ain't no fortunate son

Distilling the Economic Data: No Recovery News

Thanks Steve, another unbiased if sobering compendium of facts rather than fairy dust chronicling the progression of this Great Recession.

I was interested by the New Residential Construction numbers for May and their big jump over April, the stuff of green shoots and wishful thinking. If one were to add up any two consecutive monthly new starts figures going back to last Fall, thereby smoothing the numbers somewhat for weather and other external factors, one would see that the April/May numbers were virtually unchanged from the March/April numbers, which were themselves abysmally low... and this coming into the peak residential home buying season. That's progress, that's a bottoming? Maybe if we were in the dead of winter those would be good numbers.

New residential mortgage originations for Q2 (nearly completed)? Abysmal.

Industrial Production? Abysmal, and look at the rapidly widening spread between capacity and production, the largest gap since at least the 1960's, and the 17% fall in production since 2007 is now the worst since the G.D. and wind-down of WW2 production as the War neared its end. Utilization? Draw some trend lines -Collapsing.

With a middle class that is absolutely shell-shocked and on life support due to the collapse of their real estate, credit access and retirement assets, and suffering a high proportion of the ongoing job losses that are still at near record levels (quibble all you want about a few K here and there when we're looking at numbers in the hundreds of thousands) how one can see a quick return to "normalcy" is beyond me.

This is a multi-generational catastrophe the likes of which very few of us now alive have ever experienced. How we can make assumptions about recovery timelines when many of the metrics are still dropping, some rapidly, is just beyond rationalization in my opinion.