If things don't stabilize by June, I'm heading to the mountains.

Lets see- of the 7 past recessions, how many were caused by a collapse of the housing market which precipitated a collapse of the vastly overextended derivative market, which led many of the major financial institutions to collapse or severely shrink? None of them? Sorry if I don't quite buy into the rosy picture these guys are painting.

Sometime mid-year,

Of 2011......

Dinki: Lets see- of the 7 past recessions, how many were caused by a collapse of the housing market which precipitated a collapse of the vastly overextended derivative market, which led many of the major financial institutions to collapse or severely shrink? None of them? Sorry if I don't quite buy into the rosy picture these guys are painting.

But the answer came from a computer! It must be true!!

Dinki: Lets see- of the 7 past recessions, how many were caused by a collapse of the housing market which precipitated a collapse of the vastly overextended derivative market, which led many of the major financial institutions to collapse or severely shrink?

Four?

All previous recessions adhered to the 10 year cycle (1960, 1970, 1980 etc.).
This one is different. I have never seen a recession like this one and I have been working since the late 60's.
I hope that they are correct but feel that the rest of this year is going to be very hard. I expect the economy to start picking up next spring and hope that I can hang on until then. If it doesn't pick up by then, we will be in a full blown depression and all bets are off.

It's always a recession when white men are out of work.
And any other time things are just peachy.

Lieutenant Rad: Sometime mid-year,

Of 2011 2013......

FTFY

It's been running for more than a year

Horsepuckey. Smoke blown straight up our a$$e$.
Plant vegetables, buy guns, and hold on.

/Only 1/2 kidding.

Dinki: Lets see- of the 7 past recessions, how many were caused by a collapse of the housing market which precipitated a collapse of the vastly overextended derivative market, which led many of the major financial institutions to collapse or severely shrink? None of them? Sorry if I don't quite buy into the rosy picture these guys are painting.

This, which is why all the Austrian school Paultards calling to ride it out normally have their heads especially far up their asses.

Oh great. Now what the hell am I going to do with all this Spam?

With Treasury RATES as low as they are now, the Treasury rate SPREAD may not be accurate enough to predict anything successfully.

euphonial: Horsepuckey. Smoke blown straight up our a$$e$.
Plant vegetables, buy guns, and hold on.

/Only 1/2 kidding.

Already got the guns. Planting 1/2 acre of poatoes and onions next to the goat barn.

What's that? I can't hear you over the sound of Ben Bernanke screaming as I poke him with a rusty spork.

Dinki: Lets see- of the 7 past recessions, how many were caused by a collapse of the housing market which precipitated a collapse of the vastly overextended derivative market, which led many of the major financial institutions to collapse or severely shrink? None of them? Sorry if I don't quite buy into the rosy picture these guys are painting.

the recessions are caused for different reasons sure, but the reactions are all the same...after the recession is over legislation is put into place to prevent that particular event causing another one, however economics 101 will tell you, as the law of gravity tells you "what comes up must also go down..."

Remember, just because the recession ends, it doesn't mean unemployment has gotten better. It means the GDP growth was positive. 0.00001% counts as a positive GDP growth. The jobs lost in the recession won't be coming back completely until 2013 at the earliest.

Tr0mBoNe: Dinki: Lets see- of the 7 past recessions, how many were caused by a collapse of the housing market which precipitated a collapse of the vastly overextended derivative market, which led many of the major financial institutions to collapse or severely shrink? None of them? Sorry if I don't quite buy into the rosy picture these guys are painting.

But the answer came from a computer! It must be true!!

I see the "BCS rankings" computer is having trouble finding work in the off season too...

Maybe I should be growing more than pepper plants this year. I'm off to the seed store.

Dinki: Lets see- of the 7 past recessions, how many were caused by a collapse of the housing market which precipitated a collapse of the vastly overextended derivative market, which led many of the major financial institutions to collapse or severely shrink? None of them? Sorry if I don't quite buy into the rosy picture these guys are painting.

