Merrill Lynch: Recession began in January, won't end soon
Merrill Lynch cut me off from receiving its macroeconomic analyses, probably because I posted frequent and what the firm regarded as too-extensive excerpts of material it mainly wanted to reserve for clients. But the pieces were hard to resist -- provocative, intelligent and frequently right on the money. Fortunately, market guru John Mauldin has sent out Dave Rosenberg's latest to his email subscribers, and it's a corker. Rosenberg is Merrill's chief North American economist.
He thinks the recession started in January and isn't nearly over. Of course, the radical liberal capitalists at Merrill Lynch are probably making all this up to throw the election to Obama! (If you're mainstream media, mentions of recession bring accusations you're an Obama shill.) A sampling from Rosenberg's piece:
My sense is that we probably aren't even past the halfway point yet of this recession, the credit losses or the house price deflation. Looking at whether equities may have bottomed or not on an intermediate basis, maybe the recent action to the negative side was an important inflection. In terms of what I do, which is trying to tie the macro into the markets, I have a very tough time believing that we have reached anything close to a fundamental low, either in the S&P 500 or in the long-bond yield, for that matter.I am convinced that when the NBER does make the final proclamation, it will tell us a that recession officially began in January. Of course, to any market person, this would make perfect sense, because of when the S&P 500 peaked. It did a double top into October, right when it usually does, before a recession begins.
Comments
it's not that mentions of a possible recession makes you an Obama shill, it's the unrelenting focus by the MSM on negative news that suggests the bias.
for example:
Iraq! Iraq!! IRAQ!!!
good news in Iraq: *crickets*
oil prices! Oil Prices!! OIL PRICES!!!
25% drop in oil prices: 'well, moving on...'
slow economy, struggling economy, RECESSION!!!!
it's not an official recession, mind you, but any fool can see that, really, this must be, has to be, a recession. Get with it people!!
How long have you been talking down this economy? Though the subjects may change, I trust that you will stay focused on proving the horrendous condition of our country + economy. At least through 01.20.09, according to those bumper stickers I have seen.
Posted by: kvnmnnng | August 19, 2008 11:44 AM
What a dumb comment by kvnmnnng-- I'm a registered Republican FWIW and a veteran, but even I'll admit that George W. Bush has screwed up royally on practically every front. Look, Iraq is a disaster no matter what tint of rose-colored glasses you wear. Those of us who were in Vietnam know about how useful these periodic "reductions in violence" are-- absolutely, positively useless. The only reason Iraq looks momentarily better is that things were so atrociously, intolerably awful 6 months ago-- it would have been almost impossible for them to get worse. So then we decided to pay the insurgents through the nose, while the guerrillas take a breather and rearm themselves, using US-supplied weaponry of course.
In the meantime, the underlying political miasma festers (Kirkuk, no provincial elections, no agreement on sharing of natural resource proceeds, militias still armed to the teeth, Iran still with big hand in Iraq), so that soon enough, unsurprisingly, the violence picks up again and US soldiers are in the crosshairs. Already in August, American soldiers are suffering casualties at higher rates. And in the meantime, we continue to utter 5 o'clock follies while the situation continues to get worse, until the USA, years from now and with even more tens of thousands of casualties, limps home from Iraq in abject, humiliating defeat, just like in Vietnam. Just as will occur in Afghanistan, the war that was really was worth fighting until we got distracted in Iraq.
And yes, this is a recession by any measure. Prices for even a loaf of bread are so sky-high that my relatives can hardly feed their kids. Our savings are being eaten away by massive inflation, but the GDP numbers are (for the moment) artificially made higher by deliberately reducing the GDP deflator and underestimating recession, using some cooked-up core inflation number rather than the real inflation that everybody is facing. Unemployment is systematically underestimated by counting only people actively getting unemployment benefits, everyone else is kicked to the curb and left off the rolls. And foreclosures continue to pick up pace.
You can only use these Enron-style number-fudging techniques for so long, before the whole ridiculous Wizard-of-Oz schtick breaks down and people see the disaster behind the curtain. Many of us have been in recessions before, and we know one when we see one. THIS IS A RECESSION!
Yet we continue to waste trillions of dollars in stupid, useless wars abroad? We bait and antagonize Russia, invade and split off Kosovo-- for what? Just to provoke another gratuitous war and still more military spending? We're so indebted to the Chinese and the Saudis that they're getting control of half the country at dirt-cheap prices as our banks fail and our infrastructure crumbles. Even in the Olympics we're being humiliated-- China with 44 gold medals, USA with 26. We'd rather languish on the couch and watch American Idol rather than tough it out and face real problems.
It's gotten so bad that three of my nieces and nephews have moved abroad permanently. My PhD engineer nephew, who now has a wife and 3 kids, took a German course 2 years ago and has recently moved to Germany, raising his kids there. Why? Because outsourcing to India has destroyed the entire tech infrastructure in the USA, with this recession only making things worse. Even my own son now plans on moving to Denmark or the Netherlands if he can learn German and a bit of the local language.
FWIW, I don't particularly like either candidate in 2008, I think they're both basically feeding at the same corporate lobbyist trough that has corrupted George W. Bush and his neocon warmongering Republicans over the past 8 years. But my inclination is toward Barack Obama, if for nothing else to get rid of the scoundrels in our current government who have essentially become kleptocrats feeding off taxpayer money even as they drive us even deeper into massive debt. We need some massive improvements to the current den of corruption and manifest incompetence.
Posted by: Pradan | August 20, 2008 3:37 AM
Great comment Pradan!
Posted by: Jack Ross | August 20, 2008 8:34 AM