Great Recession Datapoint of the Day

From this morning’s atrociously bad GDP report:

Exports collapsed 30 percent, the biggest decline since 1969, after dropping 23.6 percent in the fourth quarter. The decline in exports knocked off a record 4.06 percentage points from GDP.

By my reckoning, that means exports are now running at half the level they were at six months ago, more or less. (These are absolute drops, right, not annualized rates?) That’s a pretty startling sign of how global this recession is, and how hard it’s going to be to turn things around.

Yes, the massive decline in inventories is probably good news. But it’s really hard to see a -6.1% headline figure as anything but a brutal sign that things are continuing to get much worse than almost any mainstream economist (or government stress-tester, for that matter) dared fear.

Comments

[wavelength:]

Why do people ignore bad news? To see the blind eyes being turned to numbers this grim and significant is baffling - and a tad frustrating - to some of us, but the fact is that every day people manage to "tune out" negative data and go on doing things they know are bad for them - smoking, drinking in excess, using tanning beds, and so forth. Health education experts have finally got over believeing that all they need to do is communicate the facts better, because research shows that folks know darn well how harmful such behaviors are. They just happen to care more about social norms and peer reactions. Social discourse veers ever more left and the media and public are still in love with Obama. It is just not cool right not to drink the kool aid - even if somewhere deep inside we do actually recognize that all that sugar and food coloring cannot be good for us.

Apr 29 05:05 PM

[wavelength:]

Oops - meant "just not cool right now not to drink the kool aid."

Apr 29 05:07 PM

[Owen:]

That was a quote from Felix. I was actually showing why that is incorrect.

We are only 30% below the all time peak, which is pretty typical of long recessions. But of course, people love to panic, given half a chance.

On Apr 29 01:36 PM schlumpf wrote:

> Owen wrote : By my reckoning, that means exports are now
> running at half the level they were at six months ago, more or
> less.
>
>
> how far away is the total collapse ????

Apr 29 06:04 PM

[Nik Kondrat...:]

And yet the market is up and there are "signs" of a bottoming. It makes no sense.

Apr 29 09:58 PM

[Jasper M:]

Missing
Actually, socionomics says markets Are based on confidence. And i tend to agree. at least in the short rum.
And You just made me defend Cetin. I will never, Never forgive you for this - : )

So, to balance things out . . .
Schlumpf -
"Has Cetin hypnotised the fund managers ?"
I can just see that:
"You are getting Stupid . . . Stuuuupiiid"

Apr 29 10:44 PM

[No Free Cake:]

If consumer purchasing is actually up, then why are the State's sales tax revenues going down so much?

www.reuters.com/articl...

Apr 29 11:46 PM

[Steve W fro...:]

On Apr 29 03:48 PM Lilguy wrote:

> The trade figures highlight the absence of "decoupling" in the global
> economy, a commonly accepted them only a year ago.
>
> Like Felix, I'm more than a little perplexed by the positive spin
> being put on the decline in inventories. As the layoff and deflation
> numbers point to, this was accomplished by selling what was on hand
> at deeply discounted and producing next to nothing. Moreover, this
> addresses virtually only the manufacturing sector, which has been
> declining here for decades. And looking forward just a month or two
> at the auto industry, I anticipate manufacturing of autos will decline
> even further--first through the all-summer layoffs at GM and then
> through major re-orgs or bankruptcies at GM, Chrysler, and maybe
> Manufacturing has grown consistently, it is manufacturing employment that has declined reflecting increasing productivity.

Apr 30 01:13 AM

[Dave Wrixon:]

It not hype. Americans really do believe they are better than everyone else.

The problem is that if they are going to have a ghost of a chance of turning this thing around, they are going to have to seriously think about how they can get themselves into a position to compete with the rest of the World.

These two positions are oceans apart, and it will take a decade to get the political resolve that it is required to even start addressing these problems, and then at least another decade to make significant progress. In the meantime the economy will lurch from one crisis to the next, as the solution to one problem becomes the cause of the next.


On Apr 29 05:05 PM wavelength wrote:

> Why do people ignore bad news? To see the blind eyes being turned
> to numbers this grim and significant is baffling - and a tad frustrating
> - to some of us, but the fact is that every day people manage to
> "tune out" negative data and go on doing things they know are bad
> for them - smoking, drinking in excess, using tanning beds, and so
> forth. Health education experts have finally got over believeing
> that all they need to do is communicate the facts better, because
> research shows that folks know darn well how harmful such behaviors
> are. They just happen to care more about social norms and peer reactions.
> Social discourse veers ever more left and the media and public are
> still in love with Obama. It is just not cool right not to drink
> the kool aid - even if somewhere deep inside we do actually recognize
> that all that sugar and food coloring cannot be good for us.

Apr 30 01:19 AM

[guymar:]

I am slightly disappointed generally by seekingalpha that technical analysis is so much ignored. A "regular" user like me is even "prohibited" from writing a article about it. When it comes to fundamentals on the other hand, anything goes: articles like these are really no good if the people who write them ignore the meaning of the macro-economic figures in them, and even worse, do not know how to do the math (congrats Felix Salmon for demonstrating your lack in ability on that level) or how they are compiled (thank you Bricky for shedding some light on that). I have been practicing Elliott Wave Analysis for 20 years now, applied Gann for 5 years and when I see what happens know, I am really not worried. A serious bottoming process is not just touch-go-and-away, it happens in 2 or 3 moves. Look at the September-October 2001 rally and you will see this (the bear market) is far from over, but the counter trend rally can bounce a lot higher. Yesterday the market bounced for no apparent reasons, except for the fact that we consolidated around a Gann based resistance line, and normally this acts as a slingshot. Will it last? I do not know. Why does it happen: I do not know. And yesterday, after reading the macro-figures (btw: someone sold 8 mio DIA's 4 minutes before the announcement in pre-market trading, surely no coincidence) I made a huge mistake: I didn't go long immediatly despite what I could read in the charts, 50% of day profits tossed away. Anyway, my point is: if academics can start to dig into technical analysis and come up with algorithms mimicking (and get results) why can't it be a topic here. Perhaps an idea for Felix Salmon....

