This Recession, It’s Just Beginning

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Here is happier spin on data from Barron’s Gene Epstein June 9 (it’s less rosy than typical from Mr Optimistic):

“Take the recent 3.9% reading on year-over-year consumer price index inflation, add May’s 5.5% jobless rate, and you get a misery index of 9.4%. While far below the peak — which topped 21% in mid-1980 — the MI can be regarded as a harbinger of the economic outlook over the next year or two.

That outlook is for stagflation: inflation combined with slow or stagnant growth and rising unemployment.

There is still some question whether those in charge of these matters will ever see fit to declare that the economy is in recession. But given the stubborn rise in food and energy prices, inflation is likely to persist, squeezing incomes. And with credit still scarce, growth in gross domestic product should crawl along at an annual rate of 1%-2% at best. With growth not fast enough for the increase in jobs to keep up with the growth of the labor force, the jobless rate will keep rising. So will the index of misery.

But while all that is miserable enough, the biggest jump in the unemployment rate in a quarter-century is still far less alarming than it might seem.

The employment report for May, released Friday morning, indicated that joblessness had risen to 5.5% from 5% in April. But more than half the increase was concentrated among 16-to-24-year-olds. Unemployment among workers 25 and older, sometimes referred to as the “prime-age” labor force, rose by two-tenths of a percentage point, to 4.1% from 3.9%. And while that is hardly good news, it’s by no means a record — and about what you’d expect under the slow-growth conditions of the past year.”

http://online.barrons.com/article/SB121279417126053513.html

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[stockstradr]

I tend to be gloom-and-doom oriented, but my predictions are often accurate.

So here’s my prediction on this recession.

Not only will this be a deep and long recession, but the USA will NEVER fully recover from it. This recession coincides (and is driven from) both a a credit cycle bottoming, AND an historic reordering of global economics, plus the end of the Age of Oil. The USA will be the loser in the New World Order, where the 3rd world rises and we fall, and the USA is least prepared for the end of the Age of Oil.

The recession will be global, for example, China’s GDP will be cut at least in half for a year or two; however, it is possible China’s GDP won’t go negative. So one could say I expect significantly lowered growth for China but not necessarily a painful recession. However, I see Asia quickly and fully recovering from this recession.

I think this reordering of global economic and political power could take ten years, but then the typical American will be left stunned at how dramatically our standard of living (and world political power) will have been reduced.

Case-in-point for a Typical American. You own a big SUV. You live in a big McMansion (mortgage underwater) that is a 100 mile commute from your job but in typical American fashion, mass transportation has never been built that can take you where you want to go.

Gas goes to $10/gallon, or it isn’t even available at all.

Even if you don’t lose your job (recession) you’ve got no cost-effective way to get to work. You’re screwed.

Oh, and let’s not forget that the dollar has by then ..say fallen to less than 1/10 of its value today.

So now you go to Walmart, but unfortunately all those made-in-China products are now expensive relative priced in a very weakened dollar.

I’m really afraid for the future of our country.

[stockstradr]

I tend to be gloom-and-doom oriented, but my predictions are often accurate.

So here’s my prediction on this recession.

Not only will this be a deep and long recession, but the USA will NEVER fully recover from it. This recession coincides (and is driven from) both a a credit cycle bottoming, AND an historic reordering of global economics, plus the end of the Age of Oil. The USA will be the loser in the New World Order, where the 3rd world rises and we fall, and the USA is least prepared for the end of the Age of Oil.

The recession will be global, for example, China’s GDP will be cut at least in half for a year or two; however, it is possible China’s GDP won’t go negative. So one could say I expect significantly lowered growth for China but not necessarily a painful recession. However, I see Asia quickly and fully recovering from this recession.

I think this reordering of global economic and political power could take ten years, but then the typical American will be left stunned at how dramatically our standard of living (and world political power) will have been reduced.

Case-in-point for a Typical American. You own a big SUV. You live in a big McMansion (mortgage underwater) that is a 100 mile commute from your job but in typical American fashion, mass transportation has never been built that can take you where you want to go.

Gas goes to $10/gallon, or it isn’t even available at all.

Even if you don’t lose your job (recession) you’ve got no cost-effective way to get to work. You’re screwed.

Oh, and let’s not forget that the dollar has by then ..say fallen to less than 1/10 of its value today.

