Posted on 11/30/2009 8:58:50 AM PST by FromLori
And if this is a recovery, it's the worst recovery of all time.
David Rosenberg -- who has been getting into fights with other pundits left and right -- digs in and argues that what we're really looking at is a depression.
MORE ON THE DEPRESSION
Last week, we received some classic guffaws when we responded to whether or not the recession has ended with this: “We’re not convinced, but even if it is statistically over, the depression is ongoing”.
We were reprimanded by former Fed Governor Mishkin for breeding “fear”.
The eyes were rolling among the Squawk Box crew and we were told to tell that to Mr. Market, who has rallied more than 60% from the March lows (“artificial” lows, we were told off camera). After all, Mr. Market is so adept at calling the economy – like the peak in late 2007, literally weeks ahead of what the polite economics crowd dubs “The Great Recession”; or how adept Mr. Market was in calling the 2001 tech wreck; or the three failed attempts at predicting recovery over the past two years. Mr. Market’s ability at calling the economy, is shall we say, a tad spotty.
In fact, even with the massive amount of stimulus in modern history, all the economy could do was muster up a 2.8% annualized growth rate in Q3. If that number stands, it will go down as just about the poorest bounce off a recessionary environment on record.
History, by the way, shows that 80% of the time, the opening quarter of the recovery ends up being a pretty good predictor over the extent of the economic pickup we see in the year that follows. So, that near 5% GDP growth backdrop being projected by Mr. Market right now looks to be more
(Excerpt) Read more at businessinsider.com ...
ping
Please. If this were a depression, I wouldn’t have had to wait an hour-and-a-half for a table at an expensive steak restaurant this weekend. Has anyone here been to a mall lately? People bloody everywhere buying non-essentials.
Ask your grandparents or great-grandparents if this is a depression — I’m sure they could tell you very specifically what a depression looks like.
SnakeDoc
It will soon become undeniable that its a depression.
Now, as for calling this a ‘depression’, it is an attempt at providing a reality check to Wall Street research forecasts of a robust recovery. Practically everyone thought the worst was over in 1930 but all we were in at that time was the classic phase 2 of the triple-waterfall — the “reflex rally” that comes on the heels of the “initial sharp down” to only then be followed by the long and drawn out decline to the fundamental low. The Great Depression didn’t even receive that label until 1934 and by then we were well over a year past the lows in both real GDP and the stock market.
When 2012 comes, it may seem like the "end of the world" by that time... LOL...
>> Running up the credit cards at this point.
I’m not so sure. All indications are that credit spending is way down. Credit is harder to come by, and polling suggests that people are far more eager to eschew debt altogether.
SnakeDoc
And/Or government parasites and union thugs with plenty of absconded tax money to burn.
I wonder how many people buying fancy diners were part of the real 17% out of work? My anecdotal evidence is yes we are in a depression and the worst is yet to come. I know lots of people who have had lay offs, pay cuts, and cuts in hours. Small businesses are hurting, some sectors more than other. Smoke and mirrors by the govt is all that has kept the facade from falling apart - so far. When someones unemployment insurance runs out(not around in the depression), then what? And in case you haven't noticed it the US government and several states already have unsustainable debt. They didn't save for a rainy day and its pouring.
Ask your grandparents or great-grandparents if this is a depression — I’m sure they could tell you very specifically what a depression looks like.
At the height of the Great Depression, 25% of the workforce was out of work. We're approaching that now. We're close to 20% as of right now (in terms of those who are also no longer looking for work and have dropped off the radar, and in the way things were calculated back during Reagan's term for "unemployment").
So, we'll be arriving at 25% unemployment soon...
And even so, back when there was 25% of the workforce unemployed, there was still 75% still working and buying things and "going out for steak dinner" too... LOL...
It was still the Great Depression and the worst we had seen, nonetheless...
Many people have the tendency to "call it" according to what is happening to them and somewhat with those around them, too.
It's as I've heard said before (somewhat loosely repeated here by me...) ...
It's a Downturn if you read about in the papers that people are out of work. It's a Recession if your neighbor is out of work. And it's a Depression if you're out of work. LOL...
But, objectively, I would say we're in a deepening Depression, at the moment.
Around here Black Friday looked like a bust to me. Other than the mad rush at 4:00am to buy a big screen TV below cost (which I avoided entirely), the stores were relatively empty. I made some purchases later that day and generally didn't have to wait behind more than a couple of people in line. It's not like 2007 and before where even at 3pm (long after the doorbuster prices expired) the lines were a dozen deep at every cash register with temporary registers brought out from the back room.
It will soon become undeniable that its a depression.
There are always those who are in deep denial and can continue denying it, because they are still working (while large numbers of others are not) and even though there are foreclosures, bank closings and bankruptcies and government take-overs and so on.
To those in deep denial, as long as they can get by and some people that they know can get by -- it's all false and there is no Depression... LOL...
And FRee Republic has its share of those big-time Depression deniers... :-)
This depends somewhat on what area of the country you’re in — and everyone (myself included) seems to base their assessment of the situation on the anecdotal evidence in their locality.
Michigan — clearly a depression. Here in Texas — its barely a recession. When you average out the country, it isn’t a depression. For every Detroit, there’s a Houston. For every Cincinnati, there’s a Nashville.
I don’t deny that its hard out there ... I went through a long period of unemployment myself. But, it never looks as bad in hindsight as it appears from in the midst. It is difficult to accurately assess the severity of a situation that is presently affecting you.
SnakeDoc
Exactly
Black Friday Was A Huge Hit Because Americans Are Broke
http://www.businessinsider.com/more-people-than-ever-shopped-on-friday-but-they-spent-8-less-2009-11
I dont give a rat’s arse what it’s called..Teleprompter Jesus couldn’t solve it with his hopeydopeychangey Kool Aid and it’s all on him.
Agree
Black Friday Was A Huge Hit Because Americans Are Broke
http://www.businessinsider.com/more-people-than-ever-shopped-on-friday-but-they-spent-8-less-2009-11
Nobody died this year but Americans went completely nuts
Here’s video of the inside of one Wal-Mart (WMT) during Black Friday. We have to wonder: where is all the security?
http://www.businessinsider.com/what-really-happened-inside-walmart-during-black-friday-2009-11
http://www.nytimes.com/2009/11/29/us/29foodstamps.html?_r=2&hp
Even in the poorest countries, cafes and public spaces are always full. Do you think if we were in a depression, everyone would just stay home in despair?
Being in the retail business, I can tell you that traffic is down, significantly. Even worse, many of those people you see crowding nice restaurants are doing so with coupons, looking for specials, skipping that appetizer, that dessert, that extra cocktail. And it's THOSE things which bring profits (and income for servers).
Michigan — clearly a depression. Here in Texas — its barely a recession. When you average out the country, it isn’t a depression. For every Detroit, there’s a Houston. For every Cincinnati, there’s a Nashville.
When you've got numbers for unemployment that are approaching 20% for all people not employed but who can be and would want to be -- then you're also approaching the levels of where the last Great Depression was, at the height -- of 25% unemployment. We're not too far away from there.
Of course there are local disparities around the country, one way or another. Why do you think the Okies went to California? LOL...
I don’t know where you officially draw the line between recession and depression, but in my 48 years on this planet, I have NEVER seen things as bad as they are right now. The business where I work has seen business drop by as much as half over the last year.
Whatever you call it, I guess if you’re out of work, it might as well be a depression.
Is it your belief that all depressions are as bad as the Great Depression, and further, that everyone suffers roughly equally during a depression?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.