Why good times aren’t around the corner

(10:00PM EST – promoted by Nightprowlkitty)

  It’s easy to take a couple months of charts and declare that the future will continue the present trend. That’s what the Green Shooters/Recovery crowd is doing.

 But when you step back and put things into historical perspective, when you analyze the fundamentals of the economy, then it changes everything. It smooths out all the temporary stimulus created by the federal government that is destined to run out soon.

  This chart from David Rosenberg sums things up quite well.

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 I should note that the chart above doesn’t include everything.

For instance, it fails to mention the conditions in the housing sector.

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 Homebuilders are dead in the water because housing inventory is at record highs. It’s going to take years to work that off, especially since record foreclosures are still in the pipeline adding to inventory.

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 Or the conditions in the credit markets.

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 Loan defaults are still climbing higher, which has made the market for asset-backed securities (ABS) completely dry up.

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 Or the conditions of the wage earners of the nation.

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 Increasingly the wage earner is getting squeezed. This has translated into the disappearance of the middle class consumer.

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 I’m not saying that the Green Shooters/Recovery crowd isn’t providing a needed service. People want to here good news when they are scared and depressed.

  The Onion gives a great example of this from last May.

 Tired of hearing the grim truth about their economic future, Americans demanded that the bald-faced lies resume immediately, particularly whenever politicians feel the need to divulge another terrifying problem with Wall Street, the housing market, or any one of a hundred other ticking time bombs everyone was better off not knowing about.

  In addition, citizens are requesting that the phrase, “It will only get worse before it gets better,” be permanently replaced with, “Things are going great. Enjoy yourselves.”

 “From now on, just tell me the bullshit I want to hear,” Pletcher added. “Tell me my savings are okay, everybody has a job, and we’re No. 1 again. Please, just lie to my face.”

 So you see, when people tell you that the bad times are over and everything will be golden from here on, just remember that the American public demanded it.

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    • gjohnsit on January 6, 2010 at 8:49 pm
  1. You don’t have to impress me with charts.

    Oh wait, that’s the truth.

  2. Sex because I am so good looking and I have lost weight.

    BTW – do these jeans make me look fat?  j/k

    • Edger on January 6, 2010 at 10:22 pm

    and the food court fare will keep you healthy.

  3. Haven’t had a chance to read it yet, time to walk my dog.

  4. here than at the bright orange ball.

    The karma here is soooo much better. Ooooohmmmmm

  5. The US had not passed the trillion mark in 1980, now we’re up to what, a gazillion?  At least for most of us, too much debt eventually gets you in trouble.  

  6. against the rate of female work force participation –

    I’ve seen graphs / charts / data randomly – we all know that the rate of women participating in the job market has skyrocketed in the last 40 years – what has that done to kind of ‘maintain’ household incomes?

    too bad there aren’t living wage calculations for different metrpolitan areas, over the last 4 decades, AND, the %s of people making those above and below those wages

    (by 5k a year increments?)

    without raygun’s bubble, followed by the dot.bomb/realestate bubbles, AND, 2 or more jobs per household – more of us would be living in fascist nirvana – slums?


  7. odious despots, and just move on?

  8. The mortgage crisis doesn’t even begin to flush out until mid-2012, and if anything, just keeps getting worse.

    Obama really needs to get onboard the cramdown wagon now if he wants any chance of keeping the big adjustable rate wave from crashing smack dab on the Democratic Convention.

  9. Second wave of Bilderberg ordered economic depression starts NOW.

    New strain of melt your lungs H1N1 is out and

    the current vaccine doesn’t protect against it.

    Hopium!  I like it!

    Potential US growth industries

    Outsourced pay for prison stay workhouses

    Internet surveillance agents

    Printers for the new globalist currency

    Green Gestapo agents

    Ministry of propaganda writers

    • Xanthe on January 7, 2010 at 4:24 pm

    but today’s entry from Ian WElsh posts to a blog called billyblog which was pretty much written for those of us who are not schooled in economic theory (the way you write).  I googled billyblog and it is written by a professor from Newcastle – Bill Mitchell.  

    The first thing I want to do when I see a chart is run to the refrigerator and eat icecream (if there is more than one chart, I seek out the chocolate topping and whip cream)- but really we have to school ourselves because we are being robbed blind. When we wake up in the alley after being drugged (countless pap from tv entertainment – and the MSM (also entertainment) and robbed (ooops, no portfolio, no house) – we then get it.  Let’s call it “defensive” economics for the little guy.  We have to defend ourselves, as the government sure as heck isn’t doing it.

    Any chance you could (or maybe you have) begin an ABC series on economics.

    I’ve always appreciated your work – on DK and here.


  10. … points from Rosenberg are part of the problem, not part of the solution. The absurdity that barriers to trade were “high and falling” in the 80’s … barriers to trade were falling all through the post WWII, aka “Bretton Woods”, period. What were still high but set to fall in the period AFTER the post-WWII sustained long upswing came to an end were barriers to wealth flows across international borders, and the importance of those barriers dropping is the implied increase in relative economic clout of international and transnational corporations.

    Indeed, the fundamental assumption underlying Rosenberg’s chart is that the definition of good times is a bull market, which itself is more the problem than the solution to the problem.

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