We have moved beyond this already...How long and deep will it be is the new question!

No matter when the recession starts, it will be mild.

That's what the resident economist of this blog told me.

Huh?! Aren't you Sebastian's alter ego?

Is there a recession? When did it start? Lets beat this dead house some more, who knows? If the consumers don't know, maybe they will spend enough to bring us out! God bless our gubment, they is knowing what is best. We is all OK.

Since Reagan, cognitive Dissonance has become an accepted state of mind among the conservatives.

OT: Congress calls for the nationalization of U.S. refineries in order to better control supply of gasoline.

Breaking News | Latest News | Current News - FOXNews.com

Ave Joe: OUTSTANDING ! Don't stop.

Quotes like yours will really hit home clickable on a 1 year stock chart.

This reminds me of the article I saw in the paper today from some UCLA economisseds who say there is no recession.

Do these people just enjoy being wrong, over and over and over again?

01/06/08 Abby Joseph Coen calls for a 14% return on the S&P for 2008 to 1650 due to avoiding recession. (Cohen loses job calling S&P on 3/17/08, replacement calls for drop to 1160 and rebound to 1300 by year's end)

Poor Abby, she didn't notice that her script had "old" stamped on it and that a new script was being faxed to her. By the time she got it she'd read from the wrong one and was toast.

In my experience, the recession has yet to bite into wealth and generate day-to-day anxiety among high income earners...

I gather they are still expecting McCain to be elected. If they were prudent they'd be preparing for Obama.

Average Joe | 06.18.08 - 5:37 pm

Thanks. We need a blog that just keeps track of all the terrible calls.

I'm not defending the "everything is rosy" point of view. Similar to many posters here, I have significant concerns about our economic future and am planning accordingly.

Having said that, among my non-financial blog reading friends, there is very little economic anxiety. They are a bit nervous about housing -- but confident about their jobs, their vacation plans, retirement plans, etc. Gas prices are an annoyance, but hardly a financial strain to a six-figure family.

This contrasts sharply with the dotcom bubble -- where exploding stock portolios were everywhere and the fear was palpable.

If this guy Rosenberg is so smart, how come he couldn't stop his employer from making 10s of billions in ridiculous loans?

Well, I've heard Obama called the Magical Unity Pony, but I didn't realize McCain is the Magical Economic Pony. I mean, simply none of this would be happening except because of the threat of an upcoming election and possible Repub loss, right?

FWIW, when I stopped at the local AAA branch to make a payment today I asked how business was. She told me that normally at this time of year everybody there would be swamped churning out TripTiks for all the vacationers, but that's come to a dead stop, primarily due to gas prices. Which means that soon we'll see a headline "Vacation Driving Unexpectedly Declines."

Mr Beach: But alright, what would you have your 3 friends do? They already bought those houses.

Aheadofthecurve: I'd have each of my friends reconsider the point of putting money into their homes. Sales are still happening in prime spots in California -- with little yoy drops. So, I'd consider selling, renting and putting the proceeds into investments that better reflect our current financial conditions.

In reality, I don't think any of them will sell and move anytime soon. As CR has noted on this blog, the best zipcodes are still doing okay. For how long, that is the big question.

Anonymouse writes:
All we hear is blah blah blah with NO accountability.

Never read a better description of all major media.
Anonymouse | 06.18.08 - 6:45 pm |

That is the truth! Thank the intertubes for folks like CR and Tanta....and curse the blue glow that enthralls and misinforms far too many.

Paulson said the US tends to lead the way in terms of addressing market shortcomings, "and I think that's going to be reflected in our currency value."

Business finance news - currency market news - online UK currency markets - financial news - Interactive Investor

Uh Huh! 76 million baby boomer's getting ready to retire, 57 trillion in unfunded liabilities, 10 trillion dollar budget deficit, yawning trade gap with over 2 billion in outflows a day. There are a few shortcoming all right Hank and the reflection will be Zimbabwe staring back in the mirror.

These analysts are truly amazing. They pay attention to all the wrong information and stick to it, like sebastian.