Well, the 1929 crash was... DNRTFA so I don't know whether that was included. A fine example for looking at over-extended derivatives followed by credit crashes comes to you from Mexico. The 1984 crash is particularly interesting. This is one of the reasons I am not as terrified about the treasury turning the printing presses to full speed at the moment. A drop in the dollar would have significant long-term benefits and is long overdue for what should be by all rights an industrial economy. Of course Mexico couldn't keep it up due to significant governance problems, but that is for a different thread. What makes it a little more difficult is that despite the best efforts of the doom-and-gloomers, the dollar can't seem to help but gain strength because foreigners continue to seek "safety" in T-Bills.

Also, the current 'in-vogue' attitude that we're doomed and it's pointless to have any sort of optimism that has become pervasive across many of the forms of circulated media is not only tiresome but counterproductive. Realism in economics is one thing but pessimism helps no-one except Lou Dobbs and the local gun shop. Any legit equation for calculating growth factors in very significantly expectations for the future so if all of these ratings-whore asshats want to scare viewers into watching them, they're doing their part to lower expectations and by extension lower the possibility of growth.

I don't advocate by any means any sort of institutionally-imposed "optimism" but the outright partisan fear-mongering and sabotage is pathetic, tiresome, unhelpful and dare I say it, unpatriotic? Crying and screaming about a hypothetical panic only serves to create more panic. As they say, the truth is scary enough, it does not need to be embellished.

Something unprecedented will happen in the next year or two that will extend this recession, or possible lead to a depression. The timing is aweful. We have record debt, ZERO savings, bankrupt pension funds across state and private sectors, and two wars.

All of the things we spent the last decade's wealth on are zero-return investments, except for maybe some McMansions laying around. Maybe if we can secure oil riches from Iraq, to the tune of Saudi Arabia's current output and send the proceeds back to the U.S., but I don't even think that was the plan.

We just don't have the energy and mineral resources that we had two decades ago, let alone five or six decades ago. The government has been lying about the CPI, inflation, etc. And now it is time we realize we have been in a decade-long recession, on that we tried to stave off with the housing bubble.

NewportBarGuy: If things don't stabilize by June, I'm heading to the mountains.

...with Busch?

/beats Bush, I guess....

What if our economy is up right now, and the past spikes were just flukes? What if we're at the peak and getting ready for the real plunge?

The "TED" spread is no longer a reliable indicator of future economic health for all of the reasons listed above. We are teetering on the edge of a giant castastrofark right now. While the probability is small, there is chance the US could default on it's own debt OR we're going to start printing 1 million dollar bills soon. While both scenarios are unlikely they could happen....gonna have a bad time...

Here's what's going to happen:

Within the next 18 months or so, things are going to get markedly better. The Republicans, rather than admit the validity of Keynesian economics, will claim that the progress is an indication that Dubya's tax cuts finally kicked in. They will further assert that the recovery would have happened even faster if it hadn't been for Obama's stupid socialist porked-out stimulus plan.

And the knuckle-draggers on the Right will buy it hook, line, and sinker.

/Scoff if you want, but pay attention.
//It will happen.

We'll have a head-fake recovery and then go lower. 2011 will probably be the bottom.

vudukungfu - That's what I'm talkin' about! We started the veggie seeds this weekend. (Too early to plant in PA.)

For America.

Yeah, this shiat is too depressing to dwell on. Let's talk about gardening. God I love shallots.

They're right - end of the recession in 2009 is very likely. The thing is, end of the recession != back to normal. At that point there will be a huge output gap still, that will take years to fill. And employment is a lagging indicator; it will still be rising after the recession technically ends.

abnormalia: What if our economy is up right now, and the past spikes were just flukes? What if we're at the peak and getting ready for the real plunge?

This is more likely than you'd think. All natural resources are becoming more scare, and consequently, more expensive to extract. The "drill baby drill" crowd doesn't get that off-shore drilling rigs and the pittance of oil left in Alaska. At the same time, our demand is rising to ever-increasing levels.

Bottom line--the economy of the late 20th century, the vast wealth realized between about 1940 and 1990, is really just an artifact of cheap, free energy in petroleum and our ability to exponentially increase the rate at which we extract it.

This is the economic reality that will come crashing down around us in the next 2-6 years.

Isn't a recession merely defined as a drop of GDP in consecutive quarters? So if GDP drops 15% and 20% then increases by 1% for two quarters, the recession is over.

