注 ：此为原作者发至许明星的邮件内容
电子周刊来自前沿的思考－中文版
| 衰退的风险 2010-06-25 作者：约翰-默登
衰退的风险 领先指标开始扭转 贸易比率和美国的实际国内生产总值 处在十字路口的伯南克 温哥华，缅因，旧金山 这一年已经过去了一半（时间到哪里去了？），现在该是对下半年做一些预测的时候了。本周，我们来看领先指标给我们传递的信息，再来看一个新的指标，然后顺便谈谈银行数据，等等。 很快，我下周四就要参加拉里-库德洛（Larry Kudlow）的节目了，具体时间是东部时间晚7点。拉里承诺，我们将会花一些黄金时间来谈论我们当前面临的问题。到时见！现在，言归正传。 衰退的风险 我曾说过，我认为我们有一半的可能会在2011年重新陷入衰退，理由是，我认为经济在今年下半年将会减慢，然后2011年的大幅增税（布什减税政策到期）会将我们重新推入衰退当中。 此推断的依据不是数据，而是表明减税或增税将对经济产生3倍乘数效应的研究结论。如果你施行相当于1% GDP的减税，这对经济的提振效果将达到3%。而增税则会起到相反效果。这是奥巴马的经济顾问委员会主席克里斯蒂娜-罗默（Christina Romer）与他的先生共同完成的研究，因此这并非一个共和党的结论。 如果经济到今年年末减慢至2%以下，那么大于1% GDP的增税就可以、也很可能成为临界点。再加上几乎相同数额的州级和地方一级的增税（还有开支削减），这足以爆发一次全面性衰退了-至少我是这么认为的。 在近期米兰的那次演讲上，有人向我提问，有什么情况可以令我的推断出错？有几点。第一点可能是增税和减税都不重要。一些非常聪明的人（像保罗-麦卡利）觉得，对富人增税并没有真正被涵盖在罗默的分析中。 或者，可能银行贷款开始回升，经济到今年年底的增长率能达到3-4%- 尽管下表显示银行贷款仍在自由落体。注意，如果该趋势再持续一些时间的话，银行贷款在大约两年内的降幅将达到25%。这是一张真正可怕的图表。在现代历史上是前所未有的。同时注意，自2001年衰退之后，银行贷款持续下降了超过两年半的时间。
或者，国会决定延长布什的减税政策或按阶段逐步施行增税。这会好一些，可能不会将我们重新推入衰退当中。也许他们投票支持加大刺激规模，尽管这看起来不太可能。如果国会都无法延长失业救济（本周发生的情况），那其它刺激也不太可能。 正在掌控经济政策的优伯凯恩斯主义者显然不认为大幅增税会有问题，或者如果他们真这么想，他们也不会说出来。他们正在没有进行麻醉的条件下对我们的经济体开展试验。这个预测是我比较有信心的：如果经济真地再度陷入衰退，他们将会归咎于增税以外的一些因素，并呼吁实行大规模的刺激。事实上，他们可能会说，问题就出在缺乏刺激上。保罗-克鲁格曼（Paul Krugman）一定会是拉拉队队长。 （去乔舒亚-布朗[Joshua Brown]的网站[The Reformed Broker] 阅读“纽约经济黑帮”这篇文章，乔舒亚描述了各种经济思想家团体，非常有趣，也非常具有启发性。好像我属于以我的朋友穆罕默德-埃里安为首的“新常态”帮派。克鲁格曼当然是新杰克凯恩斯主义派的首领，我认为他们是最恶毒、最有害的帮派。http://www.thereformedbroker.com/2010/06/24/econ-gangs-of-new-york/) 在过去两次衰退发生之前，收益率曲线都出现倒挂（短期利率高于长期利率），因此很容易预测出衰退。让我们来看我2007年2月16日那期通讯中的一张图表。注意三月期国库券的利率大概比10年期债券的利率高出45个基点，各种研究的分析正是以此为基础。收益率曲线自2006年9月以前就一直呈现倒挂现象，我在当时预测大约一年之后经济将会衰退。（收益率曲线倒挂是经济一年之后陷入衰退的最佳预言者。若出现像以下这样的收益率曲线，大约一年之后总是会发生衰退。）
目前的收益率曲线是这样子的。这是正常的（如果在美联储利率为0%的环境下有正常事物的话），虽然没有以前那么陡了，它还算是相当陡的。（彭博）