Never mind that we have unprecedented capital destruction coinciding with a time of unmatched institutional leverage combined with hedges to counterparties without capital.

A mild recession my ass.

----Michael Darda from MKM partners: "There is no evidence for that (recession)" "I think those who think a recession is coming are wrong, dead wrong". 12/20/07

never a bad time to pick oon darda...
the dude who bought a fake armani suit off ebay and wore it on cnbc.

Mr Beach: I'm not sure that selling their homes and renting makes sense for your friends. Certainly for #2 who bought in 1998 his rent would likely be higher than his house payments are. I bought in 1996 (not in CA) and to rent a place anything even close to mine would probably be $600 or $700/month more. So how would selling make sense?

Even without burying gold in the back yard, I've managed to stay about even on the year. I'm holding plenty of cash and waiting to see what opportunities present themselves. If things hang in there I'll do fine. If things go down, they'll be good returns from buying low. And I won't have to turn my life upside down to do it. The whole recession/ no recession discussion seems pointless to me.

I suppose most people who aren't economists don't care if the technical criteria for a recession are met or not. If it feels like one, then that is enough for them.

As far as Mr. Beach, it is useless to point out that there are always winners. Farmers are finally going to get paid. The oil patch is looking a little brighter. Manufacturing can't help but smile at the improvements in their prospects. And people that maybe didn't do the optimal in RE but have nice incomes will pay their mortgage and not worry about it.

People are using gas prices as an excuse to go out and buy Vespas and new, smaller cars. In urban driving, most Vespa owners won't live long enough to hit the break even point on their 'investment.'

The thing I really don't get is someone that paid $35k on an SUV and if they are driving 15k miles/year, are buying 1000 gal of gas and can't deal with another $2k. The time frame for economic decisions is limited to a weekly fillup.

Who really gives a rats ass at the end of the day you either made money or you didn't.

idoc,

LOL.

Anonymouse,

Got my blood roiling. 'Course politicians always propose stupid things. Truman wanted to nationalize steal mills. Whatcha gonna do? Power hungry posers can't help themselves.

Cheers,

Aheadofthecurve,

No, actually it wasn't. Freudian slip I suppose. Actually, that's quite funny. Thanks Ahead...

Cheers,

Well, I do have to respect Sebastian's pluck. I will, however, respectfully disagree, and will say that we're in recession, but it won't be called for quite a while yet officially.

You know, it's sort of funny all this talk about gloom and doom, falling house prices, and costs of gas etc. A bunch of us were talking a weekend ago, and we're all actually making more money this year than we ever have, and yet we're pulling back on discretionary items. No one is really worried about the price of their house, or mortgage (in fact, 2 of my friends just refinanced, one who is commission only and got a great rate), or even the price of gas. But for some reason we're spending less. We're not eating out, not going to Starbucks, not buying clothes, drinks, or other things.

So that's why I'm in the longish and shallow camp. As soon as sentiment changes, people will open their wallets more and things will pick up. Probably after the election when McCain wins

for calling on buying financials 2 mo ago?

Well idoc, that would depened on what you bought and when now, wouldn't it? I recall at the time I said I saw value too, but needed some of those dog balls in addition to my own. But there was and is money to be made there.

But I'm still holding to my calculations and saying the DOW belongs at 11200. I got goosebumps today when it dipped below 12000.

By the way, you can take the fact that I've popped back in here as a potential short term bottom, since the last time I was here was Feb/Mar.

I'm glad to see little has changed here. It's sort of like stopping into a bar you haven't been in for 20 years and seeing the same drunks on the same stools. Comforting.

Remember even in recessions (or not) the sun still shines and the morning dew still smells fresh.

alright Aheadofthecurve

"Ken Heebner, on the other hand, made some calls that have proven to be very astute so far."
Gatsby | 06.18.08 - 6:46 pm | #

I might recognize that name...

Chris

Hell Jas, they make themselves proud. most of those asshats actually believe what they say.

Cheers,

ipodius,

"The posters here don't resemble the real world that I see. But hey, maybe it's a CA thing.'

I forget. Where is this world again?

