Monday, April 12, 2010


Greetings good citizen,

Are Happy Days just around the corner or are the psychics charged with determining our collective fortunes still too stoned to remember what they’re supposed to be doing?

The calendar tells the Bulls among us that the, er, ‘downturn’ (that ironically followed the ‘Goldilocks Economy’) Should be over…but no one can find sufficient reason to terminate the Great Recession based on hundredths of a percentage point improvements that are in reality accounting tricks.

Or, as we have shown here, the disastrous results of people who have stopped paying for their homes, freeing up that extra cash so they can ‘acquire’ durable, yet mobile lifestyle accessories. (a.k.a. camping gear.)

Yep, ‘consumer spending’ has definitely ‘recovered’ given the millions who have already lost their homes to foreclosure, never mind the millions more who have merely stopped paying their mortgages…

Um, have you ever wondered what they’d do if we all stopped paying? Who would they sell their drafty stacks of lumber to if we all decided to become ‘squatters’?

An ‘academic’ question for sure…but while we’re here I have another question for you…what is the difference between politics and economics?

That’s probably piss poor framing and we’d be better served to ask flat out ‘what is economics?’

You can bet the answer WOULDN’T be: “The science of rationalizing the politically unacceptable…”

Although there is nothing ‘wrong’ with that answer, it is perfectly correct. How long do you suppose economics would remain a viable academic pursuit if it were defined as such? Not long.

But I digress…let’s see how well our ‘economists’ can defend their collective failure to end ‘The Great Recession’ on schedule…

Recession Arbiters, Wary of Certifying an Upturn
Published: April 11, 2010

A committee of economists, charged with determining the official turning points in the nation’s business cycles, certifies the beginnings and ends of recessions. But this time, the committee members say, the evidence is not so easy to decipher. [It is indeed difficult to contradict overwhelming evidence to the contrary on ‘faith’ alone…]

The committee plans to announce on Monday that it cannot yet declare an end to the recession that began in December 2007, several members indicated on Sunday. Such an acknowledgment is rare in the history of setting dates to business cycles and could affect the behavior of investors and consumers. [Not to mention that sane people everywhere SHOULD BE heading for the hills…but that’s just my opinion…]

Despite a recent uptick in employment and income[?], the decision of the committee at a meeting on Friday reflects a lingering worry that the economy could turn downward again in a so-called double-dip recession. [This is ‘news’, ‘somebody’ got a raise or did the executives glom that for themselves too and we’re really talking ‘Bill Gates’ effect (again)? Justifying the politically indefensible is apparently getting tougher with each passing day!]

Several economists on the committee, which has seven active members [But apparently not unanimous…] said they considered such a turn to be unlikely. But, they said, the duration and severity of the contraction have made it hard to determine with authority that a recovery has begun. [It’s one thing to be ordered to do something and quite another to dig up the evidence that allows you to do it…although they COULD lie…it worked the first two times…although this IS the THIRD TIME IN A ROW they’ve had to claim a ‘jobless recovery’…]

The gross domestic product, the broadest measure of economic activity, officially began rising [these ‘reports’ have also been officially proven to be the product of ‘creative accounting’ a la Enron.] in the second half of 2009, suggesting that a recovery might have quietly started. But the committee takes other factors into consideration, like employment trends and consumer confidence. [Consumer confidence? They can’t be serious! Is this another incidence where if you are unemployed or otherwise ‘marginalized’ your, er, ‘state of mind’ doesn’t count? WTF! How much bullshit will you permit to be rammed up your backside?]

Ben S. Bernanke, the Federal Reserve chairman, and Christina D. Romer, the chairwoman of the White House Council of Economic Advisers, are former members of the committee, and its position could potentially affect their outlook on monetary and fiscal policy. [How fortunate is it for us that their outlook doesn’t mean a thing when push comes to shove. When their overlords say ‘up go the rates’, the rates go up…and that’s all she wrote. Who cares what the ‘stooge’ thinks?]

The two previous recessions, in 1990-91 and in 2001, each lasted eight months and were mild enough that the committee felt confident in pronouncing them over in a year or less. As it was, the current recession was 11 months old before the committee announced its start date. [Understand how difficult it must have been to admit that the ‘Great Moderation’ had given way to the Great Recession…although the media has been exceeding kind to itself by totally failing to acknowledge their own mendacity, never mind duplicity…]

Now, the committee, which is part of the National Bureau of Economic Research, a nonprofit group, says that the timing of an upward turn has been harder to discern than in the past. Moreover, the government has revised several statistics after they were initially released, making it more difficult to say when the economy hit bottom. [It is exceeding difficult to point to something that isn’t there!]

