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TMFDeej (99.47)

AM Economics: I'm so sick and tired of hearing about those darn "Green Shoots"

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April 14, 2009 – Comments (15)

 

I'm all fired up this morning.  I'm so sick and tired of hearing about those darn talking heads on television talking about evidence of "green shoots" in the economy.  Green freaking shoots.  It's annoying.  If I hear one more person say it I might pull a Van Gogh and rip my ears off. 

Whew that feels better.  I have no problem with analysts looking for signs that an economic recovery might be starting, but for some reason that overused phrase just drives me nuts. 

I'm not one of those doom and gloom permabears, but I strongly believe that when the U.S. economy does eventually reach a bottom, and make no mistake about it...it eventually will, but I think that we are headed for a multi-year period of slow to no growth in the United States.

Two numbers on the economy were published this morning.  Both of them were worse than expected.

First, March retail sales "unexpectedly" dropped 1.1% in March.  Unemployment is high and rising, consumer confidence still stinks, the savings rate is rising, taxes are rising, and the home equity ATM is closed.  Who on Earth expected retail sales to rise?  I personally don't find the drop in retail sales the least bit surprising.  Retail sales fall unexpectedly in March

Second, the Labor Department published the March PPI (Producer Price Index) this morning.  It dropped by 1.2% in March.  I still see absolutely no evidence of that inflation that everyone is so worried about.  Deflation is more likely than inflation to be the near-term problem. 

I agree that inflation will eventually arrive.  It always does and it is in the interest of the people who control the money supply for some inflation to exist.  However, I expect prices to continue to fall in the short run.  Inflation might be a couple of years away.

 

Deej

15 Comments – Post Your Own

#1) On April 14, 2009 at 10:33 AM, alstry (35.76) wrote:

Have you been reading my blog????

 :)

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#2) On April 14, 2009 at 10:40 AM, TMFDeej (99.47) wrote:

There's a huge difference between your views and my views, Alstry. 

You believe that unemployment will hit something like 30% to 40%, that more than half of the companies that are in the S&P 500 will go bankrupt, and that we all will be overwhelmed by an army of unemployed zombies and our firearms will be useless against them.

I believe that the economy will bottom out some time in 2010 and that we are in for an "L" shaped recovery, or lack there of without much growth where yield will be king and capital gains will be hard to come by.

Deej

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#3) On April 14, 2009 at 10:51 AM, carcassgrinder (45.58) wrote:

"buzz words", cliches and "branding" have absolutely destroyed creative media and marketing.  This idea of being able to set "formula's" to human psychology is not only lazy and inaccurate...but it is also annoying as hell.....it all started with the Energizer Bunny...or the Bartles and James guys...can't remember which.

The "formula" creation in a psychologically driven market is also the achilles heel of Keynesianism. 

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#4) On April 14, 2009 at 11:18 AM, charlesblazer (99.43) wrote:

"Convergence. Viral marketing. We’re going guerilla. We’re taking it to the street while keeping an eye on the street (wall street). I don’t want to reinvent the wheel here. In other words, it is what it is. Buying paper just became fun."

-Ryan Howard, MBA (The Office, Season 4)

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#5) On April 14, 2009 at 11:26 AM, whereaminow (70.26) wrote:

I'm not one of those doom and gloom permabears, but I strongly believe that when the U.S. economy does eventually reach a bottom, and make no mistake about it...it eventually will, but I think that we are headed for a multi-year period of slow to no growth in the United States.

Isn't that pretty much what Peter Schiff and other doom-and-gloomers are saying? 

David in Qatar

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#6) On April 14, 2009 at 12:00 PM, TMFDeej (99.47) wrote:

No the doom and gloom people believe that the economy will keep falling and falling and falling.  I just believe that we will fall to a certain point and sit there on the bottom for a long time.

