We have to laugh when we read about the double dip recession. From our point of view, it’s like worrying about the chicken in the oven when your house is on fire.
The collapse in manufacturing and regional Fed indices over the last two months has been stunning, but generally unreported. The last time we saw an economic contraction of this scale was in February of 2008, two months into the worst recession since the Great Depression.
As ZeroHedge said, “We are confident that once the groupthink wraps its head around the fact that the auto production based renaissance is not coming, and the economy officially tumbles into the commode of Ben Bernanke’s fiat dungeon, the NBER will determine (with an appropriate 12-18 month delay), that the current recession started in April of 2011.”
As EconomicCollapse.net said, “The chicken is turning a delightful golden brown. Would you firemen like to join us for dinner?”
David Rosenberg bears the lofty title of Chief Economist at Gluskin Sheff & Associates.
It’s not difficult to figure out that those of us at EconomicCollapse.net put very little faith in the words of most economists. They’re like members of a barbershop quartet – one may be a baritone, another may be a tenor and a third may sing bass, but they all sing the same song.
The economists who catch our attention are the ones who aren’t afraid to go against the mainstream – the ones who speak truth to power and take positions that aren’t endorsed by the criminals in Washington, DC.
David Rosenberg, for example, expressed his heresy in an interview with Mike Shedlock at Bloomberg.com. We’re guessing that he won’t be invited to dinner with Timothy Geithner anytime soon.
We saw a poll the other day that said an increasing number of Americans think the economy will never recover. Not that it will take longer to recover than they expected. Never.
Of course, you can put a check mark next to our names on that list. Sure, there may be a tick upward and maybe even what appears to be a recovery, but we see nothing but a long term debt bomb that’s strapped to the chests of the suicide bombers in Congress and the Fed.
Check out this chart from Clusterchart. It compares percentages of job lost and recovered this recession versus every other post-World War II recession.
It’s ugly. Really ugly. And it doesn’t look like it’s going to get pretty any time soon.
Treasury Secretary Timothy Geithner warns of dire consequences if Congress doesn’t raise the debt limit. He says it will trigger a double dip recession.
This, of course, raises the zen-like question, how can we have a double dip recession when we’ve never really come out of the first one? Sure, we realize that economists say the first dip ended several quarters ago, but that’s like saying a baseball game ended in the third inning.
The National Journal is the medium that delivers Geithner’s message:
Treasury Secretary Tim Geithner said if Congress fails to lift the debt ceiling and the U.S. defaults on its obligations “this abrupt contraction would likely push us into a double dip recession,” painting the most explicitly dire prediction to date of the consequences of inaction.
In a heavily-anticipated response to Sen. Michael Bennet, D-Colo., who asked Geithner to document the economic and fiscal impacts of failing to lift the statutory debt limit, the Treasury secretary detailed a chain reaction that would cripple the economy, costing jobs and income.
A default would inflict catastrophic far-reaching damage on our nation’s economy, significantly reducing growth and increasing unemployment,” said Geithner in the letter to Bennet which was dated May 13. “Even a short-term default could cause irrevocable damage to the economy.”
The bottom line here is clear to anyone who’s paying any attention:
Things are going to get worse before they get better. The Obama administration knows it and is frantically casting around for someone else to take the blame.
Yesterday’s Labor Department nonfarm payrolls number showed jobs increased by 216,000 in March. Not a great number, but a hell of a lot better than we’ve been getting. But just in case you might have gotten all excited when you saw that number in today’s paper, along with the 8.8% unemployment number, you might want to put it all into perspective first, and take a look at the big picture, as charted by Chart of the Day.
Today’s chart puts the latest data into perspective by comparing nonfarm payrolls following the the end of the latest economic recession (i.e. the Great Recession — solid red line) to that of the prior recession (i.e. 2001 recession — dashed gold line) to that of the average post-recession from 1954-2000 (dashed blue line). As today’s chart illustrates, the current jobs recovery is much weaker than the average jobs recovery that follows the end of a recession. Today’s chart also illustrates that the current jobs recovery is slightly stronger than what occurred following the recession of 2001 and that the trend is up.
This last recession was much deeper and the recovery is much more shallow than the average recession.
Just how bad are the job losses in this Great Recession? Let’s put it this way: compare the losses against the previous recessions we’ve had since World War II, and you’ll come away wondering why our current recession (oops, sorry, I forgot the recession is over) is even called just a recession.
If you’re feeling good about the (expected) announcement of the renewal of the Bush tax cuts, wipe that silly optimism off your face and listen to Nouriel Roubini about the real state of the financial crisis — no, it’s didn’t go away — and how close we are to a new, and deep, recession.
Most think we’ve already seen the financial crisis and the resulting recession. But, Roubini says we’ve yet to see one of the worst recessions in decades and (still) the worst U.S. financial crisis since the Great Depression. At fault are the central bank, the fed, the treasury, who are all making major mistakes.
