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Saturday, September 17, 2022

The recession the media ignores

GDP by year.

We are in the 9th month of a recession that is unusual in that few in the media dare to call it a recession.

The media feigns ignorance. The only time the R word appears is when the business news media says we could fall into a recession.

CNBC said in July, "U.S. recession looks likely — and there are 3 ways the economy could get hit, analyst says."

Could? 

Forbes said in July, "U.S. Will Fall Into Recession This Year As 'Worrisome' Forces Grow, Bank Of America Warns."

We already were in a recession, which is defined as six consecutive months of a contraction of the economy.

Now the media is redefining it as a contraction of nine months -- or more.

CFO Dive said in August, "The U.S. economy probably will not grow this quarter and, after more weakening, may fall into a brief recession by early next year, the Conference Board said Thursday, citing its Leading Economic Index."

So even after three quarters of contraction, the media will not call it a recession.

How different it was when President Trump was president. The National Bureau of Economic Research couldn't wait to declare a recession after only five months.

Usually NBER -- called by the press the official arbiter of recessions -- waits a year before making such a pronouncement. The press claims it is nonpartisan and non-government, but it receives federal funding and is based in Cambridge, Massachusetts. It will wait until well after the midterm elections to state the obvious.

Bloomberg won't state the obvious.

The sorta news agency said today, "It’s hard to categorize the US economy these days. Inflation remains quite high, retail sales are moderating but unemployment is at historic lows. The Federal Reserve is stuck navigating these crosscurrents as it attempts to squeeze demand while avoiding recession. 

"Indeed, policymakers are poised for another aggressive hike next week, and where the tightening will end is anyone’s guess. Bridgewater’s Ray Dalio argues inflation may eventually force rates into the 4.5%-6% range, and with that trigger a 20% plunge in equity prices. 

"The Fed’s moves have been reverberating the world over, with officials in Asia pushing back against a surging dollar in a bid to stem losses to their currencies. FedEx flagged weakness in Asia and challenges in Europe as it pulled its prior outlook on worsening business conditions—a dark sign for the global economy."

Avoid a recession?

As Madge the Manicurist said 41 years ago, "You're soaking in it."

Equity prices already fell about 20% this year. It is a bull market and I am waiting it out. The last one in March 2020 cut prices in half but I trusted Trump and waited it out. Less than six months later, it rebounded -- the quickest recovery ever.

I do not see a recovery this year. Likely stocks will dip another 10%. I am not going to point fingers because I don't have to.

To find out what is going on, you have to go outside Corporate Media which serves the fascist Democrat Party.

Maurie Backman reported, "JPMorgan CEO Warns U.S. Is Headed Toward Something Worse Than a Recession."

That would be Jaime Dimon. He still denies that we are in a recession but he says there is a 20% to 30% chance of something worse -- after the election.

The something worse is double-digit inflation. We have too much money chasing too few goods. You can blame the recession on supply-chain problems caused by locking down the economy over covid.

But inflation? Biden owns that. He tried to buy prosperity by flooding the market with trillions of dollars. Now the Fed must shut off the spigot by raising interest rates. 

Larry Summers, Clinton's treasury secretary, said, raise rates high and quickly and we will return to normal sooner.

He said, "History records many, many instances when policy adjustments to inflation were excessively delayed and there were very substantial costs to that. I am aware of no major example in which the central bank reacted with excessive speed to inflation and a large cost was paid."

He handled the dot.com bubble bursting with aplomb. Maybe we should listen to him.

20 comments:

  1. Between 1990 and 1998, Russia’s economy suffered perhaps the worst downturn of any major country that was not the victim of either war or natural disaster. The proximate cause of course was the collapse of the Soviet Union and the replacement of its system of central planning with a market economy. Larry Summers played a large role in shaping this transition.
    Russia’s per capita income fell by one-third between 1990 and 2000, a decline that dwarfs the falloff in the Great Depression in the United States.
    This had enormous consequences in the daily lives of the Russian people as the system of social supports that provided basic services collapsed with nothing to replace it.

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    Replies
    1. Not to mention out of that decline Russia ended up with Putin in charge.

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  2. Pretty soon, a recession will be defined to occur after 48’months of economic decline. After Xiden is no longer president.

    ReplyDelete
  3. I would argue it is not a demand side inflation issue but a supply side issue. The soaring cost of energy & petro products (oil, fertilizer, etc.) is sending production costs soaring. The build back better plan is designed to shrink western economies. How else can you shift to green energy. Green energy is not capable of replacing oil so a shrinking of western economies must occur. Sound crazy? Look at what is happening...

    ReplyDelete
    Replies
    1. Each one is different. Supply squeezes did hurt, and had an impact. But food is accelerating like crazy, as did energy. Housing went through the roof. We now see car repos spiking and utility payments being missed. Energy is leveling off because demand is falling - food never levels off.

      The fertilizer issue that is looming will be another supply side push - and it has the added bonus of resulting in significant agricultural output reductions. To the point that we may see regionally acute hunger and starvation.

      The world can no longer support just shy of 8 billion people with the global system falling apart, and western leaders making a war on energy. Every davos crowd devotee is pushing global starvation with their green energy dream. They should all be tried for crimes against humanity and hung.

      Delete
  4. They changed the definition of vaccine quite a few times. Why would anyone think any word can't be changed as the need arises?

    ReplyDelete
  5. You can blame the recession on supply-chain problems caused by locking down the economy over covid.

    Actually, you can probably blame it on an incompetent little buttpeg.

    ReplyDelete
  6. Looks to me like it's only s recession compared to fulfillment in 2021 of the pent up demand of 2020.
    However it's also clear that the upwards trend is stalling out.
    Given the disruptions in trade and the long overdue tightening in the money supply I do see that we are going to have a full fledged recession complete with 7 to 8 percent unemployment and real estate and stocks down 30 percent from current levels.
    Plan accordingly.

    ReplyDelete
    Replies
    1. All possible - real estate is already falling. Stocks I don't think have another 30% slide in them - but they will go down more.

      Delete
  7. I watched Journal Editorial Report on Fox Business News and heard " 'if' we slide into a recession" from the anchor, and no one on the panel challenged. So glad we have reliable sources of information like Don.

    ReplyDelete
  8. SUZQ22- As Madge the Manicurist said 41 years ago, "You're soaking in it." Priceless, Don. Laughed out loud on that one.

    ReplyDelete
  9. The reporting is so slanted because they are trying to prevent a Republican wave. I find it unfathomable that they no one will notice inflation.

    ReplyDelete
    Replies
    1. EN2 SS says;
      The American public has shown themselves to be very stupid, since the fascists/groomers/demoncrts took over edumacation decades ago.

      Delete
  10. yes we are in a recession by technical definition and yes the media would remind us about it everyday if Trump were president

    ReplyDelete
    Replies
    1. IF TRUMP was occupying the DC White House, we would not be in a Recession.

      Delete
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