当美联储将利率控制在0%时，收益率曲线是不可能会倒挂的。当前的收益率曲线没有预示会发生衰退，而是表明，那些预见持续复苏的人是对的。 我并不这么乐观。上周在巴黎大卫-科托克的聚会上，我和马丁-巴恩斯（来自银行信用分析机构，是我认识的最优秀的一位经济学家）展开了辩论。马丁和我是非常好的朋友，但我们的意见往往会出现分歧。我们两人给听众创造了一个非常有趣的辩论组。 我的观点是，经济2011年有一半以上的可能会陷入衰退。马丁说（带着很浓的苏格兰口音）：“约翰，双谷衰退是非常罕见的。”他是对的。上一次（也是仅有的一次）双谷衰退出现在上世纪八十年代，是因为沃尔克为控制通胀而踩刹车导致的。 我的反驳理由是：我们当前所摆脱的并非一次正常的商业周期衰退。我们所经历的是一次债务危机和一次资产负债表、解杠杆型衰退。我们用来判断复苏的老数据在这里并不适用。而且还具有误导性。 它不只是房市危机，还是债务危机。我们目前正在削减那些债务。我们正走向这场债务大周期的终点（这是银行信用分析机构很久前发明的词汇）。现在，各个国家的政府债务泡沫正准备相继破灭。本为极为罕见之事（双谷衰退）已成为具有现实可能的事情。由于已经没有收益率曲线作为指导，就让我们来看看可以作为参考的东西吧。 领先指标开始扭转 即使在意大利度假期间，我还是会经常关注经济和投资讯息。几日之内，我看到几篇关于经济周期研究机构的每周领先经济指标指数的研究。该指数最近开始下降。Rather & Kittrell的乍得-斯达利伯（Chad Starliper）给我发来以下图表和分析。（在我度假期间有人帮我完成工作，我是很高兴的！） “经济周期研究机构最近发生了一些新闻。我做了一些研究，玩了下变动率，发现一些不太吉利的东西，你可能会感兴趣。正常报告的增长率是一个平滑每周领先指数的年度比率。然而，当使用13周折成年率的变动率时-短期势头-增长已下降到-23.46％，非常微弱。该指数曾下降如此迅速的其它时期是什么时候？都是在衰退期或预示短期内即将发生衰退的时期（2000年12月）。＂
乔纳森-泰伯（Jonathan Tepper，我下部书的合著者）给我发来蒙特利尔的EMphase金融集团著写的一篇文章。此文是在四月写的，当时每周领先经济指标刚刚开始有转变。他们发现了一些数据，似乎对于预测美国经济12个月以后的发展趋势非常有用。让我们来看看部分内容： 贸易比率和美国的实际国内生产总值 ＂许多市场参与者在辩论未来几个季度内是否会发生双谷衰退。在我们写这篇报告的同时，经济周期研究机构的每周领先经济指标从四月的134.7迅速下降到 122.5。在过去二十年中，该指标一直都领先美国的实际年度GDP 6个月。然而，经济周期研究机构的每周领先经济指标最近变得相当不可靠，四月份年同比上升到25%，这个水平对应的美国实际GPD年同比增长率为8%，这是不实际的。你可以在以下左图中发现问题。
“我们发现一个新的领先指标来预测美国的实际GDP年同比增长率，就是美国的贸易比率。这被定义为出口价格与进口价格之比。我们很高兴成为首个论证者，至少是公开的。在以上右图中，贸易比率领先美国的实际GDP年增长率12个月。唯一的缺点：基础的时间系列是每月而不是每周，但这对于那么多的领先时间来说不是什么问题。此外，如果我们扩大到最大的数据（1985年），这个关系仍能够保持。” 他们的结论？ “你之前可能已经注意到，贸易比率预示美国的实际GDP年同比增长率在未来12个月内将会下降至接近0%。将于7月30日发布的折成年率之后的2010年第二季度季度同比实际GDP增长率可能达到预期，因为它反映的是过去三个月的数据，总的来说都是正数。然而，我们未来几个季度中最有可能会看到较弱的数字。这会不会导致双谷衰退？我们认为未来9-12个月内发生双谷衰退的可能性是极小的，但到2011年可能会增加至50%, 取决于我们所追踪的变量在未来数月里的变化情况。＂ 让我们以数据专家好友多伦多Gluskin Sheff的大卫-罗森伯格的下面这段话来结束有关领先指标的讨论。 “在截至6月11日的那一周，经济周期研究机构的领先指数（增长率）连续第六周下滑，从-3.7%下滑至-5.7%。该指数在过去只有一次没有预示到衰退，是在1987年，但当时美联储可以减息。但-5.7％的数字正确预示了过去七次衰退。
“多数意见认为今年下半年的实际GDP增长将有3%，但如图2显示，经济周期研究机构的数据在 -5% 到 -10%区间对应的GDP年增长率平均为+0.8%。因此，现在的选择要么是重现2002年的增长类型，要么是二次衰退。”