“Hypothetically, if there were a new sharp downturn that came along tomorrow, would it count as a new recession or part of the same recession?” asked Jeffrey A. Frankel, a member of the panel, officially known as the Business Cycle Dating Committee. “In the latter case, we would have made a mistake by calling the trough last year and saying the recession was over.” [His concern is perfectly understandable, there is no place for the current economy to go but down…]

In interviews, several committee members carefully chose their words. Citing job gains in March, Mr. Frankel, an economist at the Harvard Kennedy School, declared on his blog last week, “The recession is over.” He said he made that case when the committee met Friday in Cambridge, Mass., but added that he could see that a strong argument could be made for holding off on a pronouncement. [Is it really a ‘recovery’ if only one sector of the economy can see/benefit from it? I didn’t pick this article to defend my earlier assertion about economics/economists but it is doing a dandy job of illustrating my point!]

Another committee member, Robert E. Hall of Stanford, said, “The odds favor the view that a true expansion has begun and that the recession beginning in 2007 is over.” [How Odd do you have to be Bob? Pretty damn odd if you ask me…maybe a little too odd.]

But he added that “one cannot totally rule out the unlikely possibility that the economy might resume contraction again soon.” [Say WHAT??? If the economy ‘contracts’ much more than it already has it will disappear! (How’s that for defending the politically indefensible?) This is the ONLY factor that causes these idiots to discount the likelihood of a ‘double-dip’ recession, the economy, such as it is, CAN’T contract much more (without imploding!)]

Under such a situation, he said, the upswing that began in the second half of 2009 would be “only an interruption in a longer contraction, and not an expansion.” But he added, “Currently, forecasters are assigning low probability to such a development.” [See above as to why…]

A third committee member, James H. Stock, a Harvard economist, has also been associated with the belief that the recession ended last year. On Sunday, Mr. Stock would not describe the discussion. [Jesus! Are these guys getting paid by the word? They interviewed most of the panel…it seems only two had the good sense to keep their opinions to themselves… I will do likewise and resist my inclination to delete the balance of this article…you might as well read it here. See you at the bottom.]

But he said: “It’s incumbent on the N.B.E.R. to maintain its decades-long tradition of care in the detailed assessment of the date of turning points. That is a far more difficult task than I think many commentators understand.”

A fourth committee member, Martin S. Feldstein, also of Harvard, warned in January of the risk of a double-dip recession. “There is a significant risk the economy could run out of steam sometime in 2010,” he said at a meeting of the American Economic Association. Reached on Sunday, Mr. Feldstein declined to elaborate publicly on his views.

Mr. Frankel and Mr. Hall have been quoted as saying that the recession has ended. In the Internet era, those comments generated more buzz than the bureau is accustomed to. Asked why the committee would not just wait, several members cited the public interest and a desire for transparency.

James M. Poterba of M.I.T., who is the president of the national bureau and a committee member, also would not tip his hand. There is no formula for defining a recession, even though it is often casually described as two consecutive quarters of economic contraction. The committee relies on interpretation to determine the beginning or end of one.

The last time it made such a cautious statement was in December 1990, when it said that a recession had most likely begun between June and September but that it could not make a determination until the contraction was sufficiently long and deep; the committee announced four months later that the recession had started in July 1990.

It seems nearly certain that the present recession will end up lasting longer than the 16-month recessions of 1973-75 and 1981-82. They had been the longest downturns since the 43-month period from 1929 to 1933 that was the first phase of the Great Depression.

The committee, created in 1978, has assigned the start and end dates of economic contractions for every business cycle since 1854. It has long emphasized that it looks only backward, and does not make forecasts or predictions.

Louis Uchitelle contributed reporting.

Hmmn…how creepy is it that these ‘clowns’ have taken it upon themselves to, ‘Ministry of Truth’ like, ‘assign’ start and end dates to past economic events?

Perhaps more disturbing is the unrelenting efforts to ‘pigeon hole’ a unique economic event into a preconceived ‘duration’ extrapolated from (largely imaginary) past ‘estimated’ durations…

The original ‘Great Depression’ is still close enough in the rearview mirror to provide a certain degree of confidence in the dating, if not the causes. It seems ‘economists’ have conflicting ‘ideologies’ when it comes to that event…how bizarre is it that the same ideology that brought about the first event is the same one that caused the second, economically speaking?

More disturbing is the sudden admission that ‘Uncle Milty’ (Friedman) suddenly appears to have been ‘dead wrong’ in his assertions that ‘more cash’ would have solved everything…not that this is being admitted ‘widely’…it is ‘politics’ after all.

Naturally good citizen, the ‘smoke’ of political opposition has to come from somewhere and it is infinitely simpler to make baseless assertions when you don’t have to prove your ideas are correct…but woe unto us who have suffered because of this false ideology!

Now is not a good time to be, er, ‘learning’ that pumping out unlimited amounts of cash is essentially identical to making mounds of confetti.

Strictly speaking our economy is 'non-existent' but you won't hear an economist admitting this...and you can only wonder why?

The only thing more disturbing is having/supporting a 'storehouse of wealth' whose value is 'mutable' (it's this today and its that tomorrow.)

So I ask that you step back for a moment and consider that there is essentially zero difference between politics and economics, both are exercises in ‘defending the indefensible’…

Thanks for letting me inside your head,


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