Breaking News: The Recession Has Been Over For a Year!
Courtesy of Jr. Deputy Accountant
Cleveland Fed economists aren’t the only ones confused by the simple concept of continued economic illness, TPTB are smoking the recovery crack (which started with Bernanke and his green shoots) with no sign of giving up on the non-existent glimmer of hope. Making this view official, the National Bureau of Economic Research has officially declared the Great Recession over as of July 2009. I know what you’re thinking America (and everyone else), what f**king crack data could they possibly have looked at to come to that conclusion?
No, it isn’t a scanner hooked up to Bernanke’s shiny head reading his wishful thoughts. It’s supposedly actual data:
In both recessions and expansions, brief reversals in economic activity may occur–a recession may include a short period of expansion followed by further decline; an expansion may include a short period of contraction followed by further growth. The Committee applies its judgment based on the above definitions of recessions and expansions and has no fixed rule to determine whether a contraction is only a short interruption of an expansion, or an expansion is only a short interruption of a contraction. The most recent example of such a judgment that was less than obvious was in 1980-1982, when the Committee determined that the contraction that began in 1981 was not a continuation of the one that began in 1980, but rather a separate full recession.
The Committee does not have a fixed definition of economic activity. It examines and compares the behavior of various measures of broad activity: real GDP measured on the product and income sides, economy-wide employment, and real income. The Committee also may consider indicators that do not cover the entire economy, such as real sales and the Federal Reserve’s index of industrial production (IP). The Committee’s use of these indicators in conjunction with the broad measures recognizes the issue of double-counting of sectors included in both those indicators and the broad measures. Still, a well-defined peak or trough in real sales or IP might help to determine the overall peak or trough dates, particularly if the economy-wide indicators are in conflict or do not have well-defined peaks or troughs.
As I stated last Saturday, you cannot tell me this is a recovery as a recovery would imply a somewhat-normally functioning economy with healthy (or potentially healthy) fundamentals. I may not be an economist but I am of the opinion that what we have now is f**ked and yes, that’s my technical analysis of the situation. This is the Bizarro World version of our former economy and you cannot promote a illegitimately socialized capitalist economy and call that "normal." At least not in America.
I call B.S. and it is disrespectful to the hard-working, well-intentioned people of this country still starving for work to say that the recession ended over a year ago and we can all run back to the mall now that the coast is clear. You look me in the eye and tell me any of this is normal. If it’s normal, why not kill ZIRP? If it’s normal, why not turn off the presses?
The recession ended in June 2009, making it the longest downturn since the Great Depression of the 1930s, the National Bureau of Economic Research said on Monday.
The NBER, considered the arbiter of U.S. recessions, said its declaration did not mean the economy had "returned to operating at normal capacity" and cautioned that economic activity sometimes remains below normal well into expansion.
President Barack Obama, under pressure to speed up the pace of recovery and drive down unemployment as November congressional elections near, said the official end of the recession did not change the grim reality for many people.
"Economists may say that the recession officially ended last year," Obama said. "Obviously for the millions of people who are still out of work, people who have seen their home values decline, people who are struggling to pay their bills day to day, it’s still very real for them."
The only way I buy the recession ending in July 2009 is if someone tells me that it started right back up again on August 1, 2009.
So uh, if that’s not the case then shall we expect the FOMC to decide this month that the Treasury money laundering machine can be turned off? Bwhahahaha I’m not holding my breath for things to actually be better any time soon and won’t be holding my breath for that either.
Perhaps Bank of Canada’s Mark Carney deserves credit for calling the end long before the NBER grew the large distorted cojones to say so as he called it over way back in July of last year. Lagging indicators my a**, Canada still has a housing bubble to pop but they’re still in the process of inflating it so we’ll check back to see how that works out in a few years.