我所认为的是，布什在2001年和2003年两度减税是为了应对疲弱的经济环境。除非某些事情发生变化，我们将会制定美国历史上幅度最大的增税。州和地方一级政府将会实行同样规模的增税和开支削减。根据以上研究表明，这次增税的背景环境可能会是，经济增长处在1%的范围内，而失业率仍保持在9-10%的范围内。延长失业救济对于很多人来说将成为遥远的历史。房市仍将低迷（在下周的《跳出思维定式》中会详细讨论），房价很可能会从当前的水平下跌。 首季度的增长被调降（再次！）至2.7%，或者大概是去年第4季度的一半左右。被计算为增长的有很大部分都是库存重建和刺激性开支。基础经济也许比标题数字显示的情况更弱。到第四季度，刺激性开支会很少。 鉴于以上，我认为我们有必要将2011年发生衰退的可能增加至60%，这个可能性将会随着未来两个季度的经济表现情况上升或下降。 增税的影响重大与否？我们拭目以待。 如果我是错的，那我将会错得很壮观。我希望自己是错的。但你还是得根据自己的真实判断来预测。 处在十字路口的伯南克 我走到十字路口，双膝跪地 如果我对衰退的预测是正确的，这会将本-伯南克和美联储逼到一个非常艰难的十字路口。衰退是具有通缩性的。但是通胀率很长一段时间以来一直就很低了。核心消费者物价指数小于1%。达拉斯联邦储备银行的修剪均值通胀指数在过去6个月中下降到0.6%。 如果我们陷入衰退，美国是相当有可能发生彻底通缩的。这是M3显示的情况。来看来自Shadowstats的约翰-威廉姆斯的这张图表，他仍在追踪M3。但是所有的货币供应增长衡量都在下降。这是通货紧缩的迹象。(http://www.shadowstats.com/)
法国兴业银行的艾伯特-爱德华兹本周指出：＂我们正走在通货紧缩的流沙上。＂国库券市场似乎在指向通缩的结果。下次衰退，我们可能都会变成日本，除非... 你必须理解，当你成为一名美联储理事时，你会被带入一间密室进行DNA改造。从此，你变得从本能上和基因上反对通缩。（除了堪萨斯市联邦储备银行的主席汤姆-霍尼格（Tom Hoenig）以外。他没有进行DNA改造。他希望加息，是美联储会议上的唯一反对者。当你Google汤姆-霍尼格的时候，你会看到他的六张图片。有五张明显是他本人，还有一张是一个发霉的面包。我不确定那是什么意思。哦对了，汤姆，我今年的杰克逊城（Jackson Hole）邀请函又丢失了！我更支持霍尼格当财政部秘书长。） 央行会怎么做？伯南克在他2002年那次著名的直升机演讲中给我们提供了线路图。最后的手段是印钞。但是美联储的资产负债表已经很膨胀了。他们能否向经济再推入2万亿美元来抗击通缩？他们会这么做吗？ 通缩紧缩是债务的解药，尤其对于那些过度负债者来说。英国似乎就在故意制造一些通货膨胀来减轻他们的债务负担。美国会不会采取同样的做法？ 如果我们陷入衰退和通货紧缩，我预计美联储将会加大量化宽松。他们将开始在长期债券移出收益率曲线之时将它们取下。他们能扩大美联储资产负债表吗？哦是的。亲爱的读者们，我们正处在未知的领域。 温哥华，缅因，旧金山 7月20-23日，我将以演讲嘉宾身份去温哥华参加阿戈拉金融投资研讨会。将有很多好朋友和出色的演说家到场。一定会很有趣。您应该一起过来参加。 http://agorafinancial.com/reports/vancouver/2010/vancouver2010_2.php?pub=C2010AFVAN&code=E400L5NC 接着参加每年照例组织的缅因州钓鱼之旅，然后在8月19-21日去旧金山参加在 Marriott Marquis举办的旧金山理财会。您将有机会见到不下五十名顶级专家，会议主题涉及全球经济和市场，还有生物技术、绿色技术、纳米技术等致电 800/970-4355免费订阅，并报优先代码018914，或到旧金山理财会网站上在线订阅！ 我爱上了托斯卡纳。我会再去的。我们住在托斯卡纳中部的小村特雷宽达Trequanda ( Chuisi 附近)的一个很棒的别墅里，那里有很多不错的餐馆和秀美的风景，而且离所有好玩的地方都不太远。我们是入住那套新装修别墅的第一个家庭，房东的布置很周到。我想大概总共有6间卧室，有些套间可以单独出租。价格非常合理。您可以在这里查看 www.ifiordalisi.com 。Marcia Hadley为我们提供食物，向导等等。他们是非常好的主人。我极力推荐他们。 最后，附上墨登旅游团的两张照片。一张在罗马，另一张在特雷宽达，您可以看到我们身后的景色。每次度假，孩子们都坚持要拍一张傻照。我看上去就是那种自然傻的，因此不必特意做什么。 祝愉快。记得，我们会跋涉前行的。世界没有末日。只不过是一场衰退而已。
准备完成新书的分析师，
