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Evidence Of Coming Recession Is Overwhelming: US

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posted on Jul, 20 2012 @ 06:55 PM
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A good article that offers a snapshot of recent economic data out of the US in support of the claim that the world's biggest economy is already in recession or will be in the next few months (though definition of a recession is two consecutive quarters of negative growth).

It's taken some time to turn the direction of the world's biggest economy but seems clear that it is doing so now. Once it becomes evident to markets, economists, analysts and policy makers around the world that the US is in trouble, can expect a lot more alarms being sounded over the health and viability of the global economy. Appears the world is heading toward that perfect storm, and that's just the economics.

Comstock Partners, Inc


We noticed the first signs that the economy was beginning to soften about three months ago. Now the evidence of a slowdown has become so overwhelming that it is difficult to avoid the conclusion that we are headed for a recession. We cite the following as evidence.

Retail sales (both total and non-auto) have dropped for three consecutive months. This has happened only five times since 1967----four times in 2008, and one now. Vehicle sales have tapered off with May and June being the two weakest months of the year. Consumer confidence for both the Conference Board index and the University of Michigan Survey are at their lowest levels of 2012.

On the labor front, June payroll numbers were weak once again and averaged only 75,000 in the second quarter. The latest weekly new claims for unemployment insurance jumped back up to 386,000 and the last two months have been well above the numbers seen earlier in the year.

The ISM manufacturing index for June fell 3.8 points to 49.7, its first sub-50 reading in the economic recovery. The ISM non-manufacturing index for June dropped to its lowest level since January 2010. Most recently the Philadelphia Fed Survey for July was negative (below zero) for the third consecutive month.

The small business confidence index declined in June to its lowest level since October and has now dropped in three of the last four months. Plans for capital spending and new hiring have dropped sharply.

Despite all of the talk about a housing bottom, June existing home sales fell 5.4% to its lowest level since the fall of last year. In addition mortgage applications for home purchases have been range-bound since October.

Core factory orders, while volatile on a month-to-month basis, have declined 2.6% since year-end, and the ISM numbers cited above indicate the weakness is likely to continue.

The Conference Board Index of leading indicators has declined for two of the last three months and is now up only 1.4% over a year earlier, the lowest since November of 2009, when it was climbing from recessionary numbers. The ECRI Weekly Leading Index is indicating a recession is either here now or will begin in the next few months.

The breadth and depth of the slowdown are greater than the growth pauses experienced in mid-2010 and mid-2011, and indicate a strong likelihood of recession ahead. In addition the foreign economies will be a drag as well. A number of European nations are already in recession and others are on the cusp. The debt, deficit and balance sheet problems of the EU's southern tier are a long way from any solution, and will not remain out of the news for long. China is coming down from a major real estate and credit boom, and is not likely to avoid a hard landing. The Shanghai Composite is in a major downtrend, declining 28% since April 2011. The view that China is immune because of their unique economic system reminds us of what people were saying about Japan in 1989.

The stock market is ignoring these fundamentals as it did in early 2000 and late 2007 in the belief that the Fed can pull another rabbit out its hat. It couldn't do it in 2000 or 2007 when it had plenty of weapons at its disposal. Now there is little that the Fed can do, although it will try since it will not get any help, as Senator Schumer so aptly pointed out at Bernanke's Senate testimony. In sum, we believe that the stock market is in store for a huge disappointment.




posted on Jul, 20 2012 @ 07:17 PM
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What do you mean coming recession?

We're already in a recession.



posted on Jul, 20 2012 @ 07:22 PM
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reply to post by Pazuzu67
 


You'll have to ask the authors of the article that question. I don't disagree with you but GDP numbers are still showing positive, unless you have other data to show otherwise?



posted on Jul, 20 2012 @ 07:46 PM
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Let's face it, all signs point towards a DEPRESSION.

Whoever thought up the term RECESSION was just looking for a softer sounding way of saying it with softer sounds rolling out of the mouth and a not so negative reminder of what happened back in Grandpa's days.

Depression, Recession...all the same as far as I'm concerned. One is just easier for people to chew on.

Peace



posted on Jul, 20 2012 @ 08:06 PM
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reply to post by jude11
 


A depression is a long period of recession. They are definitely different terms.

That said I think we have been in a depression since the end of 2000. The government measures the economy through GDP. Inflation is not stripped out of GDP. I think inflation has outpaced GDP since that time. which means the amount of goods actually sold has dropped. We can only go backwards and our leaders insist on going foward with the same crap.Something game changing will happen soon simply because it must.



posted on Jul, 20 2012 @ 08:10 PM
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Mitt Romneys own website says about job creation that he's going to leave this up to the individual states, as "The Federal Government can't be expected to have all the answers".

In his own words, from his own website.

And he has almost 50% support amongst Americans?



posted on Jul, 20 2012 @ 08:22 PM
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This quit being a recession in 2007. We have been in a depression every since. People do no want to admit it. They did not want to admit in 1933 either. There was all this talk of "green shoots" then and it is the same now. Obama is Herbert Hoover. He certainly ain't FDR. Although FDR was a commie traitor, he did help fix the economy. Just at the expense of freedom and our constitution. We don't have enough freedom or constitution left to do it again.



posted on Jul, 20 2012 @ 09:03 PM
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Canada trades freely about 80 percent of the GDP with America, once Canada's Real Estate market crashes like the U.S., well that'll be the end because how in the world will we be able to keep up with the demand when we have to lay off all of our workers who are exporting into the U.S.? Canada is already suffering from the U.S. Housing crash, once Canada is "cooled down" the U.S. will experience hyper inflation and then so will Canada at the same time.



posted on Jul, 20 2012 @ 11:30 PM
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Originally posted by sligtlyskeptical
reply to post by jude11
 


A depression is a long period of recession. They are definitely different terms.

That said I think we have been in a depression since the end of 2000. The government measures the economy through GDP. Inflation is not stripped out of GDP. I think inflation has outpaced GDP since that time. which means the amount of goods actually sold has dropped. We can only go backwards and our leaders insist on going foward with the same crap.Something game changing will happen soon simply because it must.


I understand the difference of course but as you stated the real term is depression since 2000. That being so, they refuse to use the real term and instead opt for the softer, less fearful "Recession" so the people don't run for the hills.

That's what I was getting at but my JD and rocks gets me all riled up on ATS sometimes...


Thanks.

Peace



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