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awallejr (84.39)

How many years does it take before a Double Dip Recession can no longer be one?

Recs

13

January 10, 2012 – Comments (20) | RELATED TICKERS: WH , E , N

For years now I kept hearing the threat of "double dip" recession.  And for years now it hasn't happened.  Eventually we will see one just from the cylcical nature of things, but when does the "double dip" one can no longer be?  The likes of Roubini, and Schiff and Whitney have for years kept threatening us with one.  And for years now they have been wrong.  It's been more than 2 1/2 years since GDP growth has turned positive, and expectations are that it should continue to be by the data that keeps streaming out.

Economy is doing what I said years ago it would be doing.  Slowly healing.  Personally I think Bernanke deserves the kudos for heading off a total disaster.  And he is prepared to do his darndest not to see a repeat of the 1930s.

But then Roubini, and Schiff and Whitney will probably predict a "double dip" the second half of 2012.

20 Comments – Post Your Own

#1) On January 10, 2012 at 5:27 PM, portefeuille (99.74) wrote:



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(from here)

The Ifo Business Cycle Clock: Circular Correlation with the Real GDP

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#2) On January 10, 2012 at 5:31 PM, portefeuille (99.74) wrote:

the rally is not done yet ...



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short explanation.



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(from here)

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#3) On January 10, 2012 at 5:33 PM, portefeuille (99.74) wrote:

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#4) On January 10, 2012 at 5:38 PM, portefeuille (99.74) wrote:



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(from here)

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#5) On January 10, 2012 at 5:51 PM, dbjella (< 20) wrote:

Good question.  My only answer is we won't, because of the influx of money to combat "deflation." 

My question to you is what are the long term impacts of countries that spend more than they take in and central banks the lend to others at "made up" rates?

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#6) On January 10, 2012 at 10:16 PM, portefeuille (99.74) wrote:

#2 update.



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#7) On January 11, 2012 at 12:53 AM, awallejr (84.39) wrote:

I still say that first chart of yours is a picture of the BP oil spill Porte.

Personally I don't think the rally is over.  We corrected hard and the market rebounded hard.  If not for the headline news I think the DOW would be over 13,000.  Ironically if you bought the DIA begining of last year and sold at the end you made 5.5% despite the literally 6 months of daily triple digit swings.

As for your question I suspect Binve could answer it better than I.

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#8) On January 11, 2012 at 12:58 AM, awallejr (84.39) wrote:

"your question" meaning to dbjella.

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#9) On January 11, 2012 at 11:10 AM, IBDvalueinvestin (99.49) wrote:

LMAO.. why?

Double dip already happened..

Bear market started in Feb. 2000, stocks crashed hard, and even harder on 9/11/01 then we had a bear market rally 2004-2006 and then a double dip in 2007-2009

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#10) On January 11, 2012 at 12:01 PM, AvianFlu (80.29) wrote:

Most rational observers would agree that the rate of inflation is understated. Using an understated inflation rate in the GDP calculation results in more positive GDP figures. If you run the GDP calculations using realistic inflation figures you'll find that GDP has not increased much, and in fact may have been contracting for several years. This mirrors the general consensus of real life experience. In the best case scenario we have been bottom bouncing for some time. In the meantime we face a much worsening fiscal picture in terms of national debt that must be financed. I think that right now we are in a period of sunshine...but it won't be lasting. I can't speculate how that will impact equities.

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#11) On January 11, 2012 at 12:12 PM, PeteysTired (< 20) wrote:

AvianFlu

"In the meantime we face a much worsening fiscal picture in terms of national debt that must be financed."

Have you read any of Binve's blog's?  I would be curious to know what you think about financing debt when he said that Treasuries should really be done away with?

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#12) On January 11, 2012 at 12:22 PM, AvianFlu (80.29) wrote:

Petey: I haven't seen the blogs you refer to, but apparently I should check them out.

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#13) On January 11, 2012 at 1:35 PM, Frankydontfailme (26.14) wrote:

Peteys, until they actual do away with treasuries as Binve sugeests, deficit spending does coincide with treasury selling. Interest must be paid on treasuries. If we actually start printing money without debt then wake me up.

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#14) On January 11, 2012 at 1:45 PM, DJDynamicNC (56.87) wrote:

"Most rational observers would agree that the rate of inflation is understated."

Can you quantify that, or back it up in any way?

The "most rational people would agree" dodge is one of the oldest in the book.

 To be clear, I'm not saying you're necessarily wrong, that just isn't a very strong case you've made for your claim and I have some pretty serious doubts.