约翰-墨登 如果您想转载约翰-墨登的任何一期简讯，您必须注明文章来源和电子邮箱地址（[email protected]），并写信通知我们[email protected]，说明将在何时何地转载。 约翰-墨登是千嬉波顾问有限公司的总裁，这是一家注册投资顾问公司。本简讯中所包含的所有资料都被认为是可靠的，但是我们不能够证明其准确性。所有资料都代表约翰-墨登的个人意见。投资建议可能会改变，因此我们迫切要求读者在做任何投资决定之前，先征求其投资顾问的意见。 报告中所表达的意见可能在无事先通知的情况下发生改变。在上文提到的基金中，约翰-墨登与千嬉波顾问有限公司的员工可能有也可能没有投资利益。 注：一般《授信投资者简讯》并非投资之邀约。它仅代表约翰-墨登先生与千嬉波投资公司的意见。其对象仅仅限于通过 www.accreditedinvestor.ws 或其它直接关联的网站向千嬉波投资公司（Millennium Wave Investments）以及Altegris投资公司（Altegris Investments）进行注册而且注册时间不少于30日的授信投资者。《授信投资简讯》的发送是建立在保密基础上的，任何订阅者不可将该简讯转发给除他们的专业投资顾问以外的其他人。投资者应同其个人投资顾问商讨所有投资项目。约翰-墨登先生是千嬉波顾问有限公司（Millennium Wave Advisors, LLC, MWA）的总裁，这是家在美国多个州都有注册的投资顾问公司。他还是千嬉波证券有限公司（Millennium Wave Securities，LLC，MWS）的注册代表，千嬉波证券有限公司是经美国金融业管理组织注册的经纪交易公司，是经美国商品期货交易委员会（CETC）注册的商品基金操作公司（Commodity Pool Operator, CPO）与商品交易顾问公司（Commodity Trading Advisor, CTA），同时也是一家中介经纪公司（Introducing Broker, IB）。千嬉波投资公司是千嬉波顾问有限公司与千嬉波证券有限公司的业务公司（dba）。千嬉波投资公司与诸如Altegris投资公司、绝对回报合伙公司（Absolute Return Partners, LLP）、领先对冲基金（Pro-Hedge Funds）、EFG资产国际公司（EFG Capital International Corp）和Plexus资产管理公司等其他独立公司进行私募投资咨询与销售合作。由墨登先生推荐的基金将他们的一部分费用支付给这些独立公司，这些公司再将收到费用的三分之一支付给千嬉波证券公司与墨登先生。本文中所表述的任何观点仅为提供信息之目的，不应以任何方式将之解释为对本文中或其它地方所提到的任何CTA、基金或项目进行投资的邀约、担保或诱导。在寻求任何投资顾问之服务或对某个基金进行投资之前，投资者必须认真阅读及分析相关的披露文件或发行备忘录。由于这些公司与墨登先生仅从他们所推荐或推销的基金当中获取费用，因此他们只推荐或推销他们能够就费用安排方面达成合意的投资产品。 过往绩效并不代表未来的表现。投资管理基金既有收益机会，也存在损失风险。在决定进行另类投资（包括对冲基金）之前，你应该考虑各种风险因素，包括以下事实，有些产品：经常从事可能增加投资风险的负债投资或其它投机投资；是不能立即兑现的；是不须要向投资者定期提供定价或评估信息的；可能会伴随复杂的税收结构与重要税收信息传播的延迟；所适用的规范与共同基金所适用的规范不同；费用通常比较高；并且，在许多情况下，投资是不透明的，只有投资经理人才知道其中细节。 The Risk of Recession June 25, 2010 by John Mauldin The Risk of Recession The Leading Indicators Are Starting to Turn Terms of Trade and US Real GDP Bernanke at the Crossroads Vancouver, Maine, and San Francisco We are halfway through the year (where did the time go?) and it is time to make some predictions about the last half of the year. This week we look at what the leading indicators are telling us, size up a new indicator, drop in on banking data, and do a whole lot more. Quickly, I will be on Larry Kudlow's show next Tuesday, which is at 7 pm Eastern. Larry