Cheers,

"bluestatedon writes:
FWIW, when I stopped at the local AAA branch to make a payment today I asked how business was. She told me that normally at this time of year everybody there would be swamped churning out TripTiks for all the vacationers, but that's come to a dead stop, primarily due to gas prices. Which means that soon we'll see a headline "Vacation Driving Unexpectedly Declines"."

I just wanted to comment on the "unexpected" headlines. I know it sounds pretty stupid, but there's a reason behind it.

Newswire reportage just compare the result to the pre-release consensus estimate. The articles are essentially a fill-in-the-blank job with the numbers filled in on the release. Since the article has to be published within minutes of a release, there's not much ability to change that. So don't pay any attention to spin in the news wire stories.

But why are the expectations always wrong? Well, think about it from the economist's point of view.

If I think something is going to be low, I will give my estimate as being slightly below what I think the consensus is. This way if I'm wrong and the number is higher than consensus, I won't look wildly stupid. And if the number is lower than than my estimate, I can point out that I was below consensus but the number was even worse than my prediction, which indicates that my story about the economy is even more right than I thought, blah blah blah.

But let's say I give a really low estimate and the number ends up below consensus but above my estimate. I then have to explain why the number was higher than my forecast, even though it was below consensus. In other words, I have to explain away a result that was directionally in my favor. I don't want to be in that position.

Thus we end up with a tightly clustered consensus opinion which can be systematically incorrect.

ipodius-I haven't changed my spending. I'm a certified cheapskate in good times and bad, so there's nothing to change. I also don't give a rodent's hindquarters about the price of my house-I never came home in 2005 and said "Honey, our house was up $132, today; let's go out to dinner". Frankly our house is probably flat the last year or so, but even if it were down, I wouldn't come home and say, "House is down $83 today, beans for dinner tonight". They both sound equally absurd.

ipodius,

Ah...yes. New England not doing so bad right now. I suspect regional lenders learned some lessons from the early 90's meltdown there.

Fier Gluck.

Cheers,

The only thing I've noticed here in Albany is that certain "Gentlemen's Clubs" are a little less busy since a certain governor left town.

Curious however what the future is going to bring

Yes me in mass...there is no huge crash of anything, and house price declines are very, very localized and the further out from Boston you go to central MA, the more the decline. Not so much on the North Shore but some.

One anecdotal observation though...the cape has been DEAD. The past three weeks I left my office late. Close to five, and drove right over the bridge. No delays anywhere. And at night there, it seems like March. On the other hand, Memorial Day was the busiest ever reported. So maybe people are going to stick to the holidays and stay home on other weekends? That will hurt down there big time.

ipodius,

"And it isn't as bad as the posts on here. Not even close."

It is in SoCal.

And grats to the Celtics win. As painful as that is.

Cheers,

how are those RE prices looking on the cape.

YIKES! I'd say the prices are at least 20% down from where they were in 2005. I have a broker friend there and he's having his best year. Seems that people are snapping up anything that is now reasonable, or anything that someone has to sell. So if you're looking you can get a sweet deal if you know how to look.

Even the high end is selling...1M+. It just depends on where. Hyannis is, you know, the Billerica of the Cape (if you're from MA you'll get that) but Chatham, Truro, Wellfleet, Ptown....there is a lot of value to be had as those overleveraged sorts have to get out.

You should be more gloomy like the rest of us here, I say! We will assimilate you!

Oh my friends all think I'm an uber-bear short. I think context is everything. I'm just more middle of the pack in my gloom. I think this credit binge is going to cast a very long shadow over things. But Americans always manage to get back up again after they fall down. And it will happen this time too.

Misean thank you, it was a great game if you were a Celts fan. And don't you think Kobe needed a spanking? He thinks he's better than he is

oh yeah - drinking also helps alot!

And go Celtics!

ipodius,

"Misean thank you, it was a great game if you were a Celts fan. And don't you think Kobe needed a spanking? He thinks he's better than he is ;)"

The Celtics were the better team. I said so before the series, and of course got pilloried by homers here. Kobe is good, but didn't show it in the series. Celtic defense was really nigh unto unbelievable. But I agree he's no MJ.

