15 July 2008

The Worst Economy Ever (h/t Glenn Reynolds)

Not only are they selling Apples on street corners, but people are lining up around the block to buy them.


Anonymous said...

I look around at all the construction in my town and wonder where the recession is as well.

David said...

We just got off a bus at the stop you can see in the picture and the line, at 5:40 and 93 degrees is, if anything, longer than it was this morning.

Harry Eagar said...

Looks to me like stagflation, despite all those magical tax cuts.

However, I'm not betting on inflation through the end of the year. I'm counting on deflation, big, big time.

Everybody who thinks you will get fewer shares of stock for $X in November than now, raise your hand.

Anonymous said...

But as Reynolds points out the growth numbers were recently adjusted upwards. You can't have stagflation without stagnation.

Harry Eagar said...

0.1% increase on retail sales is pretty close to stagnation, and since the increase was all borrowed from the Chinese, the real figure was negative.

You guys remind me of the fellow who jumped off the Empire State Building. As he passed the 50th floor, someone inside leaned out and yelled, 'Howya doin'?'

'All right so far.'

Anonymous said...

I see. Because the situation looks like stagflation to you, any other view or evidence is simply whistling before impact. And you mock the global warmenists!

Harry Eagar said...

Any other what evidence?

Consumer spending -- two-thirds of the economy -- is down. Take out the raging inflation in corn and oil and the other third is not exactly roaring.

I bet you think Russia's economy is expanding too.

Anonymous said...

Feeling a bit defensive, are we? You sound like OJ when one of his pet theories collides with reality.

Harry Eagar said...


You sound like someone ensnared in the money delusion, surprising in a person like you.

The value of oil and corn are up, but the volumes are down. This does not look like expansion to me.

Airlines, banks, construction, newspapers etc. are all crashing. Retailing is stagnant.

I'm trying to think of a sector that is expanding. dum dum dum. Hmmm.

Anonymous said...

Other evidence —

* officials projected that the rate of economic growth by the end of the year would be between 1% and 1.6%, up from 0.3% to 1.2% in their April estimates.

* The 2009 outlook was unchanged, with officials expecting growth between 2% and 2.8%.

* the expectation that overall inflation will moderate in 2009 and 2010

* Expectations for the unemployment rate, now 5.5%, was unchanged at 5.5% to 5.7%

At least I don't have to accuse people of delusion and utter ignorance on unrelated topics to state my case.

And as I understand your case, you consider the current economy to be indistinguishable from the 1970s stagflation, despite the higher growth, lower unemployment, and lower inflation, and that the economy is about to go bust on a scale equivalent to the Great Depression, and that anyone who doesn't also have this opinion is so stupid they think Russia is booming and is ensnared in a "money delusion". Did I get that right?

I might also point out the the topic under discussion is "are we in a recession today?". Future disasters, however large, have no bearing on that question. Yet you castigate me when I fail to them in to account on the subject. Hmmm.

Harry Eagar said...

As I have discussed at Restating the Obvious, by the official definition of recession, it cannot possibly start before October.

That hardly means everything is jake.

I think I'll ignore projections of where we will be in 2009 and 2010, on the grounds that projections made by the pros in 2006 and 2007 were laughably wrong.

I follow only one stock closely. It's an airline stock. It's up 33% this week.

I predict it will be in bankruptcy before the end of the year.

But I'd be interested to see your list of what sectors are expanding. I still cannot think of any.

Anonymous said...

What about computers / networking?

But that's irrelevant. In the end, after mocking my ignorance, you agree that I (and Mr. Cohen) are correct on the subject discussed here.

I also think there's a bit of space between "everything is jake" and a repeat of the Great Depression, although those seem to be the only two opinions you will debate.

Harry Eagar said...

Since you don't agree with my view about the Great Depression -- that it began in 1922 with the collapse of agriculture -- I suppose it would be unrealistic to suggest that we are somewhere between 1922 and October 1929 in the unfolding crash, with important sectors collapsing while others are apparently (but not really) immune.

We'll see.

Hey Skipper said...

Expanding sectors.

Manufacturing, perhaps?

Something has to be expanding, because my company's freight loads to overseas destinations are up 10% year on year.

Harry Eagar said...

Obviously something is expanding if -- but only if -- it's true that the economy expanded 1% in the last quarter.

Subtract the money illusion and it's not so obvious it did expand.

Anyhow, I remember how scornful Orrin was about Japan's pitiful economic situation when its GDP was expanding more than 1%.

I went to an economic presentation today. One figure got my attention: the volume of CBMS (collateral backed mortgage securities) is down 91%.

Guy shouldn't count on seeing much construction in his town after projects that began before the financial crisis are completed.

As for airlines, here's a curiosity. Aloha Airlines cannot be replaced because: 1) planes are ordered ahead for years (not, of course, by American carriers--Chinese); 2) no investement capital; and 3) no incentive to form an airline to move travelers long distances for pleasure.