has promised that we will spend some quality time on some of the current issues facing us. See you there! And now, let's jump in. The Risk of Recession I am on record as saying I think there is a 50-50 chance we slip back into recession in 2011, as I think the economy will soften in the latter half of the year and a large tax increase in 2011 (from the expiring Bush tax cuts) will tip us into recession. This was not based on data, but rather on research which shows that tax cuts or tax increases have as much as a 3-times multiplier effect on the economy. If you cut taxes by 1% of GDP then you get as much as a 3% boost in the economy. The reverse is true for tax increases. Christina Romer, Obama's head of the Council of Economic Advisors, did the research along with her husband, so this is not a Republican conclusion. If the economy is growing at less than 2% by the end of the year, then a tax increase of more than 1% of GDP could and probably would be the tipping point. Add in an almost equal amount of state and local tax increases (and spending cuts) and you have the recipe for a full-blown recession - at least the way I see it. I was asked at my recent speech in Milan, what sorts of things could make me wrong? There are a few. First, it could be that tax increases and cuts don't matter. Some very smart people (like Paul McCulley) feel that tax increases on the wealthy don't really figure into Romer's analysis. Or maybe bank lending starts to pick up and the economy is actually growing at 3-4% by the end of the year - although the chart below suggests that bank lending is still in freefall. Notice that if this trend continues just a little while longer, bank lending will have fallen by 25% in about two years. This is a truly scary chart. It is unprecedented in modern history. Also notice that after the 2001 recession bank lending continued to fall for over two and a half years.