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#15) On January 11, 2012 at 2:23 PM, ETFsRule (99.91) wrote:

As Port's first graph shows, Germany's recovery has stalled and is currently in the "downswing" stage. Three months from now, I would expect them to officially enter a double-dip recession.

The US may fare slightly better in the short term, but I think the Euro is doomed, which of course will wreak havoc on markets all over the world.

If it weren't for the Euro mess, I would agree with your prediction of the US "slowly healing".

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#16) On January 11, 2012 at 6:06 PM, awallejr (84.39) wrote:

 IBDvalueinvestin

So basically the threatened double dip is really a threatened triple dip?

 AvianFlu

" I think that right now we are in a period of sunshine...but it won't be lasting. I can't speculate how that will impact equities."

But that is the whole point, to make those predictions.  As for whether we are just enjoying the "eye of the storm"  I can't say.  Things have been playing out the way I have predicted in the past here so far, aside from the volatility.  But as stated, if you bought the DIA in the begining of 2011 and ignored any market reports and swings, at the end of the year you made 5.5%.  Many hedge funds would have loved that result.

 ETFsRule

As for the Euro I think it is an experiment whose day is numbered.  Without a central government, I just don't see the advantage of using the currency by many of the weaker European economies.  I wish it would dissolve so I don't have to listen to the news about Europe anymore.  Some say it would be catastrophic, but no one really gives concrete reasons why.  It might be for Germany but I don't see why for the US.

 

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#17) On January 11, 2012 at 10:42 PM, AvianFlu (80.29) wrote:

DJDynamic:
Follow the link below and you will see inflation charts calculated using 1980 and 1990 methodologies. I would argue that those traditional methods more accurately reflect what I see at the grocery store, gas station, or clothing store. In my own line of work, which involves metal fabrication, I have had to absorb price increases as of Jan 1st ranging up to 28%....but of course that is anecdotal.

http://www.shadowstats.com/alternate_data/inflation-charts

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#18) On January 12, 2012 at 10:28 AM, ETFsRule (99.91) wrote:

"AvianFlu (82.37) wrote: DJDynamic:
Follow the link below and you will see inflation charts calculated using 1980 and 1990 methodologies."

That is not what your link shows. Your link is merely to a Shadowstats "estimate" of inflation.

Shadowstats refuses to disclose the details of their inflation numbers, other than to describe them as "estimates" of how inflation might look using various methods. There is nothing traditional about it.

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#19) On January 12, 2012 at 11:39 AM, Frankydontfailme (26.14) wrote:

 Inflation - the guild's basic needs index seems 'rational' to me

 http://www.google.com/imgres?um=1&hl=en&client=firefox-a&sa=N&rls=org.mozilla:en-US:official&biw=1119&bih=548&tbm=isch&tbnid=n-kiQCEJbCjxiM:&imgrefurl=http://www.guildinvestment.com/2011/11/23/breakup-of-the-euro%25E2%2580%25A6greece-will-be-the-first-to-leave%25E2%2580%25A6germany-leaks-a-bombshell-proposal/&docid=5AZJwVc9RIS_fM&imgurl=http://www.guildinvestment.com/wp-content/uploads/2011/11/graph1.jpg&w=936&h=439&ei=0QsPT7iqLebt0gHl8a2xAw&zoom=1&iact=hc&vpx=88&vpy=147&dur=1021&hovh=154&hovw=328&tx=197&ty=57&sig=117811534221589533271&page=1&tbnh=89&tbnw=190&start=0&ndsp=14&ved=1t:429,r:0,s:0

 Their process:

http://www.guildinvestment.com/2011/06/09/this-week-guild-investment-management-inc-is-proud-to-introduce-the-guild-basic-needs-index/

 

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#20) On January 12, 2012 at 3:19 PM, ETFsRule (99.91) wrote:

Frankydontfailme:

Interesting concept, but based on their graph, it looks like their index is too volatile to be realistic. For instance, their overall index dropped by almost 50% during the crash in 07-08. Does that mean the average cost of living really fell by 50% in one year? I certainly don't think so.

My guess is that, for "shelter", they simply use the selling prices of homes. The BLS uses a more complex and realistic approach, because a drop in home prices doesn't necessarily mean that you will save any money at all - not if you're locked into a long-term loan.

And I don't understand why they left out things like taxes and insurance, which surely can't be considered optional.

Anyway, when you try to oversimplify a complex issue, it probably isn't going to work out very well. The BLS does a pretty good job of researching & finding out what people are really spending their money on.

And if the seasonal adjustment worries you, they also release the CPI without it (it's exactly the same).

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