A recession ending in itself is irrelevant. The depth of the recession is very relevant.

Incontinent_dog_and_monkey_rodeo: We'll have a head-fake recovery and then go lower. 2011 will probably be the bottom.

Maybe this.

The number of subprime-mortgage interest-rate resets is going to plummet in 2009, just because fewer are scheduled to reset. This is going to make things look better in the short term (maybe fewer people losing their homes), like there's a light at the end of the tunnel. However, there's plenty of mortgage-rate resets left starting in 2010 (option-ARM and Alt-A mortgages) and that means plenty more people are going to lose their homes then. Which means more big problems for the economy over the next few years.



/is linked hot like the economy is cold

markfara: The Republicans, rather than admit the validity of Keynesian economics, will claim that the progress is an indication that Dubya's tax cuts finally kicked in.

I predict, politically, that Regan will be elevated from Sainthood to Godhood and the political battle of 2012 will be one of sustainability and growth management, and one of a return to the glory days of wanton, irresponsible consumption and war.

The democratic solution, which is obviously one of sustainability, will mandate incredible amounts of government intervention and control over people's private consumption habits. Luxery taxes will have to be expanded, etc. This will not be popular, and will be a "bummer" and the Republicans will win by promising to return to a time that is impossible to return to. Democrats will become the scapegoats when it becomes clear we can't consume at 1980's levels. Again, we will try to make up the difference the same way Germany did in the 1930's. Expansion and resource grabbing across the globe for the sake of maintaining a status if living.

Crown_of_Shoes: abnormalia: What if our economy is up right now, and the past spikes were just flukes? What if we're at the peak and getting ready for the real plunge?

This is the economic reality that will come crashing down around us in the next 2-6 years.

I'm just curious, do you also believe in the population bomb? Also, note that "peak oil" was has supposedly been reached in the 50's 60's, 70's, 80's and 90's. I'm not saying that there are not significant natural resource concerns, there certainly are, but I do have to wonder where the certainty in your time frame comes from.

I'm going out for a jog so I'm probably going to miss the rest of this thread once it goes atomic flame-war.

/26 minutes, etc.

I'm betting the upcoming civil war in Mexico will destabilize the United States enough to make it collapse.

broomballwilson: Isn't a recession merely defined as a drop of GDP in consecutive quarters? So if GDP drops 15% and 20% then increases by 1% for two quarters, the recession is over.

A recession ending in itself is irrelevant. The depth of the recession is very relevant.

True. I'll also add that the way we calculate GDP has been warped and distended by many political administrations over the past several decades.

For example,


One of the reasons I say we are in a decade long recession. Many reasons why the numbers have been fudged, read about them here (new window).

markfara: Here's what's going to happen:

Within the next 18 months or so, things are going to get markedly better. The Republicans, rather than admit the validity of Keynesian economics, will claim that the progress is an indication that Dubya's tax cuts finally kicked in. They will further assert that the recovery would have happened even faster if it hadn't been for Obama's stupid socialist porked-out stimulus plan.

And the knuckle-draggers on the Right will buy it hook, line, and sinker.

/Scoff if you want, but pay attention.
//It will happen.

And if it doesn't recover before the next election, they'll say that the atheist/empty-suit/muslim/socialist/facist's stupid socialist porked-out stimulus plan destroyed the effects of Dubya's tax cuts.

euphonial: Horsepuckey. Smoke blown straight up our a$$e$.
Plant vegetables, buy guns, and hold on.

/Only 1/2 kidding.

With a gun-grabbing Congress it's:

Plant guns and plant vegetables.

Tr0mBoNe: Dinki: Lets see- of the 7 past recessions, how many were caused by a collapse of the housing market which precipitated a collapse of the vastly overextended derivative market, which led many of the major financial institutions to collapse or severely shrink? None of them? Sorry if I don't quite buy into the rosy picture these guys are painting.

But the answer came from a computer! It must be true!!

Computer models are more accurate than human models for just about everything (e.g., weather predictions, "picking" stocks, predicting future dangerousness (of criminals), predicting recidivism, predicting drug relapse, predicting how long someone will live with cancer). Of course, no one wants to think that so I'll jump in OMG COMPUTERS ARE NOT NEARLY AS GOOD AS WHAT RUSH OR OBAMA SAY!!!!

