Posted on 08/31/2011 6:24:54 AM PDT by SanFranDan
Thanks Barack.
Forget the ifs, ands or buts… According to the top economics blog on the internet the US economy is already in recession.
The Economy Quietly Entered A Recession On Friday Tyler Durden at Zero Hedge reported:
While the key market moving event from last Friday may have been Bernanke’s Jackson Hole speech which merely left the door open to future QE episodes, the most important event from an economic standpoint was the first GDP revision Q2, which dropped from preliminary 1.3% to a sub stall speed, in real terms, 1.0%.
What is just as important is that as the following chart from Bloomberg demonstrates, the YoY change in real GDP, which is now at 1.5%, is a slam dunk indicator of recession: “Since 1948, every time the four-quarter change has fallen below 2 percent, the economy has entered a recession. It’s hard to argue against an indicator with such a long history of accuracy.”
Bernanke agreed that “growth has for the most part been at rates insufficient to achieve sustained reductions in unemployment.” And while Bernanke is shifting dangerously into Greenspan territory with the open-ended interpretation of his statement, another thing that is more actionable is the observation that virtually every time real YoY GDP has dropped below 1.5%, this has led to a negative nonfarm payroll number.
Granted, the result may not be as shocking as what the Philly Fed implied vis-a-vis this Friday’s NFP, but we believe a subzero print in the August labor report will convince the three Fed holdouts that the time for yet another monetary intervention is here (Arab Spring part deux consequences be damned).
And, here are the latest micro-economic charts that tell the real story behind the Obama economy.
(Excerpt) Read more at thegatewaypundit.com ...
The best predictor of a recession is the Treasury Yield curve. At this writing, the yield curve is still very steep. That is not indicative of an impending recession.
—The best predictor of a recession is the Treasury Yield curve. At this writing, the yield curve is still very steep. That is not indicative of an impending recession.—
I don’t think the treasury yield curve is an indication of anything other than what the people impacting the curve believe. And all they can control is the yield curve - for a time - until reality forces their hand. It hasn’t yet, but I believe it will.
Remember Buffet buying all that BofA stock? That is the sort of thing large private investors were doing in the weeks and months that led up to the 1929 crash. But they too eventually ran out of money to prevent the inevitable.
Not this time. The Fed's purchases of Treasury Bonds have completely distorted interest rates. We don't have any idea what a free market yield would look like.
This time it is not different.
The proof is in the pudding, and the yield curve is till quite steep.
Stock markets are much less reliable predictors of economic slowdowns.
The FED is no longer buying Treasuries a la QE or QE2.
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