Or perhaps Congress decides to extend the Bush tax cuts or phases in the increase over time. That would be better and maybe not push us into recession. Maybe they vote for more stimulus, although that does not look likely. If Congress cannot extend unemployment benefits, as happened this week, then other stimulus is unlikely. The uber-Keynesians that are in control of our economic policy clearly do not think that large tax increases matter, or if they do think so they are not speaking out about them. They are conducting an experiment on our economic body without benefit of anesthesia. Here's a prediction about which I can feel confident: if we do slip back into recession, they will blame some factor other than the tax increase and call for massive stimulus. In fact, they will probably say that the lack of stimulus was the problem in the first place. Paul Krugman will be the head cheerleader. (For a quick, fun, and instructive read, go to Joshua Brown's web site [The Reformed Broker] and read about the Econ Gangs of New York, where Joshua describes the various groupings of economic thinkers. Seems I am in the gang led by my friend Mohamed El-Erian, the New Normalers. Krugman, of course, is the leader of the New Jack Keynesians, a most vicious and pernicious gang, in my opinion. http://www.thereformedbroker.com/2010/06/24/econ-gangs-of-new-york/) Going into the last two recessions we had an inverted yield curve (where short-term rates are higher than long-term rates), which made it easy to predict a recession. Let's look at a graph of the yield curve from my e-letter of February 16, 2007. Notice that the 3-month T-bill is about 45 basis points higher then the 10-year bond, which is what the studies use as the basis for their analysis. The curve had been like this since before September of 2006, when I was predicting a recession about a year out. (An inverted yield curve is the best predictor we have of a recession one year out that. A yield curve like the one below has always been followed about one year later by a recession.)
Here is today's yield curve. It is normal (if you can call anything in a 0% Fed rate environment normal), and while not as steep as it used to be, is still quite steep. (Bloomberg)
We are not going to get an inverted yield curve when the Fed is holding rates at 0%. The curve we have today is not signaling a recession. It suggests that those who see continued recovery are right. I am not so sanguine. I was on a panel with Martin Barnes (of Bank Credit Analyst, and one of the best economic minds I know) at David Kotok's shindig in Paris last week. Martin and I are very good friends, but we do tend to go at one another. It makes for a very interesting panel for the audience. I posited that I think the chances are better than even that we have a recession in 2011. Martin said (insert deep Scottish brogue), "John, double-dip recessions are very rare." And he's right. The last (and only) one we had was because Volker was stamping on the brakes trying to bring inflation under control in the '80s. My rejoinder was along these lines: We are not coming out of a normal business-cycle recession. We went through a debt crisis and a balance-sheet, deleveraging recession. The old data that we used to judge recoveries by just does not apply here. At best, it is misleading. It wasn't just a bubble in housing, it was a bubble in debt. And now we are reducing that debt. We are coming to the end of the Debt Supercycle (a term coined long ago by ... Bank Credit Analyst). We now have a bubble in government debt that is getting ready to burst in one country after another. What is indeed a very rare thing (a double-dip recession) is a very real possibility. Since we don't have the yield curve to guide us, let's look at what we do have. The Leading Indicators Are Starting to Turn Even while I was on vacation in Italy, I had to regularly feed my addiction for economic and investment information. Over the course of a few days I ran across several studies on the Economic Cycle Research Institute's (ECRI) Index of Weekly Leading Economic Indicators. The index has turned down of late. Chad Starliper of Rather & Kittrell sent me the following charts and analysis. (I love it when someone else does the work for me while I'm on vacation!) "The ECRI has been getting some news of late. I did a little work on it, played with the rates of change, and found something a little ominous you might be interested in. The normal reported growth rate is an annualized rate of a smoothed WLI. However, when the 13-week annualized rate of change is used - shorter-term momentum - the decline in growth has fallen to a very weak -23.46%. The other times it has fallen this fast? All were either in recession or pointing to recession in short order (Dec. 2000)."