The Celtics are an older team, the Lakers younger. Kinda like the mid 80's. We'll see next year.

Cheers,

Prices definately going to drop here but don't see it as bad as others places. Got a lot going on for us up here but the cold still sucks!

lol how true! but fall is worth it!

I think the key to this area is the schools, health care, and tech. The building boom is over, so contractor work is going to be tough for a while, but that's always very cyclical. People will cut back on property improvement. But I think it will be less bad here this time. We got wacked hard in the tech bust and other places not so much, so again another cycle here.

We're also lucky to have really good public transit around the city to take some of the heat off commuting. And who doesn't love crazy people on the T? I'm just a little concerned about the State Streets and Fido's of the area. That could have a negative impact. We'll see.

The Celtics are an older team, the Lakers younger. Kinda like the mid 80's. We'll see next year.

Ugh, the Celts were the only Boston team to suck it while the others were doing great. But you're right, they need some blood to keep it going. And tis the season to complain about the Sox now

Has that Nordstrom gone up yet? Don't count chickens..

12th-Well I already hoard cash; remember, I'm a certified cheapskate. As I said above, I've owned a house for long enough that it's cheaper than renting and I have no intention of moving. As far investing, well we already discussed the ultra short funds on another threads. Their performance sucks. Several months ago I made a bet with rich that my favourite stock ELN would outperform SRS. Well, so far this year it's up about 35% and SRS is down 20%.

ELN: Basic Chart for ELAN CP PLC ADR - Yahoo! Finance

And, I'm very confident it ain't done going up.

ShortCourage-If you believe things are as bad as you say, then I'm not sure writing your congressman suffices. You and I know it goes in the vertical file. In Spain the truckers practically shut down the country. I don't see anyone here doing anything besides bitching and moaning. Sorry.

I mentioned earlier today that I love this complacency - everyone is bullish here, or at least no one thinks its all that bad. The banks are f-cking broke and people yap yap yap about their delusions of their local economies, which they have ultimately no control over. See you at SPX 1080.

"The banks are f-cking broke"

But they still got checks!

The data I'm looking at is bad. Just saying.

Yes Misean it is. But not catastrophic. It depends on how you see the different sectors reacting to the current conditions, and where you think there is lift.

And where you think oil will be come the fall. I've said what I think. The price correction is going to be swift and brutal. That will wipe out the last of the bulls who have been playing the commoditiy game and there will be no counter trade. Then and only then, can the recovery begin.

SRS is flat y-o-y. It's down over 20% y-t-d. Could you have timed it just right and made money? Sure. But that's true of any stock.

Me? I suck at timing. So, I look for something that's undervalued and that I can hold for a long time. Like oil in 2002 or ELN in 2005. And when I find a company that has what I think, based on my professional knowledge, will be the leading Alzheimers drug and might sell $20 billion, I'm not going to piss around with timing.

So far, my strategy has worked pretty well, so I'll stick with it until it doesn't.

Classic stuff there, which will be on her tombstone:

And that's an indication that things are un-seizing, things are returning to a more normal phenomenon."

Hopefully before heating oil prices hit your region.

I fully anticipate it will be in time for the general election

Victoria's Secret. 52 year old Macrida Patterson is suing lingerie giant Victoria's Secret claiming she was hit in the eye by a decorative metallic object that flew off a thong she was trying on. Patterson was hurt last May while trying on a "low-rise v-string," which is part of the Victoria's Secret "Sexy Little Thing" line.

Somebody please tell Kona Gold's mother to disable the cut and paste buttons. Thanks.

I'll stop back some time soon; I'm sure you'll all be on your customary barstools, a little bit older and a little bit drunker.

Aheadofthecurve,

Damn dude so negative here. You got something to share? I mean aside or the attacks? Just asking.

You know, contradictory data, analysis or something.

You're dropping turd bombs with nothing to back them up.

Just a thought.

Cheers,

Misean,

I'm merely pointing out the futility of the constant complaining and posting the 567th report of some bank write-down. It's not my goal to dissuade you or anyone from their opinion. But I do keep coming back in my mind to what to do? And I keep thinking, if it's as bad you say (maybe it is, maybe it isn't) then buying SDS and posting here seems like very weak tea.

