Friday, July 16, 2010

Consumer Metrics Institute: In about 20 days the 2010 slowdown could be more severe on a day-to-day basis than the 2008 'Great Recession'

Here's how Richard Davis of Consumer Metrics sees the current economy. Bar none, his is the best real time macro-economic tracking data. He emails:

On July 6th we reported that the nearly relentless decline in our 'Daily Growth Index' had leveled off, but cautioned that the index should be viewed from a longer perspective. Since then the decline has resumed:

(Click on chart for fuller resolution)

When the most recent period of contraction in our 'Daily Growth Index' (January 15, 2010 to date) is charted along with the similar 'Daily Growth Index' contraction events from 2006 and 2008 (with the first day of each contraction aligned on the left-hand axis) the relative severity of each contraction can be visualized.

(Click on chart for fuller resolution)

One measure of the true severity of an economic slowdown is the 'area under the curve' (or 'above' the curve in this case) swept out by the 'Daily Growth Index' over time. This area is just the average magnitude of the decline times the duration of the contraction event. During the 2006 slowdown this area was about 136 percentage-days of contraction, while the 2008 event was much more severe at 793 percentage-days. The 2010 event has now reached 288 percentage-days, over twice the severity of 2006 and well over a third of 2008 'Great Recession' -- and it is still growing.

The key point to notice in the above chart is that if the current 2010 curve continues its current course, in about 20 days the 2010 slowdown will be more severe on a day-to-day basis than the 2008 'Great Recession' was at the same point in its respective evolution. Unless the economy begins to pick up quickly, a double dip is likely -- with the second round milder but lingering longer than the first.


  1. so this means what exactly in laymens terms?

  2. We are probably about as screwed as we have been
    over the past few years. Maybe more, maybe less -
    but probably more.

  3. Gee, I'd like to help but I've been jobless for a year (after working 36 years). The millionaires' club in Congress cut-off my unemployment & unless my job-search pays off soon I may be homeless. I did walk to the Dollar General Store earlier today & buy a tube of toothpaste. Maybe that will perk-up the economy?

  4. I study the decline of stock market. Last summary analysis was 8 out of 10 major sectors are in the red. Total collapse is coming soon.

  5. Go to your Congress man or woman and have them take care of you. They will have all the money with their money-masters, the international banksters. After all, shorting the market will make them very rich while you starve!

  6. The U.S. is done.

    The higher living standards of the U.S. were made possible by the accumulation of Capital to be invested in production.

    The production of Human Capital, in terms of education etc has been destroyed by the billions of "education" hours spent every year on politically correct crap of no value.

    Globalization has made the movement of Financial Capital stunningly easy.

    There is no way back from here.

  7. Losing 3rd and last home to foreclosure--still have a job though--I am lucky

  8. Stop Sending our jobs overseas. And if the Banks , Big Corporation, start hiring and let go some of the record net profit. Maybe the Economy would do much better.

  9. It is well past time to learn a new language and GTFO.

  10. Which 'thinktank' was it- who many years ago, concluded that the way out of the world's consumption/environmental/population/yadayada problemos, was to ELIMIMATE THE MIDDLE CLASS?
    They reasoned that- the middle class had to go because it consumed too much stuff.
    That the upper class should remain as they are- that it does not matter how much they consume, because there are so few of them- and in an ideal society, there should be a few very wealthy people, and the remainder should be dirt-poor.
    Most folks don't consider whole countries like this, ( so long as their leaders and their elite do what they are told),
    Until one finds themselves among the dis-enfranchised, right here and right now.
    Now what?
    Waddya gonna do about it?
    When do you wanna start?

  11. Humans, in all of history, organize themselves into slave societies ruled by a parasitic and ruthless elite surrounded by a sadistic gang of enforcers, all living by means of an extortion racket called taxation. No matter how wealthy or poverty-stricken the society, there is never a shortage of brutal thugs willing to enforce evil on the innocent in the name of law.

    Revolutions change nothing except the rhetoric. Wars change nothing except the victims and profiteers. A new elite arises, and the thugs find new bosses. In short, the planet has always been a thugocracy and will be until humans invent morality. So far, they have only invented religion and law, both devoted to encouraging the victims to take things on faith and obey the violent, lazy, tax-eating thugs.

    The current "financial crises" is simply the fallout from a 100 year scam of counterfeiting by the elite racketeers known as central bankers. Naturally, the victims will be made to pay for the bail-outs of the perps. After all, we're dealing with humans, and this is Planet Earth, where slavery for humans is like water for fish.

  12. Stop Sending our jobs overseas? Are you serious? Look in every driveway and what do you see? A foreign car. Americans brought this on themselves, so good enough for them.

  13. the amount of negativity in here indicates only one thing - that we're at or close to the bottom in both the economy and stockmarket. When things seem the worst, thats the single best time to buy and this is about as good a contrarian Buy signal I think I've ever seen! Even more pessimism now than 2 years ago. Watch the market rally from here for a considerable time (years possibly) and 'experts' scratch their heads - again.

  14. I say one more swing trade left until the point of inflection between the 2008 and 2010 daily growth index, then wait and see.

  15. Obama says "Only government" can help. Screw the government. The government is the reason the middle class is disappearing. We need a war on the middle class by the government so we can survive.
    Look at war on poverty...10x more poor. Look at war on drugs...10x more druggies. So, why not a war on the middle may be our only hope.

  16. Translated, this means one of (2) things:

    - Fed fingers on the liquidity levers stay put and we drift a bit further, then crash precipitously.

    - Fed fingers on the liquidity levers sense the timing is close at hand - (along with public sentiment that would abide by it - just look at the hooting & hollering over unemployment insurance extension), for another round of QE.

    *QE of any significance at this juncture (politically speaking) is joined-at-the-hip with Public sentiment regarding same.

    The wet fingers are in the Political Wind right now as we type, to obtain a reading on the Public's stomach for more $bailouts.

    Reading = positive: QE, post-haste

    Reading = negative: QE, in disguised fashion to avoid the social unrest that would accompany a deflationary 'hands-off' position.

    Make sense?

  17. If you want to "FIX" the USA and his finances begin to dismatle the "WTO".
    Eventually it will happen but for us, Americans,
    better sooner than later ... it will save us
    a lot of pain.Every Economic designed expansion
    is Unsustanable and will crash by his own faulty design.