speculative momentum-driven equity market since the early 1930s," Gluskin Sheff economist David Rosenberg wrote in a note to clients Monday.
--SNIP--
But while most people take the rise in stocks as a hopeful sign for the economy, some see evidence that the Fed has been financing a speculative mania that could end in another damaging rout.
Recent weeks have brought huge rallies in some of the lowest-quality stocks -- including firms such as AIG (AIG, Fortune 500), Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) that are being propped up by the government and are unlikely to return to health any time soon.
--SNIP--
That's good, except when the outlook for economic growth doesn't seem to support the higher stock values.
--SNIP--
Rosenberg, who notes that consumer credit has dropped an unprecedented five straight months, said it's far from clear the recession is over. He says the risk of a market relapse later this year is high...
As that conservative bastion, Barron's, is telling us just over the past couple of days, "No 'Mission Accomplished' for the Fed." Yes, this is Barron's saying we're nowhere near "there" yet, while some, even on this blog, say it's right in front of us.
It's not. There is much more pain to come.
The writing's more than just on the wall; and IMHO, it's time we dealt with things as they are--as we approach the midterms--rather than how we "wish" them to be. Wishful thinking does not drive votes when people are voting their pocketbooks. Especially when they're misdirecting blame towards the new party in power, and failing to acknowledge it was two terms of a whacked-out, laissez-faire, GOP administration that brought us to where we are today...and that's cleaning up this historical mess. And, folks do vote their pocketbooks, as even a Poli Sci 101 student will tell you.
Trust me on this one; if these rightwing twisted minds could make almost enough people (who, thanks to the vote-counters in Florida "somehow" morphed into enough people in 2000) believe that Swiftboat crap in Ohio in 2004, they sure as hell can mount a propaganda campaign directed towards a large segment of our population that doesn't even remember what they had for dinner last night...let alone who was responsible for driving our economy into a ditch between 2001 and 2008.
The answer here is obvious: and that's to beat our attention-deficit-disorderly public over their heads with historic fact. Early and often...over and over again...before it's too late...