The Recession Never Truly Ended

A wide array of supposedly smart people are now informing us that the economy is slowing and may slip back into recession. The new phrase being used to describe our economic condition is ‘stall speed’.

Well how about that? Stall speed, they say. Is the economy truly slowing? Is it really?

Or perhaps did the real economy, that is the one in which we live and operate, not the one fabricated by Wall Street pundits and Washington politicians never truly rebound?

I ask because I firmly believe that our domestic economy never truly rebounded in a meaningful fashion over the last few years.

I cautioned people to avoid the regular smoke and mirrors emanating from our financial and political hotbeds in spring 2010, and have continued to caution since, when I first equated our economic malady as akin to “walking pneumonia“.>>>>>>>>

I wrote then, U.S. Economy = “Walking Pneumonia”,

I strongly recommend that people not get caught up in the daily, weekly, or even monthly reports. Take a step back and look at things from a quarterly, semi-annually, and annual basis. Let’s work a little harder to eliminate the noise in figures so we can grasp the fact that the economic road in front of us will remain long and hard.

We were not healthier then and we are not meaningfully healthier now. How do we know?

We received a more honest and complete economic reading a few days ago in the revisions to prior year’s GDP reports. These reports received limited attention.

How can we accurately measure our current condition if we do not appreciate and understand the depth of our ‘walking pneumonia’? We can’t although the aforementioned strategists and Washington wizards would rather you not know that.

On that note, let’s look at the report released by the Bureau of Economic Analysis last week highlighting the fact that our recession ran deeper then and, in my opinion, continues to significantly impact us now. The BEA recently released,

For 2007-2010, real GDP decreased at an average annual rate of 0.3 percent; in the previously published estimates, real GDP had increased at an average annual rate of less than 0.1 percent. From the fourth quarter of 2007 to the first quarter of 2011, real GDP decreased at an average annual rate of 0.2 percent; in the previously published estimates, real GDP had increased at an average annual rate of 0.2 percent.

Negative real GDP readings to me spell one thing. We have never officially gotten out of recession despite all the sugar highs produced by Uncle Sam and executed by his boys, Ben and Tim.

Talk of green shoots, V-shaped recovery, and assorted other tricks were designed by those who are more interested in your vote, your spending, your purchasing overpriced securities, and your daily trading than your long term economic well being.

As an eternal optimist, though, let me also share with you how I concluded my March 2010 commentary referenced above,

We’ll make it. I am fully confident. That said, much like those with ‘walking pneumonia,’ we need to take care of ourselves rather than allow the daily spin to trick us into believing we are healthier than we really are.

About Larry Doyle 522 Articles

Larry Doyle embarked on his Wall Street career in 1983 as a mortgage-backed securities trader for The First Boston Corporation. He was involved in the growth and development of the secondary mortgage market from its near infancy.

After close to 7 years at First Boston, Larry joined Bear Stearns in early 1990 as a mortgage trader. In 1993, Larry was named a Senior Managing Director at the firm. He left Bear to join Union Bank of Switzerland in late 1996 as Head of Mortgage Trading.

In 1998, after 15 years of trading and precipitated by Swiss Bank’s takeover of UBS, Larry moved from trading to sales as a senior salesperson at Bank of America. His move into sales led him to the role as National Sales Manager for Securitized Products at JP Morgan Chase in 2000. He was integrally involved in developing the department, hiring 40 salespeople, and generating $300 million in sales revenue. He left JP Morgan in 2006.

Throughout his career, Larry eagerly engaged clients and colleagues. He has mentored dozens of junior colleagues, recruited at a number of colleges and universities, and interviewed hundreds. He has also had extensive public speaking experience. Additionally, Larry served as Chair of the Mortgage Trading Committee for the Public Securities Association (PSA) in the mid-90s.

Larry graduated Cum Laude, Phi Beta Kappa in 1983 from the College of the Holy Cross.

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