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John Hussman: It's Official, The Data Says Another Recession Is Coming
The Business Insider ^ | 6-28-2010 | Joe Weisenthal

Posted on 06/28/2010 10:47:11 AM PDT by blam

John Hussman: It's Official, The Data Says Another Recession Is Coming

Joe Weisenthal
Jun. 28, 2010, 12:48 PM

Fund manager John Hussman (via PragCap), who's been bearish for awhile, says it's now clear that a double-dip is coming.

Based on evidence that has always and only been observed during or immediately prior to U.S. recessions, the U.S. economy appears headed into a second leg of an unusually challenging downturn.

A few weeks ago, I noted that our recession warning composite was on the brink of a signal that has always and only occurred during or immediately prior to U.S. recessions, the last signal being the warning I reported in the November 12, 2007 weekly comment Expecting A Recession. While the set of criteria I noted then would still require a decline in the ISM Purchasing Managers Index to 54 or less to complete a recession warning, what prompts my immediate concern is that the growth rate of the ECRI Weekly Leading Index has now declined to -6.9%. The WLI growth rate has historically demonstrated a strong correlation with the ISM Purchasing Managers Index, with the correlation being highest at a lead time of 13 weeks.

Image: Hussman

Taking the growth rate of the WLI as a single indicator, the only instance when a level of -6.9% was not associated with an actual recession was a single observation in 1988. But as I've long noted, recession evidence is best taken as a syndrome of multiple conditions, including the behavior of the yield curve, credit spreads, stock prices, and employment growth. Given that the WLI growth rate leads the PMI by about 13 weeks, I substituted the WLI growth rate for the PMI criterion in condition 4 of our recession warning composite.

[snip]

(Excerpt) Read more at businessinsider.com ...


TOPICS: News/Current Events
KEYWORDS: depression; doommonger; economy; hussman; recession

1 posted on 06/28/2010 10:47:14 AM PDT by blam
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To: blam
Paul Krugman Throws In The Towel, Says We're Headed For Another Depression
2 posted on 06/28/2010 10:49:35 AM PDT by blam
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To: blam
Paul Krugman Throws In The Towel, Says We're Headed For Another Depression

KRUGMAN:"WAAAAAaaaaa!!! Keep spending money....WAAAAaaaa...That's it, if you don't keep spending money I'm going to go home and write an article that tells of the coming depression...."

3 posted on 06/28/2010 10:52:26 AM PDT by frogjerk (I believe in unicorns, fairies and pro-life Democrats.)
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To: blam

Thank you for posting. I’ve been a fan of John Hussman for many years. My idea of a good time, sadly, is reading this lengthy piece. :)


4 posted on 06/28/2010 10:52:31 AM PDT by SupplySider
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To: blam

“a double-dip is coming.”....

Thanks to the Double-Dip in the White House!...


5 posted on 06/28/2010 10:52:44 AM PDT by AngelesCrestHighway
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To: blam

Its clear from the chart that we need more debt, said Mr. Skittles.


6 posted on 06/28/2010 10:53:26 AM PDT by equalitybeforethelaw
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To: blam

Paul Krugman takes it where the sun never shines.


7 posted on 06/28/2010 10:54:24 AM PDT by Anti-Bubba182
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To: blam
"Lordy, lordy I didn't E X P E C T that?
8 posted on 06/28/2010 10:56:29 AM PDT by norraad ("What light!">Blues Brothers)
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To: AngelesCrestHighway
Double Dip? We're Already In Recession
9 posted on 06/28/2010 10:56:29 AM PDT by blam
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To: blam

Batten down the hatches! Taxes a plenty next year.


10 posted on 06/28/2010 10:59:32 AM PDT by Huskrrrr
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To: blam

Bush’s fault, obviously.


11 posted on 06/28/2010 11:00:51 AM PDT by denydenydeny ("Why should I feed pirates?"--Russian officer off Somalia)
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To: blam
Obama, the king of the shave-ice, double-dip. Bammi sucks the straw to get the syrup at the bottom while America financially burns. Move over, Nero.
12 posted on 06/28/2010 11:01:24 AM PDT by JPG (Mr. Gore, or is it Mr. Stone or Mr. Woody? Whatever, you're under arrest.)
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To: blam

Methinks we’ve been in a recession a lot longer than the White House wants to admit.

Of course, it’s all Bush’s fault.


13 posted on 06/28/2010 11:01:52 AM PDT by fatnotlazy
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To: blam

A lot of unemployed people would be surprised to discover that we’ve bubbled out of the recession we are dipping back into, and soon they will have more company to share their grief.


14 posted on 06/28/2010 11:01:52 AM PDT by pallis
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To: blam
Krugman is exactly where he belongs, in an ivory palace (Princeton- the elitist types care a lot about these status names), sheltered from reality and living in a theoretical bubble. He's one of those academic types that does well writing books, giving lectures and consultation........ In reality he contradicts himself...... pushes a political paradigm........ He's one of those that does well in academia. What he says can be boiled down to a few sentences and has little value to those dealing with the realities in business etc. As a former PM for Perot Systems, what value did Krugman have to me? None.
15 posted on 06/28/2010 11:03:17 AM PDT by Red6 (Where's my stuff? I want some more stuff too Mr. President!)
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To: SupplySider

later


16 posted on 06/28/2010 11:03:50 AM PDT by arkady_renko
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To: blam
The Bearish Chart Of The Day Is The Breakout Of The 10-Year (Flight To Safety)


17 posted on 06/28/2010 11:06:11 AM PDT by blam
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To: blam

This is unexpected...