Apr 30 02:04 AM

[guymar:]

correction: I should have written: "roughly 8 mio dollars worth of DIA"

Apr 30 02:07 AM

[Jasper M:]

Guymar
Thank you for that post, from a fellow Elliotteer. I had no idea technical analysis was unwelcome here.
Though that can't be completely true - I see references to Moving Averages all the time, so Some technical speak is clearly allowed.

All I can tell you is what I told Trader Mark - Patience. Vindication comes. And remember, it's hardly a tragedy for you - the less people who understand your methods, the less people can front-run your trades.
Have you considered trying your luck at Minyanville? I am sure i have seen technical articles there.

Apr 30 02:56 AM

[guymar:]

Thank you for the words of encouragement, but actually, as trading is where I make my money with (or try to), I am trying to cut back on writing :-) so Minyanville would be out for the moment .....

On Apr 30 02:56 AM Jasper M wrote:

> Guymar
> Thank you for that post, from a fellow Elliotteer. I had no idea
> technical analysis was unwelcome here.
> Though that can't be completely true - I see references to Moving
> Averages all the time, so Some technical speak is clearly allowed.
>
>
> All I can tell you is what I told Trader Mark - Patience. Vindication
> comes. And remember, it's hardly a tragedy for you - the less people
> who understand your methods, the less people can front-run your trades.
>
> Have you considered trying your luck at Minyanville? I am sure i
> have seen technical articles there.
>
>

Apr 30 04:55 AM

[damienhaas:]

Also remember that confidence can be shattered in a moment of shock......


On Apr 29 10:44 PM Jasper M wrote:

> Missing
> Actually, socionomics says markets Are based on confidence. And i
> tend to agree. at least in the short rum.
> And You just made me defend Cetin. I will never, Never forgive you
> for this - : )
>
> So, to balance things out . . .
> Schlumpf -
> "Has Cetin hypnotised the fund managers ?"
> I can just see that:
> "You are getting Stupid . . . Stuuuupiiid"

Apr 30 06:07 AM

[guymar:]

Here are the guidelines:

What are Seeking Alpha’s guidelines for article publication?

* Be specific

Write about a particular stock, sector, or ETF - not general market commentary. Write about companies that are traded on U.S. exchanges. Avoid recaps, news rehashes, or macro-economic overviews.

* Be fundamental, opinionated and logical

Address the company’s competitive environment, management, products, corporate strategy, earnings outlook, valuation and/or balance sheet.

We do not publish pure technical analysis,

nor do we publish articles that offer merely conjecture.

=> to me this actually means technical analysis is considered pseudo-conjecture by the person writing the guideline .....

Rather, we look for informed opinion based on rigorous analysis presented in a clear and cogent manner. We welcome ‘long cases’ and ‘short cases’ for stocks, but please be sure to provide sound, in-depth reasoning for your positions.


On Apr 30 02:56 AM Jasper M wrote:

> Guymar
> Thank you for that post, from a fellow Elliotteer. I had no idea
> technical analysis was unwelcome here.
> Though that can't be completely true - I see references to Moving
> Averages all the time, so Some technical speak is clearly allowed.
>
>
> All I can tell you is what I told Trader Mark - Patience. Vindication
> comes. And remember, it's hardly a tragedy for you - the less people
> who understand your methods, the less people can front-run your trades.
>
> Have you considered trying your luck at Minyanville? I am sure i
> have seen technical articles there.
>
>

Apr 30 09:12 AM

[jerrion:]

Yes that is correct. Exports are not running at half the rate of 6 months ago as the author thought. Instead they are now running about 14.5% below the level of 6 months ago.


On Apr 29 03:56 PM jerrion wrote:

> Amounts are taken from the BEA GDP table for 1st quarter 2009. Amounts
> are in billions of chained (2000) dollars.
>
> exports for 3rd Q 08 seasonally adjusted annual rate was 1,556.1billion
>
>
> exports for 1st Q 09 seasonally adjusted annual rate was 1,331 billion
>
>
> half of the rate 6 months ago would mean an annual rate of 1,556.1
> / 2 = 778.05 billion
>
> 1,331 billion annualized export rate in the 1st quarter is a far
> cry from 778.05 billion

Apr 30 09:32 AM

[Gregman2:]

It's all a function of debt, ability to service debt, and purchasing power. The news is not really good yet, for business or the consumer.

Apr 30 11:31 AM

[MGA_1:]

So the news isn't "awful" and the market goes up ! Looks like a very strong bear market rally that will eventually return to the downside.

Apr 30 11:34 AM

[Jasper M:]

guymar
That is amazing! Right there in the guidelines, pretty much explicitly stated, no respect for technical analysis.

Apr 30 01:10 PM

[John Lounsbury:]

Jasper M, guymar - - -

Perhaps SA could be persuaded to open a separate forum dedicated to articles on technical analysis.

Apr 30 01:26 PM

[TraderJoe100:]

His comments are not offensive I think, just mindless.


On Apr 29 09:20 PM Missing_Link wrote:

> > [Cetin Hakimoglu]

May 01 04:33 AM