Bad And Ugly: 2 More Charts That Suggest Recession

Includes: DIA, SPY
by: Harold Fredrick

I don't care what the pundits say. We're in recession. There's a preponderance of evidence indicating as much. This past fall, I posted a number of charts that suggested recession. First, I posted a chart of imports, exports, GDP growth. Then, I posted a chart of the "indicator of indicators", the Philly Fed ADS. Next, I posted the Manufacturing ISM. You get the idea. Notable investment strategist Albert Edwards of Societe Generale called recession back in Novemeber, and, today, I present 2 more charts that suggest the economy is contracting:

First, we have a "bad" chart: U.S. manufacturing revenues. As you can see on the chart, in the past 30 years, manufacturing revenues have rarely gone negative during periods in which the economy as a whole wasn't contracting. In fact, with the exception of 1986, the economy has been in recession each time the indicator has been this low.

(Click to enlarge)

Next, we have an ugly chart: NFIB Optimism, the sentiment of the nation's small business owners. According to this chart, America's small business owners are feeling about as bad about business conditions as they did in the months leading up to the financial crisis. Some of the highlights from the current NFIB small business optimism report: small biz owners expect reduced economic activity, reduced earnings, and deteriorating credit conditions in the coming months.

(Click to enlarge)

Happy recession -- I mean "recovery" -- America!

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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