Things are going to get worse, he says, where Fannie and Freddie are insolvent, where hundreds of small banks are insolvent, where some regional banks go bankrupt and where even some of the national major banks are insolvent. And in a year or two there will not be any major independent broker-dealers left.
This is a major systemic financial crisis and there is no end to it. There is nothing that can be done at this point to save us.
Just how bad is the Great Recession, in terms of job losses. With unemployment now at 9.8% and with the disappointingly dismal numbers we received in yesterday’s jobs report, you already know it’s very, very bad. But this chart really puts it in perspective by comparing our current recession (perhaps more appropriately, near-depression) with all the recessions since World War II. We think you’ll agree, it’s not a pretty picture.
It shows job losses in percentage terms, from the start of the employment recession. The dotted line on the current recession shows payroll employment excluding temporary Census workers.
(Click to enlarge)
Thank God our president and congress have been focusing these last two years on all the things that really matter in terms of producing jobs: the destruction of health care, cap-and-trade, increasing regulations, fighting non-existent global warming climate change, paying back unions through the so-called stimulus package, threatening talk radio, postponing 2011 tax policy discussions, and fine-tuning his skills on the celebrity talk show circuit. Yes, he’s been a real help. And now the lame duck congress is doing their part but putting first things first: gays in the military, deluding ourselves that Russia will disarm along with us, and Mrs. Obama’s control of your child’s diet.
No wonder were doing so well. But as those defending all the actions of this administration say, hell, it would have been worse without all these actions. Uh huh.
R. Arthur Beckles: Barack Obama is President of all Americans, not just of African-Americans! It’s difficult for all working class Americans – black, white, brown, etc. African-Americans who don’t want to vote for Obama, can feel free to do so. But do they think that their lot...
keith: wow. Whos got the bigger stick, My @!(k is bigger than yours, your country my country, my countries poor is richer than yours. the truth of it is that in the end the civilians are going to feel the brunt of this economic downfall. i live in the U.S. and there are over 200 multi...
Anonymous: I agree with many of the above. I know people from both the US and Europe that are on disability because of health problems and the one person in Europe is receiving much more help than are the US citizens.
Sunday: BTW, before you ask why two adults only received $240 a week for unemployment, just remember that you can only receive unemployment if you were laid off. If you were fired or quit, you cannot receive unemployment. In my case, I got ill, and FMLA only applies to people who have worked at a...
EriktheRed: I like how it’s “fortunate that the crisis is confined to the E.U.”- what’s unemployment in the U.S. right now? How about the millions of foreclosures you’ve had already? Tent cities, anyone? Deficit spending at $3.5 bn a DAY? HMM!
David, Self Defense Retailer: Really? Why in the world are they doing that for Gitmo detainees? A whole soccer field? Outrageous! Maybe the EU really won’t last.
David, Stun Gun Supplier: It’s the next bubble. I wonder what Romney has to say about this. Obama’s made himself clear in his typical way. It’ll probably be worse than housing when it does.
See I told you: Who didn’t see this coming . Put a communist organizer in the White house and just wait. To bad the American populace lacks true intellect or is it just that the dummies out number the smart 20 to 1. Probably the latter. Obvious who controlls the vote with those kind of...
James: After a seriously obese person has had fat removal procedures, his/her flesh sags where excess fat used to be. World population should never have risen this high. It will be reduced. Through lower birth rates; or by more traditional means: war, disease, famine, cannabalism. I’m not a...
JoAnn: I have a real problem with Obama borrowing money to send to Greece when so many people in this country who have lost long term jobs,lost homes,living on the street, little or no food. I vote to take Obama and his family if they want to go and DROP them on a desert island some where just so...
Arkansas Slim: Update. Oil hit 105 per barrel yesterday, 2 20 12. Gas US Avg => 3.50 per gallon. Cloward Piven Theory of Economics: Tipping point of US Electorate => 51%. Nevada odds for Obama RE Election 6/10 on thier sport boards. EU/Greece set to collapse, dominos arranged. Socialistic...
kkl: America is now turning mediocre no more fun no more trips or vacations 100 bucks to fill gas tank and pasta and ramen noodles for life for usa there is no more hope no more fun just work go home work go home fill up gas tank eat shit and work no more fun thanks for nothing nobama i hope you...
Chris Marshall: Hi Janice, I just wanted to know, how would you be able to get a good investment out of the Whole Life Insurance if it costs really high? The projections usually given out by “Financial Advisors” that 12% is the usual earnings specially if it is invested in TSX or NYX...
Agent: Walt Disney funded Disney World by using the cash value in his whole life policy. You can’t say that was a mistake. Buy term for a specific need/period and buy whole for a permanent need or if you need your life insurance past age 65.
Forex Agent: As a financial advisor what I tell clients is that the main purpose of a life insurance policy is to provide a death benefit. Whether term, some sort of permanent life insurance, or a combination of the two is most appropriate depends on a number of factors including the...
