THE PHILLY FED’S RECESSION WARNING
Just how bad was yesterday’s Philly Fed reading? According to David Rosenberg it was so bad that it virtually guarantees a new recession:
“The Philly Fed index was the real shocker. Instead of coming at a +2 as the wonderful consensus was foreshadowing, it came in at -30.7. That is the second negative reading in the past three months, so with all the deference to the industrial production reporting of the other day, manufacturing looks set to contract. As the chart below illustrates, never before has the Philly Fed been at this level without there being a recession – will it really be “different this time around”? Well, Bill Dudley at the Fed seems to think so. Without going into the gory details, almost every component was negative – not just down, but below zero. This is a one in 10 event, and this breadth is itself consistent with a 90% chance of outright recession.”
Ouch.
Source: Gluskin Sheff
Another recession indicator: FAZ, a german newspaper, counted the occurrence of the word “recession” in its issues of the past decades. It turned out that this was an early indicator of an recession. And right now this indicator also proposed a recession.
uber-bear me does have to point out the empire state manufacturing indicator is more accurate and not quite as bad.
but………………were in the toilet anyway.
going back into a recession??? Shouldn’t the question be is the current recession worsening?
Yes!
Just depends on your definition. If by recession you mean contracting, then no (since we stopped contracting, plateauing virtually at the bottom). If by recession you mean contracting and then plateauing in the valley and then continuing to contract after the period of plateau, then yes. The point is academic, a matter of semantics. As a matter of observation it seems to me people are using the term in the former sense. Regardless, the real issue is we all need to be concerned, particularly since there is no solution coming down the pipe. Until the monetary system is understood or until we get lucky, we’re SOL.
Just wait til September, Obama will unleash the Shock and Awe of Stimulus.
Another Year of unemployment bennies should do the trick.
Just wait til September, Obama will unleash the Shock and Awe of Stimulus.
Another Year of unemployment bennies should do the trick.
Cullen, Can we draw any conclusions about QE2 by the Philly Fed’s report?
Did it help or hurt or was it a total wash (in your opinion)?
Thanks
I’m a little late to the comment section on this one, but I was at a gathering this weekend and listened to people talking. The conversations were that we never came out of recession to the USA is experiencing a depression. These are the same conversations I was hearing in the spring to early summer of 2008 and we all know what happened next. It should be interesting to see how this all plays out.