Thank You and Thank You
Thank you to Jeffrey Tucker, writing on The Epoch Times, for this little gem:
The Recession Of 2025 Will Be Backdated
It’s a reasonable supposition that a recession will become obvious to all by next summer. It will then be declared by year’s end. The following year it could become backdated with data revisions that take us to 2022. At that point, it will become obvious to people that we have a major problem. Money velocity will freeze up and banks will start failing.
It’s refreshing to see someone else saying that we are currently in a recession that I call the “stealth recession” because fraudulent (or negligently errant) data are masking it, presenting a story during an election year intended to convince voting citizens that everything is great. Unfortunately for the perpetrators of this snow job, they could not convince citizens they were feeling better than they were feeling, so the perps lost the election. Of course, economic truth only comes out now, as I’ve pointed out all year, through endless backward data revisions.
Tucker goes on to write,
It is not discernible in our time that we are already in recession but that is due to some brittle statistical measures. If you extend the inflation numbers to include housing and interest, plus extra fees and shrinkflation, minus hedonic adjustments, and then adjust the output numbers by the result, you end up in a recession now.
Thank you for that, too. It’s the same point about being in a stealth recession I’ve been making, but trying to advance that point is like talking into a windstorm because most media is just howling above your voice about how great things are, and few financial writers are willing to believe the whole process of calculating inflation is a political concoction designed decades ago to make every administration look as good as possible and to keep Social Security payments down.
And especially thank you for this:
Do you remember the two successive quarters of declining GDP in 2022? At the time, it was said that this was not a recession, even though every definition of recession was two declining quarters of GDP. It was said at the time that the data was not enough to declare it because labor markets were strong.
That is what most of my drumming was about back in 2022 also: Recession wasn’t being declared because faulty labor statistics had those who were not thinking very deeply convinced that GDP couldn’t really be negative when the labor market was so strong. So, I spent a lot of time explaining how several labor statistics were badly broken by all the Covid madness.
Actually, I didn’t read anyone back then coming clean on the “strong labor market” being the reason there could be no recession, but I kept saying that it was, and eventually we started hearing people saying the likely reason the NBER (National Bureau of Economic Research) didn’t declare a recession even after two quarters of negative GDP growth was due to the “tight labor market.”
I do my best to yell against the wind. So, it is nice to see all of that confirmed neatly in one place.
Trouble was that this too was an illusion. Most of the job gains were in fact in part-time jobs and multiple job holders, and those gains went to foreign-born workers and not natives. Overall, jobs held by native-born workers that are full-time are down relative to four years ago. No one in the mainstream press admitted this.
Exactly. Even when they started finally admitting we HAD BEEN (always safer to use the “R” word after it’s supposedly all over) in a “technical recession,” you still didn’t see anyone in the mainstream financial news media laying out why those job statistics were a farce because they still needed to keep using them to support the team they were voting for.
And, now finally …
The jobs report that came out last week was the first glimpse of truth because it was brazenly awful, underperforming every prediction. It also chronicled major job losses in manufacturing and professional services. Those are hard-core recession signs that are likely going to worsen.
We finally got to the point where it was becoming hard to electioneer the statistics enough to hide all the bad, and then there was Helene and Boeing that it could all be blamed on, so a glimpse of the truth was revealed.
And true to form …
All this data will start to be revised next year as the conventional wisdom will change. It will be widely admitted that the economy is weaker than we previously supposed. This will happen regardless of who wins. For one winner, it will serve as an attack and for another winner, it will serve as pretext for extreme intervention like the promised price controls on rents and groceries.
As I keep pointing out with proofs, the bad news now is only revealed in backward revisions when few are looking. So, yes, that is how it will happen. When nearly all revision are down, you know they’re biased.
Tucker also states, as I’ve continued banging my drums about all year, that we will be going back to rising inflation reports now that the election is past. Then he lays out a little of the reason why.
Finally, today, we got this labor report confirming the last one:
Continuing Jobless Claims Jump To 3-Year-Highs
… continuing claims rose to 1.892mm Americans – the highest since Nov 2021.…
Is this the start of the ‘unraveling’ of the Biden admin ‘adjustments’?
It’s just getting hard to hold the long lie together, and with the election now lost for Team Biden, there isn’t much point in trying. The ruse is up.
(Sources for the quotes and graph above are highlighted in boldface among the headlines that follow.)