Cindy: Before long they will, if not already, invade and keep track of everything you do including the privacy of your own home exploiting you and demanding that you worship them. You will be powerless to control it so you will have two choices…… ;kiss butt or commit suicide.
Space Cadet: don’t be rediculous. Glass Steagall is a red hearing. This problem is much farther reaching, from before the Nixon Administration. He took the US off the gold standard which was the pillar of the US dollar, and the reason it is the world currancy. He did that because the US...
Hervy: Very good advice, same as I give when talking to people. Clark Howard and Dave Ramsey are both good sources of information that is inline with what is written here at EC. Another good website that i tell people to go to in order to get an easy calculation of how much insurance to buy is...
BenP: This is part of the cannon fodder that will be used against Obama in 2012 and his administration. It’s not that he is horrible (he is) or worse than any other President (about the same), its that examples like these can be used to show the devil you know has got to be worse than the...
Lauren: Personally I think you sound like an idiot. The NIH spent 55,000 to promote a vacine that does not exist and, one of which, they would not fund to discover in the first place(yes, it’s ture look it up). If someone lives in an area with a lot of storms they already understand the...
Matt USA: I know I’m a little late to this discussion, but I think that the economic collapse scenario has changed somewhat in recent weeks. It appears that Europe will go first, followed by the United States who has gambled and lost on a TARP style European bailout. The real question for...
Kim: Marcy, Rep. Alan Grayson said in the attached youtube video in 2010 that Fannie Mae and Freddie Mac both own stock in MERS. How much stock and when did they own it? Would this explain their current actions? Did they move loans out of MERS and into Fannie Mae for the tax payers to bail out?...
China: @Serban Enache , You Are Wrong We are In Lot Of Trouble and you Know This , Starting In 2012 We will have Many Many Different Problems , We The Government Is Paying For All This Building , We Know Our Own Citizens Can’t Afford This Type Of Live Style , but we are building it Any way...
City On a Shining Hill: “The problem with socialism, i.e., the failed economic system being adopted by so many nations in the world today, is that in funding entitlement programs voters want in their politicians and having governments fund retirement, health care, education, etc, is that...
Rider I: How the US has historically used mineral rushes to get it out of Deficits and stop foreign economic take over. In the US’s historical past the Druids have used and impressed upon the US leadership to use mineral resources to stop economic warfare, along with military take over....
Financial Collapse: Everyone needs to get this correct… (REPOST ON TWITTER, FACEBOOK) America is controlled by the 3 privately owned states (district of columbia, the city of london, and the vatican.) Each has it’s own flag, pays no taxes and has it’s own laws. All 3 are part of...
Tm Newman: I graduated with my B.A. in psych/soc a year ago. Interned teaching math and English to fourth and seventh graders. The school shut down due to lack of funding. All the kids got shipped off to public school. I can’t find a position in my field, and there are no teaching jobs in...
hefsmaster: Been a slow couple weeks since the downgrade. News wise that is. But it gave me more time to coin a phrase. You’re a true libertarian when you piss everybody off. Which explains why everybody thinks were nuts and relegated to being a third wheel in politics. Well call me and...
PeacefulPatriot: The worst is yet to come in the realm of austere measures to keep up appearances on the global markets. The truth though is quite obvious to the sane members of society, we have reached a break point and it is the Systemic collapse of the post-industrial globalization bubble. All...
Serban Enache: Pearl Harbos was orchestrated as an operation years before WW2, by the British empire in conjunction with Imperial Japan. The japanese elite didn’t surrender even when they did not have any hope of wining, let alone after Hiroshima, though I don’t agree with the two...
hefsmaster: No, despite these guys obvious failings. He is exactly right. You think japan would have attacked us without any allies. Pearl harbor is an effect from a cause. Without hitler, point is mute. By the way lee, you haven’t copied anything in a while. You a congressman?
Serban Enache: This Larry Summers has some nerve. Is he trying to say that Hitler attacked Pearl Harbor?
Gordon Shumway: Two questions: 1. Why is it a felony for an individual to print money, but evidence of a keen insight into the arcane world of macroeconomics when a bankster does the same thing, only on a vastly greater scale? 2. Since those who are running the Fed and Treasury are supposed to be...
tim: i for one will not pay a single dr bill my sickness is caused by our government let’s take it back already raped and brusied lady liberty is not what she stood for so many years lets scrap the statue that means so little any more freedom is prison in america try being disabled for 20...
tim: well about time someone in power noticed what wool us seniors have to face daily after food shopping go to my drug store same tricks and and cost is up 25 percent then dr co-pays up another 20 % what will we do when money social security doesnt go far enough to keep us healthy
Space Cadet: Does it matter how we got here? The people in charge ‘think’ they are so smart that they will finesse our way out, while staying in power and making a ton of money for their pals. We will be left to pick up the tab and clean up the mess, as usual. My neighbors just got...