:-(


18 posted on 06/28/2010 11:07:35 AM PDT by SteveH (First they ignore you. Then they laugh at you. Then they fight you. Then you win.)
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To: blam
"People will have to make money the old-fashioned way and earrrrrn it."


19 posted on 06/28/2010 11:10:27 AM PDT by Lancey Howard
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To: blam
It's Official: We Never Left the First One


Frowning takes 68 muscles.
Smiling takes 6.
Pulling this trigger takes 2.
I'm lazy.

20 posted on 06/28/2010 11:12:59 AM PDT by The Comedian (Evil can only succeed if good men don't point at it and laugh.)
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To: blam

I haven’t bought the idea we ever moved out of the recession, so this is B. S. to me.

What’s funny about it though, is that Il Douche’ Jr. actually set himself up for this.

Declaring the recession ended, made it possible for him to be guilty of the recession returning.

Wear it with pride Il Douche’ Jr. Embrace it. Own it. Drown in it...


21 posted on 06/28/2010 11:14:10 AM PDT by DoughtyOne (06/15/2010 Obama's Shame-Wow address...)
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To: DoughtyOne; The Comedian

I have said this for 8 months, and I’ll repeat it. We cannot move out of recession because the Obamunist has us cornered on every economic front.


22 posted on 06/28/2010 11:19:14 AM PDT by stephenjohnbanker (Support our Troops, and vote out the RINOS!)
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To: stephenjohnbanker

I’ll go further. This debt he is building up is being built up for one reason. He is spending us into oblivion. He has no intent of us ever recovering. He is sticking a knife in this nation’s back.


23 posted on 06/28/2010 11:24:21 AM PDT by DoughtyOne (06/15/2010 Obama's Shame-Wow address...)
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To: blam

I believe that if the Republicans triumph in November, the economy will receive an immediate kick-start, as businesspeople realize that the anti-business climate in DC is coming to an end. That could save us from another recession (though frankly I never noticed the first one ending, no matter what anybody at Business Week said. None of the people who were proclaiming that the recession was over lost their jobs, one notices).


24 posted on 06/28/2010 11:27:43 AM PDT by ottbmare (I could agree wth you, but then we'd both be wrong.)
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To: DoughtyOne

” He is spending us into oblivion. He has no intent of us ever recovering. He is sticking a knife in this nation’s back.”

Cloward-Piven, word for word.


25 posted on 06/28/2010 11:31:55 AM PDT by stephenjohnbanker (Support our Troops, and vote out the RINOS!)
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To: stephenjohnbanker

Yes, it does seem as if doesn’t it.


26 posted on 06/28/2010 11:36:52 AM PDT by DoughtyOne (06/15/2010 Obama's Shame-Wow address...)
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To: denydenydeny

Double dip calls for special action. It’s time to blame Bush AND Reagan!


27 posted on 06/28/2010 11:36:52 AM PDT by The Brush
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To: blam

AKA “double dip” inflation and then hyper inflation. Bread=$8.00 a loaf etc. Exactly as planned by the kenyan and his screaming gaggle of government hacks.


28 posted on 06/28/2010 11:39:07 AM PDT by albie
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To: blam

I read your post & then checked my penny stock. Yup, it’s down.


29 posted on 06/28/2010 11:39:52 AM PDT by Cold Heart
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To: blam

I can say that the rumor mill at the Fortune 500 company my wife works for has Layoff/RIF coming real soon. Lot’s of anxiety building up.


30 posted on 06/28/2010 11:53:21 AM PDT by The Working Man
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To: stephenjohnbanker

This is only one possibility, although a very real one.

The other real possibility is that Obama and team are trying to force currency debasement to inflate hard to prevent deflation. I’m not saying it will work, just that this is as possible as the Cloward-Piven possibility.

Knowing Obama, I would give Cloward-Piven a 51% vs 49% for inflation.


31 posted on 06/28/2010 12:02:11 PM PDT by Freedom_Is_Not_Free (California Bankruptcy in 4... 3... 2...)
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To: albie
AKA “double dip” inflation and then hyper inflation. Bread=$8.00 a loaf etc. Exactly as planned by the kenyan and his screaming gaggle of government hacks.

I think we're looking at something that has never really been seen before, deflation and hyperinflation at the same time!

How can this be, you ask? Simple: staples like bread skyrocket in price, while capital items like house prices fall off a cliff.

Just like before Jimmi Carter nobody thought it was possible to have both high unemployment and high inflation, we're going to learn that it's possible to be in an environment where there is simultaneously hyperinflation as well as massive deflation.

And this will come about precisely because of the policies of this administration. They are going to choke off all forms of credit with their regulations, thus killing the purchase of any big ticket item like a house, while at the same time pushing up the cost of basic goods through massive borrowing and spending that will lead to hyperinflation as foreign countries demand high interest rates for floating our burgeoning debt.

It took Jimmy Cart #1 to prove you could have both inflation and unemployment, and now Jimmy Carter #2 (Obama) will rewrite the economics books yet again! That's change nobody could have believed in.

32 posted on 06/28/2010 12:26:43 PM PDT by drangundsturm
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To: The Brush
"Double dip calls for special action. It’s time to blame Bush AND Reagan!"

Reminder, The Deficit You're Freaking Out About Is Bush's Fault

33 posted on 06/28/2010 2:19:32 PM PDT by blam
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