Comments on: Looking beyond the fake recovery http://www.creditwritedowns.com/2009/08/looking-beyond-the-fake-recovery.html Finance, Economics and Markets Fri, 10 Feb 2012 00:37:00 +0000 hourly 1 By: kbob http://www.creditwritedowns.com/2009/08/looking-beyond-the-fake-recovery.html#comment-5997 kbob Fri, 14 Aug 2009 03:58:29 +0000 http://www.creditwritedowns.com/2009/08/looking-beyond-the-fake-recovery.html#comment-5997 Great article. Please keep up the great writings. We enjoy it greatly. The recovery is indeed bogus. As Marc Faber put it, a recession/crisis is meant to clean the system, but to date, nothing has been cleaned. Artificial stimulants can postpone the crisis to a later date but it will only be that much bigger and more violent. Too bad "experts" these days cannot see beyond what first meets the eye Great article. Please keep up the great writings. We enjoy it greatly.
The recovery is indeed bogus. As Marc Faber put it, a recession/crisis is meant to clean the system, but to date, nothing has been cleaned. Artificial stimulants can postpone the crisis to a later date but it will only be that much bigger and more violent. Too bad “experts” these days cannot see beyond what first meets the eye

]]> By: bob_in_ma http://www.creditwritedowns.com/2009/08/looking-beyond-the-fake-recovery.html#comment-5996 bob_in_ma Thu, 13 Aug 2009 20:24:13 +0000 http://www.creditwritedowns.com/2009/08/looking-beyond-the-fake-recovery.html#comment-5996 I generally agree. Although most of the people who see recovery at hand acknowledge that debt levels will pose a problem, they seem to sidestep the question of just how this problem will be resolved. This to me is the crux: real retail sales and industrial production have both fallen to the levels of 1999, and even with the stimulus rebates and payments, personal income has fallen YoY for the first time on record. But in 1998, private nonfinancial debt was less than 140% of GDP, at the end of 2008 it was more than 190% of GDP. The positive effects of the end of inventory draw downs, the cash-for-clunkers payouts, etc., are all well and good, but it's hard to see how they solve the problem of deleveraging. For that matter, it's hard to see how the debt problem is addressed meaningfully by your Q4/Q1 forecast. I generally agree. Although most of the people who see recovery at hand acknowledge that debt levels will pose a problem, they seem to sidestep the question of just how this problem will be resolved.

This to me is the crux: real retail sales and industrial production have both fallen to the levels of 1999, and even with the stimulus rebates and payments, personal income has fallen YoY for the first time on record.

But in 1998, private nonfinancial debt was less than 140% of GDP, at the end of 2008 it was more than 190% of GDP.

The positive effects of the end of inventory draw downs, the cash-for-clunkers payouts, etc., are all well and good, but it’s hard to see how they solve the problem of deleveraging.

For that matter, it’s hard to see how the debt problem is addressed meaningfully by your Q4/Q1 forecast.

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