The Economy, In Charts

[jyl]

ISM PMI indicator of US industrial production bottomed at trough similar to severe 1970s and 1980s recessions, and now rising from trough.

[djmcmath]

Originally Posted by 9elf

This is my favourite thread.

Hey, no shame there. I'll click here before I click on the "legs and butts" thread.

[djmcmath]

Originally Posted by jyl

[img]...now rising from trough.

Do you believe that this is real, or just false start? There are several troughs on the chart that spiked momentarily, then dropped back to even lower lows.

[jyl]

I have bet "for real", others may choose to wait until more certainty. Certainty costs money.

Bigger concern might be repeat of early 1980s, which was one recession followed quickly by another, so that the first half of the decade felt like one long recession.

[Porsche-O-Phile]

I have a bad feeling that this recession is just getting started, not even close to a bottom... If anything this recession could very likely just be a "foreshock" to The Big One that's still coming.

There are WAY too many unaddressed issues with our economy. All the efforts I've seen thus far are directed at treating SYMPTOMS, not at killing the underlying disease(s) that cause those symptoms.

I think this one is far from over and once the full effect of all our present debt spending is realized (on top of the causal problems, which are not being addressed), we're going to be in for FAR worse times than we have right now. Honestly I think the depression we're on the precipice of (and yes, I do think that's where we are) would even be worse than the Great Depression, with the very real potential to tear this country apart.

I feel that things will "bounce" for a few months just because of feel-good effects, but since the underlying factors that created this recession are not being addressed (and are getting worse, actually), eventually things might slide back down. If/when they do, I think it would run away very quickly - "China Syndrome" style. It would fall VERY far, VERY fast (since there'd be true "panic" at that point and all the Pollyannaish sentiment in the world by our "leaders" wouldn't stop it). We WILL likely see (for the first time in history) large-scale state/county/city bankruptcies across the country, massive bank failures, etc. in the coming months. The question is whether or not these things will be enough to send things even further out of control and into a runaway "meltdown". If things start to go south from where they are now, I doubt there will be any stopping it until the "real" bottom is reached - and the "real" bottom is going to be really, REALLY ugly. I think the "bottom" that's being created now is simply an illusory "false bottom" that government and big-money banks/investors are trying their damnedest to establish and get into people's heads, lest things go completely out of control and they lose the ship entirely.

No joke - I think there's a real possibility that we could see a 1500 DOW, unemployment over 50%, civil unrest, looting, breakdown of order, civil war, etc. before this one "fixes" itself. It might not be LIKELY, but I definitely think it's possible. If I had to put a percentage on it, I'd say maybe 25% chance of it happening. Probably a 60%-75% chance of at least SOME of the above things happening on some sort of scale. Either way, we are not NEARLY out of this. We sure as hell are not having a "turnaround" in the conventional sense right now. No way. Even if things do start to turn, there are still the twin 900-pound gorillas in the room that nobody's talking about - Social Security insolvency and inflationary pressure on a scale never before seen in the U.S. And that's without even starting to talk about things like trade deficits, the destruction of our manufacturing, etc... B-I-G underlying problems that need to be addressed. And "clean energy" and "green building initiatives" ain't gonna' solve them.

This one has the potential to be a LOT worse than it is right now. A lot worse than most people realize or allow themselves to even think about.

Guns and ammo people. Guns and ammo.

[tabs]

There is a thing called the Stimulus Package that is going to pour money into the economy..Apx 10% of that money has hit the streets...so enjoy the burn while you can...Just when a guy like POP starts ot relax and starts to spend again...the absolute bottom will drop out. Only next time there ain't gona be no printing press to print money for the Chinese will own that press by then.

[turbo6bar]

US population is up around 30M since the beginning of this decade.

[Hebrewhomeboy]

Dow Jones Industrial Average Index Historical Chart
July 2004 to July 2009

[Hebrewhomeboy]

One thing I've noticed - With the exception of march 2009, when DOW dropped into the 6000s, it hasn't really done much of anything since last october. It's pretty much stayed in the low 8000s.

[island911]

[Jim Richards]

Oh, isn't that nice? Glenn's decided to make this a PARF thread.

[island911]

So we have a different group in charge- who cares. Point is, the projections of Roses are generally off to our detriment, whereas projections to our expense are off ....to our detriment.

...and that last graph should really tell you to 'hold on - this is not getting better soon"

[McLovin]

Originally Posted by island911

...and that last graph should really tell you to 'hold on - this is not getting better soon"

Yup. The unemployment number will be all the way off that chart by this Fall.

[jyl]

Initial unemployment claims peaked and are dropping sharply. The rate at which jobs are being lost is declining. This indicator tends to signal the last stages of a recession. It does not mean that the total unemployment rate will drop soon - it will continue rising for some time. Unemployment rate is a lagging indicator. For the unemployed (and even some of the employed) the initial stages of a recovery continues to "feel" like a recession. Especially if the recovery is slow and fitful.



Small businesses are turning more optimistic about the near/medium-term future, while current conditions remain very difficult.



Retailers have aggressively cut inventories. This also tends to signal the last stages of a recession. Wholesaler inventories remain high, but are starting to come down.



Industrial orders bottomed and are recovering in the US. Taking Germany as a proxy for Europe, the bottom-recovery pattern is forming but less distinct. Anecdotally, companies continue to call Europe their weakest region.



Consumer sentiment and spending are not getting worse. Also not getting better. Yet.



A closer look at manufacturing new orders and PMI. The "ending phase of recession" pattern is apparent. On the cautionary side, look at the early 1980s when one recession was closely followed by another.

[jyl]

Arrgh, why can't I post a decent pic. Sorry I know the above charts are pretty useless due to being so small. I'm going to start my weekend, not going to sit here futzing around w/ MS Paint.

[jyl]

explanation:

blue line is net pct of banks tightening C&I loan standards for large borrowers. At one point in early 2009, net 80% were tightening. Now net 30% are tightening.

red line is YOY change in total employment, lagged 3 qtrs,

loan standards leads employment by appx 3 qtrs. loan standards tend to be a leading indicator.

[jyl]

Initial unemployment claims.

[jyl]

Now here is something interesting.



The red marks show the depth of past recessions (x-axis) and the strength of the recovery (y-axis). A trendline through the scattergram would be diagonal from lower-left to upper-right. This indicates a relationship - deeper recessions tend to be followed by stronger recoveries.

The blue marks show consensus forecasts for the depth of this recession and the strength of the recovery. The consensus forecast is that this recession will be exceptionally deep (well, we already know that) and then followed by a weak recovery.



This shows the depth of past recessions and the strength of the recoveries, similar to the previous chart. But here the blue marks show the consensus forecast at the time, and the red marks show what actually happened.

The chart is incomplete. But it appears that the consensus typically forecasts recoveries at a 2% to 4% pace, no matter what actually ends up happening. The consensus of economists appears to have a narrow range that they feel comfortable forecasting, and that forecast has been equal to or lower than the actual. In other words, the consensus of economists errs on the conservative, cautious side.

(No, I don't know why there are no blue marks for some of the recessions.)

[jyl]

ISM manufacturing index is above 50 and new orders component has jumped to high levels. Appx 30% of jump likely due to autos.

[Pazuzu]

.


saw this one the other day, and thought of this thread.