So now you go to Walmart, but unfortunately all those made-in-China products are now expensive relative priced in a very weakened dollar.

I’m really afraid for the future of our country.

[stockstradr]

I tend to be gloom-and-doom oriented, but my predictions are often accurate.

So here’s my prediction on this recession.

Not only will this be a deep and long recession, but the USA will NEVER fully recover from it. This recession coincides (and is driven from) both a a credit cycle bottoming, AND an historic reordering of global economics, plus the end of the Age of Oil. The USA will be the loser in the New World Order, where the 3rd world rises and we fall, and the USA is least prepared for the end of the Age of Oil.

The recession will be global, for example, China’s GDP will be cut at least in half for a year or two; however, it is possible China’s GDP won’t go negative. So one could say I expect significantly lowered growth for China but not necessarily a painful recession. However, I see Asia quickly and fully recovering from this recession.

I think this reordering of global economic and political power could take ten years, but then the typical American will be left stunned at how dramatically our standard of living (and world political power) will have been reduced.

Case-in-point for a Typical American. You own a big SUV. You live in a big McMansion (mortgage underwater) that is a 100 mile commute from your job but in typical American fashion, mass transportation has never been built that can take you where you want to go.

Gas goes to $10/gallon, or it isn’t even available at all.

Even if you don’t lose your job (recession) you’ve got no cost-effective way to get to work. You’re screwed.

Oh, and let’s not forget that the dollar has by then ..say fallen to less than 1/10 of its value today.

So now you go to Walmart, but unfortunately all those made-in-China products are now expensive relative priced in a very weakened dollar.

I’m really afraid for the future of our country.

[stockstradr]

I tend to be gloom-and-doom oriented, but my predictions are often accurate.

So here’s my prediction on this recession.

Not only will this be a deep and long recession, but the USA will NEVER fully recover from it. This recession coincides (and is driven from) both a a credit cycle bottoming, AND an historic reordering of global economics, plus the end of the Age of Oil. The USA will be the loser in the New World Order, where the 3rd world rises and we fall, and the USA is least prepared for the end of the Age of Oil.

The recession will be global, for example, China’s GDP will be cut at least in half for a year or two; however, it is possible China’s GDP won’t go negative. So one could say I expect significantly lowered growth for China but not necessarily a painful recession. However, I see Asia quickly and fully recovering from this recession.

I think this reordering of global economic and political power could take ten years, but then the typical American will be left stunned at how dramatically our standard of living (and world political power) will have been reduced.

Case-in-point for a Typical American. You own a big SUV. You live in a big McMansion (mortgage underwater) that is a 100 mile commute from your job but in typical American fashion, mass transportation has never been built that can take you where you want to go.

Gas goes to $10/gallon, or it isn’t even available at all.

Even if you don’t lose your job (recession) you’ve got no cost-effective way to get to work. You’re screwed.

Oh, and let’s not forget that the dollar has by then ..say fallen to less than 1/10 of its value today.

So now you go to Walmart, but unfortunately all those made-in-China products are now expensive relative priced in a very weakened dollar.

I’m really afraid for the future of our country.

[stockstradr]

I tend to be gloom-and-doom oriented, but my predictions are often accurate.

So here’s my prediction on this recession.

Not only will this be a deep and long recession, but the USA will NEVER fully recover from it. This recession coincides (and is driven from) both a a credit cycle bottoming, AND an historic reordering of global economics, plus the end of the Age of Oil. The USA will be the loser in the New World Order, where the 3rd world rises and we fall, and the USA is least prepared for the end of the Age of Oil.

The recession will be global, for example, China’s GDP will be cut at least in half for a year or two; however, it is possible China’s GDP won’t go negative. So one could say I expect significantly lowered growth for China but not necessarily a painful recession. However, I see Asia quickly and fully recovering from this recession.

I think this reordering of global economic and political power could take ten years, but then the typical American will be left stunned at how dramatically our standard of living (and world political power) will have been reduced.

Case-in-point for a Typical American. You own a big SUV. You live in a big McMansion (mortgage underwater) that is a 100 mile commute from your job but in typical American fashion, mass transportation has never been built that can take you where you want to go.

Gas goes to $10/gallon, or it isn’t even available at all.

Even if you don’t lose your job (recession) you’ve got no cost-effective way to get to work. You’re screwed.

