Comments on: The recession may not be over, but the recession narrative seems to be recovering

By: atul chatterjee

atul chatterjee — Thu, 07 May 2009 09:35:15 +0000

Rex, this is an absolutely brilliant post. It gives my reading a lot to fine tune about. I read a blog yesterday in which the blogger claimed that the economy had seen the worst. On the same page there was the announcement of a 30% slash in the Florida budget and a slash of over 1000 jobs by a company. Same as Cisco CEO announcing that the company had seen the worst and economy had bottomed out and also saying that they would be slashing 1000 jobs.
The narrative changes independent of the economy.

By: liontooth

liontooth — Sat, 28 Mar 2009 11:16:05 +0000

– It’s sorta like when you are thinking of buying a car… But as soon as you decide on that model, you see them everywhere you look. –

Obama has been under the “is he a socialist or not?” perception since the fall of 2008. With recent comments of taking over companies that may fail and raising taxes (while the recession and economic fallout continues), is the label becoming ‘seen’ as a fact? Under this ‘filter’ are capitalists going to invest in Geithner’s toxic assets plan? Why expose oneself to risk when the reward is perceived to be taken (taxed) anyway?

By: Blake

Blake — Fri, 27 Mar 2009 00:38:35 +0000

Rex,

If I had only one data point and it was marginal, I’d ignore it. I tend to take such things with a grain of salt.

There’s too much to ignore at this point.

As I said, I wasn’t listing everything that points to a financial armageddon for the USA.

I discount everyone who was financial doom and gloom over the last 30 years. To me, they’re sort of like the Jehova Witnesses who were predicting the End Times thirty years ago. The Witnesses were predicting the End Times thirty years prior to thirty years ago.

If there were enough counter-balancing data points, we wouldn’t be having this discussion.

To paraphrase a writer who’s name escapes me at this point “make sure you buy a bunch of booze. That way, if I’m wrong, we can sit around, have a nice toot and laugh. Because I won’t care.”

By the way, the current narrative seems to be “look, the market is up, we’ve weathered the storm, recession will be over the end of the year.”

I’m saying that narrative is a real “head in the sand” approach and people are in for a rude awakening.

By: Jim O'Sullivan

Jim O'Sullivan — Thu, 26 Mar 2009 23:58:27 +0000

No breadlines or Hoovervilles yet. Well, not those inhabited by people who weren’t already plagued by really bad habits. Wake me up when unemployment is half of what it was in the mid-thirties. In the meantime, ask yourselves why we had to give a bunch of foreign banks money because AIG couldn’t. Oh yeah! The sky was falling. Right.

By: Nathan Ketsdever

Nathan Ketsdever — Thu, 26 Mar 2009 23:56:13 +0000

>>>>The new narrative will suggest that more than “credit swaps,” the “crash” was caused by our leaders scaring the beejeezes out of us and we all responded like people who have the beejeezes scared out of them should rationally respond — we started hiding in the basement instead of shopping. As I blogged the other day, prepare to read a lot about Robert Shiller, who will be described as “one of the only economists who actually ‘called’ the current economic meltdown.”

I think it was co-created by 1) the market, 2) real estate meltdown, 3) credit and 4) the populous/business confidence.

It would be interesting to read papers from Jan 22, 2008, which is when “US recession” spikes on google.
http://www.google.com/trends?q=us+recession&ctab=0&geo=all&date=all&sort=0

Geoff Colvin of CNN theorizes on Jan 22, 2008 it was a savings glut around the world by “foreigners.”
http://www.urlzen.com/9uu

Google Trends for Consumer Spending just as an FYI: Would be interesting to see the period from Nov 30, 2007 to Jan 22, 2008 on the market
http://www.google.com/trends?q=consumer+spending

By: Jackson Miller

Jackson Miller — Thu, 26 Mar 2009 23:54:00 +0000

Crap! Are the deals going to be over before I have the chance to capitalize on them?!?!

By: Carl Pham

Carl Pham — Thu, 26 Mar 2009 23:21:48 +0000

I don't agree in the slightest that we all filter facts to fit our narrative. That's some kind of post-modernist ha ha we're all liars kind of shtick, the same one the Big Liars use. Well, we're all liars, so you can't pick and choose on the basis of honesty, or correlation with reality -- so instead, pick the narrative that you like! That serves a Greater Good! Like mine! Feh. I think most of us, most of the time, are just looking for facts. We haven't made up our minds yet. We're in no hurry, because we're not paid to write opinions -- and we don't even blog our opinions. We just want to know where to invest our retirement dough, where to send our kids for school, whether it's a good time to buy or sell our house. We're not invested in one answer or the other to these questions. We don't care which the answer is -- we just want to know it as accurately as we can. So we sift the data, looking for clues, and we do it as best we can. Just because some of us are professional full-time liars, and all of use are part-time amateur liars (when we're trying to explain to our dumpee why we're dumping her, for example) doesn't in the slightest bit imply that all of us are full-time liars. That is making far too much stew from one oyster.

By: milesfromkansas

milesfromkansas — Thu, 26 Mar 2009 23:18:06 +0000

Since I graduated from college in 87, there have been down years circa 87, 92, 02 and 09. Of the four this is the only one where I haven’t lost my job or couldn’t find one. My perspective is that this is the *fourth* worst economy since the Great Depression. The salient feature of today’s morass is the vast destruction of wealth, rather than job losses, high inflation and interest, or a contracting GDP. And who’s crying the loudest? The baby boomers… Remember, it’s all about them. It’s always been about them. Thank you, Dr. Spock.

By: Rex Hammock

Rex Hammock — Thu, 26 Mar 2009 23:17:39 +0000

@Blake re: The economy is going south in a big way. You read it here first.

Are you suggesting you are the first to call the economy continuing downward?

If so, I can point you in the direction of people who have spent the past 30 years predicting it. Again, your choice of selecting data points regarding Chinese holdings of our debt, commercial real estate or whatever are all the result of filters you’ve selected that help you see things in a certain way.

You may be correct. My point is not an attempt to correct you. My point is to suggest that it is time we all learn more about how we process information and choose to hear that which helps reinforce what we believe and ignore that which doesn’t.

By: Blake

Blake — Thu, 26 Mar 2009 22:47:04 +0000

Well, I wonder if people are going to be upset when it turns out the change in “narrative” turns out to have been a huge lie.

The economy is going south in a big way. You read it here first. We’ve only seen the first wave of the storm.

We still have several problems.They are: the Chinese are unwilling to buy any more of our debt, we’re piling on even more debt, the commercial real estate market is overbuilt and the Chinese are holding more than a trillion dollars they’re going to be getting rid of.

I didn’t list everything, either.

You think the recent drop below 7,000 on the DOW was bad? Wait until it drops below 6,000 and keeps going.