Just a thought.

How else do you explain 2 Bush terms? Shut down healthy debate by calling people names (liberals!) and then fire people that don't agree with you in business.

The irony with 2000 is that GWB ran on a smaller government and no foreign intervention platform. After all, the GOP was sick of Bosnia, Somalia, etc.

Ziggurat writes:
"I suppose most people who aren't economists don't care if the technical criteria for a recession are met or not"

I strongly agree. Sometimes it seems that the mindless prognostications about whether the economy is actually 1-2% stronger or weaker and whether that crosses some mythical threshold called Recession, takes the focus of what's really important.

Up through the 70's when the US was the only game in town, mostly manufacturing-based, where everyone aspired to a lifetime job(few entrepreneurs),many more industries were tightly regulated(think transportation, telecommunications, banking, etc.), upside potential of business was limited, low perception of risk of competition from oversees, unions were the drivers of the annual inflation rate, the Fed having much greater influence over interest rates-
This all had the effect of synchronizing the economy and so when there was a drop in growth it crossed wide swaths of the economy mostly at the same time. The sequence- growing economy= increasing demand = increased hiring= higher wages= increased spending= increasing production which eventually= overshoot= increasing inventories= increasing concern= decreased spending = decreased sales= plant closures= layoffs= working off inventories= increasing pent up demand+ you get the picture. This sequence seemed to happen in a much more coordinated fashion across the entire economy back then because it was a closed system compared to today. Identifying variables and addressing variables economy-wide that cold amplify recessions in that environment was much more effective than it is today.

IMHO the point is that today's economy is not closed, there is tremendous worldwide competition, it is not synchronized, it is not as regulated, there are less people who aspire to lifetime employment and the same company and there are many more small businesses. Focusing upon economy-wide solutions just won't be as effective(it's doubtful that the short term benefit we actually realize from the tax stimulus payments is going to be worth the additional national debt burden we're adding to our kids' future- don't know of anyone who's monitoring that potential trade-off). So maybe it's time to stop hand-wringing over the fact about whether we're in a recession and focus instead on trying to solve problems at the more micro level.

mp,

Would Conjure Bag be interested in his own music video by yours truly? I've been contemplating a project for nearly a year now. It would use the rhythm of Soldier Boy and be called Conjure Bag but with new lyrics and such. Good PR and the kids will love it!

I'm thinking -- sh**ty campgrounds are full for July 4 because people are economizing on vacations but still driving.
rich | 06.18.08 - 10:07 pm | #

ReserveAmerica controls the parks here in Colorado too. There are books that tell you the best campsite in the best campgrounds. Good luck reserving those now. You have to plan way in advance to reserve what you want and you need to be quick to reserve it as they go quickly. Funny, sometimes you have a better chance of getting a reservation by calling on the phone (and speaking to a rep) than using the web. But then when the weekend arrives that you've reserved for six months, it's raining.

Wow, didn't think I'd hear Reserve America come up here.
As far as camping costs, I can't complain. Sure, have to reserve the spot 6 months in advance, but for $75 a night I get a group campsite that holds 50 people and is less than 1 city block from the Pacific Ocean on the Mendocino coast.
Going on 7 years now a week of camping by the coast including food runs under $200 a head. Good livin! Year 8 is a month away.

Why is everyone so eager to jump to calling the current economic status a recession? Let's wait until we're actually there to start panting about it. I've never seen such an eager bunch of doomsdayers. Does it actually make you happy that we might be in a recession, is that why you are so eager to speculate about it?

I swear that the only reason we might end up in recession is because of over speculation about it. We are creating self-fulfilling prophecies here. Can we falsely prophecy something more positive? Maybe that would come true since we seem so good about turning speculation into reality.

Chill, dude...

That would be a really interesting point if Macro Advisers' monthly GDP estimate were actually down in April. It was not, unless you consider a 0.5% decline ANNUALIZED something worth talking about. When did we start annualizing monthly changes? The economy blows because of high oil mostly. But your bias is showing.