Bank of Canada: The "Recession" is over!

[LargoWinch]

Re: Bank of Canada: The "Recession" is over!

remember how much shit they caught for that when they reopened?

Whoa. cool stuff alert.

[metalman]

Re: Bank of Canada: The "Recession" is over!

Some years ago I read his biography "The Mind of Wall Street". In it he wrote about the post-Nasdaq bubble contraction in consumption, the potential for a rise in the USA savings rate, and concluded that the USA was headed for a depression [that's the word he used]. However, just like EJ he never anticipated the Fed would re-flate using residential housing as the new "object of desire". He thought the depression started with the 2001 recession.

I have often wondered what did people, like you, who discovered iTulip in the 1990's do when EJ decided that his work was done and the site went dark early this decade? I have no idea what I would do if this site went dark today...

glad i'm not the only guy here who remembers that... from itulip's about page march 2006...

Fast forward to March 2006. The NASDAQ has mostly stayed in the dumper, with various dot com stinkers sinking and disappearing into the history books, again, predictably. The DJIA, by a combination of a re-constitution of the easily manipulated 30 stock index -- throwing out some losers and adding in some winners -- and inflation has fought its way back to where it was six years ago – flat. Except that, adjusted for inflation, it is down at about 20%. But that hasn't kept Cramer from returning to CNBC to rant and throw chairs around while touting the latest "can't lose" stocks. Not coincidentally, gold has gone up, as we forecast in 2001 when gold was trading near 20 year lows and widely derided as a loser investment class. But what really kept the U.S. out of poorhouse, if only until now, was the housing bubble. But not only did we fail to predict the housing bubble in 2001 as the Fed's answer to the stock market bubble collapse, we argued that the Fed would never allow one to develop.

Wrong.

Our thinking was that in the past the Fed has been very quick to stop speculation in real estate, much more quickly than stock market speculation. Why? Real estate involves the banking system much more than the stock market bubble did and looking after the banking system is Job One for the Fed. Letting millions of homeowners buy real estate they can't afford with mortgages they can never pay back is a surefire road to mass defaults that can cripple the banking system.

remember how much shit they caught for that when they reopened?

geez, now everyone knows that!

and now...
It's logical ... the handful of economists who were intelligent and educated enough to predict the GFC are the only people qualified to predict the next 2-5 years ...

[LargoWinch]

Re: Bank of Canada: The "Recession" is over!

I think we'll have a slight double dip. Hopefully only slight. I really don't relish the idea of another deep recession. I'm more hopeful than optimistic though.

Muddy forecast, but that's a start.

1oz of Au that the S&P500 is lower in terms of Crude Oil in 36 months (real terms)? Seems like a sure loser right? After all, recession is over.

Or perhaps blaze, you may want to watch this and reconsider? ;)

[GRG55]

Re: Bank of Canada: The "Recession" is over!

We have a resource based economy. We're going to do fine....

I think I said much the same, with some caveats, in my first post on this thread...

...All I can say is I am glad I live in Western Canada. When the inflationary poom inevitably becomes so visible even the blind can see it [and yes, it will be a "big surprise" to Carney, Flaherty, and the MSM] at least the core resource industries around here [what's left of them] will be able to pass on their price increases to consumers. Until Ottawa mandates price controls that is...

...The fundamentals of the Canadian economy are sound .. 30M people in the 2nd largest nation on the planet sharing a border with the richest nation on the planet. Seriously, how it is that we ever went into a recession I do not know.

I think our biggest problem is we get lazy because we are so damn lucky.

We got into recession because that "richest" nation next door got into a recession. Regardless of how much we might wish to reduce our dependence on the USA and trade more with Europe [a favourite of the Quebec Liberals] or with Asia [popular refrain in some quarters of the West] the fact remains that the USA is, and will remain, our biggest market. And without a strong economy in the USA there's no possible way there will be a strong economy in Canada.

And yes I agree that we are lucky to be Canadians. With any luck we can muddle through while the USA finds its way...

[blazespinnaker]

Re: Bank of Canada: The "Recession" is over!

The Bank of Canada's expensive econometric models failed it miserably last year. I don't have any reason to believe that there's been any great makeover in their methods in the intervening months, so I don't have any confidence there is any durable recovery underway in Canada...yet.

We have a resource based economy. We're going to do fine. BRIC / etc is growing like a weed again and is plowing money into commodities. The fundamentals of the Canadian economy are sound .. 30M people in the 2nd largest nation on the planet sharing a border with the richest nation on the planet. Seriously, how it is that we ever went into a recession I do not know.

I think our biggest problem is we get lazy because we are so damn lucky.

[blazespinnaker]

Re: Bank of Canada: The "Recession" is over!

Fine with me. Are you taking the other side of that bet for posterity then blaze? Because being accountable is a two-way street... ;)

I think we'll have a slight double dip. Hopefully only slight. I really don't relish the idea of another deep recession. I'm more hopeful than optimistic though.

[GRG55]

Re: Bank of Canada: The "Recession" is over!

levy was listed as one of the 'gang of 11' who got it right.

Some years ago I read his biography "The Mind of Wall Street". In it he wrote about the post-Nasdaq bubble contraction in consumption, the potential for a rise in the USA savings rate, and concluded that the USA was headed for a depression [that's the word he used]. However, just like EJ he never anticipated the Fed would re-flate using residential housing as the new "object of desire". He thought the depression started with the 2001 recession.