Oh, and let’s not forget that the dollar has by then ..say fallen to less than 1/10 of its value today.

So now you go to Walmart, but unfortunately all those made-in-China products are now expensive relative priced in a very weakened dollar.

I’m really afraid for the future of our country.

[jficquette]

[quote=LA_Renter][quote=hipmatt]http://www.washingtonpost.com/wp-dyn/content/article/2008/06/26/AR2008062604030.html

So much for that second-half rebound.

Truth be told, that was always more of a wish than a serious forecast, happy talk from the Fed and Wall Street desperate to get things back to normal.

It ain’t gonna happen. Not this summer. Not this fall. Not even next winter.
[/quote]

That has been my sentiment through the entire first half of this year. These bear market rallies are becoming comical. I have to admit I enjoy watching CNBC on these big downward movements just to see the expression of the permabull pollyannas..(you mean there really isn’t a Santa Clause…Oh NO!). We have just witnessed one of the largest financial bubbles in the history of the markets…..POP! What do you think the correction is going to look like??
[/quote]

That is one reason the Vix is so low. People have been burned shorting this market and are thinking its just another sell off that will be followed by a rally that will last.

Rather then “slow motion recession” it would be more accurate to term it a “slow motion train wreck”

John

[jficquette]

[quote=LA_Renter][quote=hipmatt]http://www.washingtonpost.com/wp-dyn/content/article/2008/06/26/AR2008062604030.html

So much for that second-half rebound.

Truth be told, that was always more of a wish than a serious forecast, happy talk from the Fed and Wall Street desperate to get things back to normal.

It ain’t gonna happen. Not this summer. Not this fall. Not even next winter.
[/quote]

That has been my sentiment through the entire first half of this year. These bear market rallies are becoming comical. I have to admit I enjoy watching CNBC on these big downward movements just to see the expression of the permabull pollyannas..(you mean there really isn’t a Santa Clause…Oh NO!). We have just witnessed one of the largest financial bubbles in the history of the markets…..POP! What do you think the correction is going to look like??
[/quote]

That is one reason the Vix is so low. People have been burned shorting this market and are thinking its just another sell off that will be followed by a rally that will last.

Rather then “slow motion recession” it would be more accurate to term it a “slow motion train wreck”

John

[jficquette]

[quote=LA_Renter][quote=hipmatt]http://www.washingtonpost.com/wp-dyn/content/article/2008/06/26/AR2008062604030.html

So much for that second-half rebound.

Truth be told, that was always more of a wish than a serious forecast, happy talk from the Fed and Wall Street desperate to get things back to normal.

It ain’t gonna happen. Not this summer. Not this fall. Not even next winter.
[/quote]

That has been my sentiment through the entire first half of this year. These bear market rallies are becoming comical. I have to admit I enjoy watching CNBC on these big downward movements just to see the expression of the permabull pollyannas..(you mean there really isn’t a Santa Clause…Oh NO!). We have just witnessed one of the largest financial bubbles in the history of the markets…..POP! What do you think the correction is going to look like??
[/quote]

That is one reason the Vix is so low. People have been burned shorting this market and are thinking its just another sell off that will be followed by a rally that will last.

Rather then “slow motion recession” it would be more accurate to term it a “slow motion train wreck”

John

[jficquette]

[quote=LA_Renter][quote=hipmatt]http://www.washingtonpost.com/wp-dyn/content/article/2008/06/26/AR2008062604030.html

So much for that second-half rebound.

Truth be told, that was always more of a wish than a serious forecast, happy talk from the Fed and Wall Street desperate to get things back to normal.

It ain’t gonna happen. Not this summer. Not this fall. Not even next winter.
[/quote]

That has been my sentiment through the entire first half of this year. These bear market rallies are becoming comical. I have to admit I enjoy watching CNBC on these big downward movements just to see the expression of the permabull pollyannas..(you mean there really isn’t a Santa Clause…Oh NO!). We have just witnessed one of the largest financial bubbles in the history of the markets…..POP! What do you think the correction is going to look like??
[/quote]

That is one reason the Vix is so low. People have been burned shorting this market and are thinking its just another sell off that will be followed by a rally that will last.

Rather then “slow motion recession” it would be more accurate to term it a “slow motion train wreck”

John

[Author]

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