Is the US in a Recession?
Ask a group of Wall Street Economists of we are in a Recession, and you get some interesting results: 52% say yes, down from 76% in April.
The chart on the right is the most recent survey answers (May), while April is to the right.
Source:
Economic Forecasting: June 2008
WSJ, June 13, 2008 http://online.wsj.com/public/resources/documents/info-flash08.html?project=EFORECAST07
Friday, June 13, 2008 | 06:26 AM | Permalink
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That stat is like having 1000 random people help Michaelangelo paint the Sistine Chapel.
Posted by: Chad | Jun 13, 2008 7:08:00 AM
Wrong, Chad. It's like having 1000 UNTALENTED people help Michelangelo :)
Stereotypical talking heads in a "science" that's little better than astrology. Well, I guess that's not true. Probably more people believe in astrology. And it's right more often.
Posted by: Mike in NOLA | Jun 13, 2008 7:16:09 AM
clearly the bearish dudes have been laid off...funny how that happens.
Posted by: lurker | Jun 13, 2008 7:18:32 AM
"52% say yes, down from 76% in April."
Even economists get suckered by month-to-month comparisons, instead of looking at y-o-y data. When you got no scientific basis for your profession, you gotta fall back on voodoo, if not doodoo.
Meanwhile, on the opposite side of the planet, I'm watching the Shanghai index getting poleaxed into powder. Jesse Livermore's correct notion that the 1906 San Francisco earthquake would be disinflationary and recessionary (see 'Panic of 1907') is being replayed 102 years later in China, after the tragic Sichuan earthquake. Swingeing bank reserve hikes have added to the pain; and the 'Olympic curse' kicks in on 8/8/08 at 08:08:08.
Chinese are smart enough to consult fortune tellers, not economists, when they need some insight into the future, or even the present. Do not attempt this with Townsend-Greenspan & Co.
Posted by: Jim Haygood | Jun 13, 2008 7:54:21 AM
@ Mike - Your right, I should have been clearer. They would definately have to be untalented. Heck, they would also have to have beliefs that have nothing to do with painting affecting how they paint, in order for my example to be accurate.
Posted by: Chad | Jun 13, 2008 7:58:18 AM
Barry, I thought you'd be all over one of the selection of comments:
You can't have a recession with continuous economic growth.
Posted by: Josh | Jun 13, 2008 8:03:08 AM
The only economic growth you have is inflation in energy and food. Is that the economic growth you mean?
Move along, nothing to see, economy is great, keep spending.
Give me a break!
Posted by: Ken H. | Jun 13, 2008 8:16:49 AM
great point---Hey Barry!
Inflation is the new growth!
Posted by: lurker | Jun 13, 2008 8:21:01 AM
They're sheep. Independent thinking is on life support (maybe it always has been). Most people, in most professions, go through the motions (nothing has changed since high school): If A turns to B then C will turn to D. They all have been taught the same lessons, by the same teachers and they follow blindly without THINKING. Just look at all the financial "experts" who didn't see the mortgage mess coming. Many economists see the headline numbers and take them at face value and extrapolate from there. They look no deeper - no WORK or THOUGHT involved. You are a dying breed BR.
Posted by: noXpert | Jun 13, 2008 9:00:13 AM
IMHO we are definitely in a Recession (at a minimum). It's just a matter of letting the data catch-up with reality. I just hope that is all that it is. I'm 51 and I'm seeing MANY things that I have never seen in my lifetime. There are telltale signs all over the place and it scares the crap out of me.
As always, you never know what you are in the middle of until it is already over. We are definitely in the middle of something. I just hope like hell it is ONLY a recession and doesn't evolve into something far worse.
I hate the phrase "perfect storm"; but, that is what it looks like to me. There is a whole slew of financial stats, both public, corporate and governmental that are well beyond being regarded as dismal. Where does all of this end? Do we really want to know?
Posted by: BG | Jun 13, 2008 9:04:03 AM
Two typical headlines from Bloomberg today:
1) U.S. Consumer Prices Rise 0.6% as Fuel Costs Soared (Update1)
By Shobhana Chandra
June 13 (Bloomberg) -- U.S. consumer prices rose more than forecast in May as Americans paid more for fuel, underscoring the Federal Reserve's concern that inflation will pick up.
2)U.S. Stock-Index Futures Rise as Oil Drops; UAL, AMR Advance
By Adria Cimino and Eric Martin
June 13 (Bloomberg) -- U.S. stock-index futures advanced as oil fell and consumer prices excluding food and energy matched forecasts in May, lessening concern inflation will force the Federal Reserve to raise interest rates.
...No comment...
Posted by: Ivo | Jun 13, 2008 9:16:22 AM
I'm a bigger fan of the other recession question in the survey becuase it has a longer track record, and you can get data on the individuals, who said what and when.
William T. Wilson gets special honors for bouncing around like a yo-yo, yes recession, no recession, yes recession, no recession.
60.8% of economists believe a recession is here or approaching
Posted by: Michael Donnelly | Jun 13, 2008 9:38:52 AM
Things are booming. Of course BB is going to raise rates now to drive mortgage rates up higher in an election year. Housing that isn't selling.
It is funny that when you ask Joe Main Street the direction of the country he has been consistent. And the talking heads just keep trying to tell him why he is wrong.
I started to read EASTERBROOK in the WSJ talking about how great it is. He is upset the Dems are running an ad that asks are you better off now than 2000, then the jerk goes on to say unemployment is only 5.5%. When I looked it up unemployment in 2000 was only 3.9%.
I quit reading when he wrote this in the next paragraph "close to inflation-free; living standards are the highest they have ever been, including living standards for the middle class and for the poor."
"Some of the current gloom-and-doom may be explained by the human propensity to romanticize the past." I guess he means I pine for the days before my job was off-shored to India by IBM. Maybe he means when health care and copays we affordable. Maybe he means when we had a pension.
Much better off today, even 94% of the homes are not in foreclosure. Damn I guess that means their value is appreciating too?
Posted by: me | Jun 13, 2008 10:02:32 AM
UMich consumer sentiment at 56.7 is the lowest in at least 30 years ... as far as this chart goes back, anyhow:
http://martincapital.com/chart-pgs/Ch_conco.htm
If it's not a recession, how come folks is so damned scared? If they scared, how they gon' buy cars and houses?
How can ye have any pudding, if ye don't eat yer meat?
Posted by: Jim Haygood | Jun 13, 2008 10:04:34 AM
We all know the inflation stats are a farce. Hell, they don't actually measure "inflation" (money/credit supply) anyway, they measure price levels.
One thing that is cheap in addition to the things BR mentions are high end used cars (and SUVs if that's your thing). Recently bought a used bimmer 528i at a huge discount. 50k miles, a few years old, and I paid less than 25% of the original sales price. Paid cash of course.
Posted by: Alaskan Pete | Jun 13, 2008 11:58:30 AM
The liquidity injections by the Fed, and the “free money” doled out by Congress are helping to temporarily mask weakness that would otherwise have been there. But like a narcotic, these effects will soon wear off, and the patient will be worse off as a result (in the case of the economy, more inflation and a higher deficit).
Posted by: DL | Jun 13, 2008 1:11:24 PM
In a scientific survey published today on the web site rukiddin-me.info, it was found that 89% (+/- 9.895840%) of the financial blogs daily users think that economic thinking is in the grips of a prolonged and deep recession.
Posted by: Francois | Jun 13, 2008 5:55:16 PM
economic:thinking::jumbo:shrimp
Posted by: Rentor(tm) | Jun 13, 2008 7:02:19 PM