I have often wondered what did people, like you, who discovered iTulip in the 1990's do when EJ decided that his work was done and the site went dark early this decade? I have no idea what I would do if this site went dark today...

[metalman]

Re: Bank of Canada: The "Recession" is over!

BTW blazespinnaker, if you are a fan of the ECRI work you may want to also check out The Levy Economics Institute of Bard College publications. In this most political of political economies its "public policy oriented" work may be of interest.

The ECRI's Lakshman Achuthan is a director of the Levy Institute.

levy was listed as one of the 'gang of 11' who got it right.

[GRG55]

Re: Bank of Canada: The "Recession" is over!

BTW blazespinnaker, if you are a fan of the ECRI work you may want to also check out The Levy Economics Institute of Bard College publications. In this most political of political economies its "public policy oriented" work may be of interest.

The ECRI's Lakshman Achuthan is a director of the Levy Institute.

[GRG55]

Re: Bank of Canada: The "Recession" is over!

in march ej started saying the 'recession' will 'end' in q3 this year in the peak quarter for the stimulus impact... put up the goldman chart...



but i don't understand... how does the contribution of the stimulus turn negative in Q3 and q4 2010? :eek: does ej explain?

There's no free lunch.

There is a cost to borrowing such a gargantuan sum of money from foreigners to fund all manner of Democrat pork [remember how this "stimulus" package was formulated and who the key players were]. Goldman probably thinks that the costs of the package will start to act as a drag on the economy by the time the '10 mid-terms roll around.

StimPAC II anyone???? :cool:

[metalman]

Re: Bank of Canada: The "Recession" is over!

"The Recession" may be over...in other words trillions upon trillions of dollars of government stimulus all over the world will undoubtedly create a positive GDP result in most economies - for at least a few quarters...but this economic contraction is far from over and any self-sustaining economic growth in most of the developed economies would not appear imminent.

I actually have a lot of respect for Lakshman Achuthan [who is the son-in-law of the late Wall Street legend Leon Levy] but you may want to recall that the ECRI repeatedly and actively argued against the calls by others that the USA was already in recession in early 2008, until it belatedly changed its mind on March 20, 2008.

The ECRI was watching the usual indicators such as the low business inventories in late 2007 [one of the same indicators that fooled Don Coxe] and completely missed the debt deflation aspect of this downturn.

I too wish I had a crystal ball, for in that event I also would be rich. But as EJ has shown the really big turning points can be seen with clarity well before the fact if one has ones eyes and ears open.

The Bank of Canada's expensive econometric models failed it miserably last year. I don't have any reason to believe that there's been any great makeover in their methods in the intervening months, so I don't have any confidence there is any durable recovery underway in Canada...yet.

in march ej started saying the 'recession' will 'end' in q3 this year in the peak quarter for the stimulus impact... put up the goldman chart...



but i don't understand... how does the contribution of the stimulus turn negative in Q3 and q4 2010? :eek: does ej explain?

[GRG55]

Re: Bank of Canada: The "Recession" is over!

Interesting, so you guys all confidently believe that the recession isn't over? Do you mind if I quote you for posterity?

I guess ECRI is a bunch of morons too?

I wish I had the crystal ball everyone else seems to have. I'd be rich!!

"The Recession" may be over...in other words trillions upon trillions of dollars of government stimulus all over the world will undoubtedly create a positive GDP result in most economies - for at least a few quarters...but this economic contraction is far from over and any self-sustaining economic growth in most of the developed economies would not appear imminent.

I actually have a lot of respect for Lakshman Achuthan [who is the son-in-law of the late Wall Street legend Leon Levy] but you may want to recall that the ECRI repeatedly and actively argued against the calls by others that the USA was already in recession in early 2008, until it belatedly changed its mind on March 20, 2008.

The ECRI was watching the usual indicators such as the low business inventories in late 2007 [one of the same indicators that fooled Don Coxe] and completely missed the debt deflation aspect of this downturn.

I too wish I had a crystal ball, for in that event I also would be rich. But as EJ has shown the really big turning points can be seen with clarity well before the fact if one has ones eyes and ears open.

The Bank of Canada's expensive econometric models failed it miserably last year. I don't have any reason to believe that there's been any great makeover in their methods in the intervening months, so I don't have any confidence there is any durable recovery underway in Canada...yet.

[D-Mack]

Re: Bank of Canada: The "Recession" is over!

If a recession is defined as two or more consecutive quarters of negative economic growth, then technically we may be out of the recession.

That, however, only underscores the need for better definitions, in my opinion.

That's what Roubini said, it may not be a recession but it would feel like one.



Starting at 9 minutes
The economy: Nouriel Roubini, New York University; Mort Zuckerman, U.S. News and World Report; author Niall Ferguson ("Ascent of Money")

[Ghent12]

Re: Bank of Canada: The "Recession" is over!

Interesting, so you guys all confidently believe that the recession isn't over? Do you mind if I quote you for posterity?

I guess ECRI is a bunch of morons too?

I wish I had the crystal ball everyone else seems to have. I'd be rich!!

If a recession is defined as two or more consecutive quarters of negative economic growth, then technically we may be out of the recession.

That, however, only underscores the need for better definitions, in my opinion.

[LargoWinch]

Re: Bank of Canada: The "Recession" is over!

Do you mind if I quote you for posterity?

Fine with me. Are you taking the other side of that bet for posterity then blaze? Because being accountable is a two-way street... ;)