Jonathan Tepper (coauthor of the next book I am working on) sent me this piece from a group called EMphase Finance, based in Montreal. They wrote this back in April, as the Weekly LEI was beginning to turn over. They have found a bit of data that seems very good at predicting the economy of the US 12 months out. Let's take part of their work: Terms of Trade and US Real GDP "Many market participants are debating whether or not a double-dip recession will occur within the next quarters. As we are writing our report, ECRI Weekly LEI fell quickly to 122.5 points from 134.7 in April. This indicator did a good job leading U.S. Real GDP Y/Y by 6 months over the last two decades. However, ECRI Weekly LEI recently became quite unreliable as it increased up to 25% Y/Y in April, a level consistent with an unrealistic 8% U.S. Real GDP Y/Y! You can notice the problem on the left chart below.
"We discovered a new leading indicator to forecast U.S. Real GDP Y/Y, and it is simply the U.S. Terms of Trade (TOT). It is defined as the export price / import price ratio. We are pleased to be the first to document this, at least publicly. On the right chart above, TOT leads U.S. Real GDP Y/Y by 12 months. The only drawback: underlying time series are monthly instead of weekly, but this is not really an issue with that much lead. Also, the relationship still holds well if we extend to the maximum data (1985)." Their conclusion? "As you probably noticed earlier, TOT is suggesting a decline of U.S. Real GDP Y/Y to nearly 0% within the next 12 months. Q2 2010 Real GDP Q/Q Annualized to be released on the 30th July may match expectations as it reflects data of the last three months, which were positive in general. However, we are most likely going to see weaker numbers in the next quarters. Will this lead to a double-dip recession? We believe the odds of a double-dip recession within the next 9-12 months are minimal, but odds may increase to 50-50 in 2011, depending on the evolution of variables we follow in the upcoming months." And while we are on leading indicators, let's end with this note from good friend and data maven David Rosenberg of Gluskin Sheff (based in Toronto). "For the week ending June 11th, the ECRI leading index (growth rate) slipped for the sixth week in a row, to -5.7% from -3.7%. Only once in the past - in 1987, but the Fed could cut rates then - did this fail to signal a recession. But a -5.7% print accurately signaled a recession in the lead-up to all of the past seven downturns.
"The consensus is looking at 3% real GDP growth for the second half of the year, but as Chart 2 suggests, the two quarters following a move in the ECRI to a -5% to -10% range is +0.8% at an annual rate on average. So right now the choice is really either a 2002-style growth relapse or an outright double-dip recession - pick your poison."
