Skip to comments.John Hussman: It's Official, The Data Says Another Recession Is Coming
Posted on 06/28/2010 10:47:11 AM PDT by blam
John Hussman: It's Official, The Data Says Another Recession Is Coming
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.
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.
(Excerpt) Read more at businessinsider.com ...
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...."
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. :)
“a double-dip is coming.”....
Thanks to the Double-Dip in the White House!...
Its clear from the chart that we need more debt, said Mr. Skittles.
Paul Krugman takes it where the sun never shines.
Batten down the hatches! Taxes a plenty next year.
Bush’s fault, obviously.
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.
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.
This is unexpected...
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...
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.
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.
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).
” He is spending us into oblivion. He has no intent of us ever recovering. He is sticking a knife in this nations back.”
Cloward-Piven, word for word.
Yes, it does seem as if doesn’t it.
Double dip calls for special action. It’s time to blame Bush AND Reagan!
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 read your post & then checked my penny stock. Yup, it’s down.
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.
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.
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.
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