/believes the computer is probably very close because, well, they usually are

I predict the economy won't turn around till 12/21/12

Crown_of_Shoes: The democratic solution, which is obviously one of sustainability, will mandate incredible amounts of government intervention and control over people's private consumption habits. Luxery taxes will have to be expanded, etc. This will not be popular, and will be a "bummer" and the Republicans will win by promising to return to a time that is impossible to return to. Democrats will become the scapegoats when it becomes clear we can't consume at 1980's levels.

If you're saying that it's going to be 1980 all over again, I'm going to find that shoebox with my coke, 'ludes, and Blondie cassettes.

006andahalf: Crown_of_Shoes: abnormalia: What if our economy is up right now, and the past spikes were just flukes? What if we're at the peak and getting ready for the real plunge?

This is the economic reality that will come crashing down around us in the next 2-6 years.

I'm just curious, do you also believe in the population bomb? Also, note that "peak oil" was has supposedly been reached in the 50's 60's, 70's, 80's and 90's. I'm not saying that there are not significant natural resource concerns, there certainly are, but I do have to wonder where the certainty in your time frame comes from.

Don't bother - my time at fark has taught me quite a few things about about economic and political threads:

1) There are those that never worry and their political side is never wrong...
2) There are those that always worry and the other political side is never right...
3) Then there are those that wallow in the thought of misery like a pig in slop - the world is always a day away from total chaos and anarchy to them - and they will happily tell you why.

In all groups there are people who troll as if they were a part of these groups.

Then there are those who actually believe it but their real life behavior belies that fact. I doubt there are more than a handful of farkers posting from some mountain cave stocked with ammo and canned food, overlooking a private valley planted with vegetables, with a waterwheel and windmill providing limited but free electical power.

I'm becoming a "Financial Buddhist." There is no such thing as money. It is an illusion.

That's the news I've been waiting for. Now I am going to buy a house that's WAYYY out of my price range.

tonesskin: /believes the computer is probably very close because, well, they usually are

Computers are only as smart as the software developer and scientists who use them.

In the "closer look" the trend is up in 01 and the trend is down in 08. You could not find a more discrepant prediction.

IMO economists just give each other BJs. Not that there is anything wrong with that unless you include the fact that the Fed increased interest rates on top of crude oil price hikes to start the recession.

Dumb-as-a-butt Face: That's the news I've been waiting for. Now I am going to buy a house that's WAYYY out of my price range.

Just tell the federal government ahead of time and they will negotiate a loan for you.

006andahalf: Crown_of_Shoes: abnormalia: What if our economy is up right now, and the past spikes were just flukes? What if we're at the peak and getting ready for the real plunge?

This is the economic reality that will come crashing down around us in the next 2-6 years.

I'm just curious, do you also believe in the population bomb? Also, note that "peak oil" was has supposedly been reached in the 50's 60's, 70's, 80's and 90's. I'm not saying that there are not significant natural resource concerns, there certainly are, but I do have to wonder where the certainty in your time frame comes from.

Peak oil in the US was in fact reached in the 70's. I don't recall anyone claiming it would hit world-wide until well into the middle of the 21st century. I have been reading that since the early 90's when I was in college.

I could argue that we are experiencing peak right now, but I am prudent enough to concede that many economic factors can be responsible for this, and can even reverse a peak over a few decades.

Peak oil (and peak copper, peak salmon, you name it) is but one of several self-limiting economic realities facing the world today. More immediate, however, is the necessity we have created for broad and unprecedented economic growth if we are recover from the debt incurred over the past 10 years. Or even the past 2 years, given the bail-out of hopelessly failed banking institutions. We are counting on the taxpayer to recover this wealth. We have said, "oops! It wasn't in CDO's, nope, nothing there."

Second, as the baby-boomers go into retirement, we don't have a large enough replacement population to support them, let alone liquidate their vast financial and real estate assets. They just watched at least a third of their wealth get wiped out.

So I think those two factors, and maybe some limitations on growth of energy and natural resources, will be the next big "crises" coincidental with this downturn.

What will turn bad to worse, however, is the fact that there is ZERO political will (aside from Ron Paul) to do something about our economic models and consumption habits.