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Post by jeffolie on Mar 6, 2013 18:26:08 GMT -6
www.financialsense.com/sites/default/files/users/u728/images/2013/REFLECTIONS-06-03-2013-1.jpgwww.financialsense.com/sites/default/files/users/u728/images/2013/REFLECTIONS-06-03-2013-2.jpgWorld Recession Update By Dwaine van Vuuren 03/06/2013 We have quarterly GDP data for 11 more OECD countries since our last post “World plunges into recession in Q42012“, and there have been some 2nd estimate revisions (such as the U.S). The chart below shows an improvement over the last post we made with the inclusion of more data points, but both the measures of single and two quarter recession metrics are still below their respective “Global Recession” thresholds: The table below plots the last 20 quarters (5 years) of quarter-on-quarter GDP growth. With most of those countries still outstanding fresh data (tagged “…”) hovering on the brink, there are going to have to be some hefty upward revisions and re-estimations to improve matters from here. It is interesting to note that the equally-weighted average GDP growth has now fallen into negative territory for one quarter, although the GDP-weighted one has not. We continue to monitor the US NBER Recession Model and the GDP/GDI Recession Model closely for clues on a current U.S recession. As we forecast a month ago, Personal Incomes plunged as a result of all the stuff pulled forward before the Fiscal Cliff Tax debate which made things worse for the NBER Model, but the GDP/GDI model improved with the -0.1 to 0.1 GDP 2nd-estimation and an upward revision to 3Q12 GDI. But its all very much uncomfortably “on the brink” at the moment. Looking at the strong showing of the 9 components of our US Long-Leading Index (which never signalled recession but did come on the brink 18 months ago), we can only conclude we will either enter a mild recession or experience a “soft landing” before resuming expansion. For now, the stock market seems to be coming to the same conclusion and happily continue on its liquidity-fuelled rally. www.financialsense.com/contributors/dwaine-van-vuuren/world-recession-update
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Post by unlawflcombatnt on Mar 7, 2013 12:49:31 GMT -6
Let's not forget that the US's so-called "positive" GDP growth rate was only +0.1% after the last revision. The Population grows faster than that, so this is still a negative per-capita growth rate.
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Post by jeffolie on Mar 11, 2013 17:14:22 GMT -6
www.financialsense.com/sites/default/files/users/u728/images/2013/reflections-10-mar-2013.jpgGlobal Bottom or Double-Dip? By Dwaine van Vuuren 03/11/2013 Our prior post titled “World Recession Update” depicted the percentage of 41 countries tracked around the globe that were printing 1 or 2 consecutive negative quarters of GDP growth. It is easy to view the data presented and come to the alarming conclusion the world is accelerating into an ever-deepening recession and the U.S is bound to follow soon. However there are two sides to this coin and when we inspect the Leading Economic Indicators (LEI’s) of the 41 countries in question we see that the Global LEI dipped below zero into recession territory in July 2011, bottomed in Dec 2011 and rose above zero in Sept 2012 Also, the percentage of countries with positive LEI’s (black line in chart depicting expansion) seemingly bottomed in March 2012. However it is evident that unlike the prior recession, the black line has not zoomed up in tandem with the blue line implying that the global LEI rise only has a few large contributors such as U.S, Canada, Germany, Italy, Australia and U.K to thank for its recent rise. The LEI rebound therefore lacks broad-based participation at this point which is a cause for concern. A long-term version of the chart above that we maintain for clients implies the blue line crossing zero on left axis should be confirmed with the black line crossing 0.5 on the right axis to enable robust inferences on global recession or expansion. Thus, when at least 50% of countries have LEI’s above zero, we can breathe easier but for now this is still white-knuckled riding the rapids “edge of the seat” stuff. Looking at the level of the blue line and that of the black line, a world “double-dip” scenario does not seem out of the question if LEI data does not improve in the ensuing months. The lacklustre performance of the Chinese and Indian LEI’s is especially worryingwww.financialsense.com/contributors/dwaine-van-vuuren/global-bottom-or-double-dip
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