My take is that Bush cut taxes in 2001 and again in 2003 in the face of weak economic circumstances. Unless something changes, we are going to enact the largest tax increase in US history. And that will be matched by equally large tax increases and spending cuts by state and local jurisdictions. And we are going to do it at a time when the above research suggests that growth may be in the 1% range and unemployment will still be in the 9-10% range. Extended unemployment benefits will be long gone for many people. Housing will still be in the doldrums (more on that in next week's Outside the Box) and housing prices are likely to fall from here. Growth in the first quarter was revised down (again!) to 2.7%, or about half that of the 4th quarter of last year. Much of what passed for growth was inventory rebuilding and stimulus. The underlying economy may be weaker than the headline number reveals. And by the 4th quarter, there is very little stimulus. Given the above, I think we have to increase the odds of a 2011 recession to 60%, and those odds will rise and fall based on the economic performance of the next two quarters. Do tax increases matter? We are about to find out. And if I am wrong, I will be spectacularly wrong. And I hope I am. But you have to call it as you see it. Bernanke at the Crossroads I went to the crossroads, fell down on my knees - Robert Johnson If I am right about the potential for a recession, it is going to bring Ben Bernanke and the Fed to a very serious crossroads. Recessions are by definition deflationary. But inflation is already as low as it has been in a very long time. Core CPI is less than 1%. The Dallas Fed's Trimmed Mean Inflation Index is down to 0.6% for the last 6 months. If we enter into a recession, it is quite possible that the US could go into outright deflation. That is what M3 is saying. Take a look at this chart from John Williams of Shadowstats, who still tracks M3. But all the measures of money-supply growth are turning down. This is signaling deflation. (http://www.shadowstats.com/)
Albert Edwards of SocGen noted this week, "We are now walking on the deflationary quicksand." Treasury markets seem to be pointing to a deflationary outcome. In the next recession, we could all become Japanese, unless ... You have to understand that when you become a Fed governor you are taken into a back room and given a DNA change. Henceforth, you become viscerally and genetically opposed to deflation. (Well, except for Tom Hoenig, president of the Kansas City Fed. His DNA change did not take. He wants to raise rates now, and is the lone dissenter at the Fed meetings. On a side note, when you Google Tom Hoenig, you get six pictures of him. Five are clearly of him, and one is moldy bread. I am not sure what that means. By the way, Tom, my invitation to Jackson Hole got lost again this year! And I would be happier with Hoenig as Secretary of the Treasury, for what that's worth.) What's a central banker to do? Bernanke gave us the road map back in 2002 in his famous helicopter speech. As a last resort, you print money. But the Fed already has a very pregnant balance sheet. Can they push another $2 trillion into the economy to combat deflation? Will they? Deflation is the enemy of debt, and especially those who are over-indebted. Great Britain seems to be purposefully pursuing a little inflation to make its debt burden easier. Will the US do the same? If we slip into recession and deflation, I expect the Fed to react with more quantitative easing. They will start to take down longer-dated paper as they move out the yield curve. Could they expand the Fed balance sheet? Oh yes. We are in uncharted territory, gentle reader. Vancouver, Maine, and San Francisco I will be at the Agora Conference in Vancouver July 20-23. There will be a lot of good friends and great speakers. It will be a great time. You should consider joining me. http://agorafinancial.com/reports/vancouver/2010/vancouver2010_2.php?pub=C2010AFVAN&code=E400L5NC Then, after my regular fishing trip to Maine, I will be in San Francisco for The Money Show, August 19-21 at the Marriott Marquis. You'll have the opportunity to meet with 50+ leading experts, who will cover everything from the global economy and markets to biotech, greentech, nanotech, and much more. Register for free by calling 800/970-4355 and mentioning priority code 018914, or register online at The MoneyShow San Francisco! I fell in love with Tuscany. I will go back. We stayed at a wonderful villa in Trequanda (near Chuisi) which is a small village in the heart of Tuscany, with wonderful restaurants and a magnificent view, and not too far from all the cool places. We were the first family to stay at the newly refurbished villa, and the owners had done it up right. I think there are about 6 bedrooms, although some of the suites can be rented separately. The cost was quite reasonable. You can see it at www.ifiordalisi.com. Marcia Hadley set us up with cooks, guides, and so much else. They are wonderful hosts - I highly recommend them. Finally, I attach two pictures of the Mauldin horde. One in Rome and the other in Trequanda, where you can look over our shoulders at the view. The kids all make a point each vacation of taking a goofy picture. I look goofy naturally so did not have to do anything special. Have a great week. And remember, we Muddle Through. The world does not come to an end. It's just a recession.
Your now getting ready to crash out this book analyst,  John Mauldin [email protected] Copyright 2010 John Mauldin. All Rights Reserved |