Deej

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#7) On April 14, 2009 at 12:33 PM, bostoncelitcs (69.26) wrote:

You're right we will eventually reach a bottom in the economy......When those making over $200,000 stop paying their taxes.....lol.

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#8) On April 14, 2009 at 1:30 PM, Goronmon (90.68) wrote:

Isn't that pretty much what Peter Schiff and other doom-and-gloomers are saying?

I'd classify the "doom and gloomers" as the people advocating stocking up on guns and ammo so you can defend yourself and your stockpile of food from the inevitable gangs of looters as the world devolves into a Mad Max style madness.

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#9) On April 14, 2009 at 7:38 PM, DemonDoug (98.90) wrote:

No the doom and gloom people believe that the economy will keep falling and falling and falling.

You know, I've never seen any doom and gloomer say that the economy will be falling ad infinitum.  More like they just things will go down farther and stay down longer than most other people foresee.

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#10) On April 14, 2009 at 10:49 PM, SharpSEO (66.29) wrote:

Deej said, "I'm not one of those doom and gloom permabears, but I strongly believe that when the U.S. economy does eventually reach a bottom.."

I really doubt that most bears consider themselves "permabears". A lot of these guys were dead-on, but they were too early. The market was extremely irrational over the decade or so.

Look at Ron Paul, he's been crusading against reckless monetary policy for 30+ years. And now that it's obvious he was right, the dude isn't gloating. He looks sad in most of the recent interviews I"ve seen. He's preaching doom and doing a bear-dance.. It seems like he feels he failed, which sucks.

Bill Fleckenstein is another one, he's been calling out Alan Greenspan for longer than anyone else I know of. I highly recommend his newsletter, btw, www.fleckensteincapital.com.

Most of these so-called "permabears" want the economy's fundamentals to improve. They have advocated changes, in an effort to facilitate improvement. But nobody listens, and you gotta call it like you see it, no fluff.

I really enjoy your pieces Deej, just had to share my thoughts on this one.

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#11) On April 14, 2009 at 11:24 PM, Gingerbreadman55 (32.19) wrote:

I hate to pull an internet thing on this blog, but... This ^^

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#12) On April 15, 2009 at 1:08 AM, MastiffFool (< 20) wrote:

Deej, I hear you about the "green shoots".

The one that makes me want to put my foot though the TV is when Larry Kudlow starts in with his "mustard seeds".  How does he manage to stay on the air??  Actually, how does CNBS manage to stay on the air!?!

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#13) On April 15, 2009 at 6:29 AM, TMFDeej (99.47) wrote:

I agree 100%, Mastiff.  Any single word that comes out of Larry Kudlow's mouth is automaticly worse than the phrase "green shoots."  I actually knew his father in real life.  He was the nicest guy in the world.  Not only is Larry uber annoying, he's a real piece of crap as a person.

Deej

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#14) On April 15, 2009 at 6:37 AM, TMFDeej (99.47) wrote:

Thanks for reading and for the comments everyone.  I guess that I need to elaborate on what I consider to be a permabear.  As someone who's fairly negative on the economy himself, I do not consider people like Fleckenstein, Ron Paul, or Rubini permabears.  For the most part, I consider them to be realists. 

To me, the real permabears are the people who believe that this is the end of society as we know it, that we'all be living in caves, unemployment will hit 50%, etc... (Alsty cough).  I just want to differentiate myself from those over the top grandstanders who predict the most off the wall things possible so that in the one in a million chance that they're righ they'll look like absolute geniuses. 

A lot of people who weren't successful in real life would love to see America fail because they would be the kings of the world with their stashs of guns, canned food, and gold coins.  It is difficult to differentiate between the people who have real, legitimate explanations for why they believe that the economy will take a long time to recover and the kooks who are just preaching Armageddon for the heck of it.

Deej

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#15) On April 15, 2009 at 9:38 AM, SharpSEO (66.29) wrote:

Thanks for the clarification Deej, I gotcha now.

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