there’s reality that says NONE OF coincident AND/OR backward looking indicators SHOWS any kind of recovery.. nada zilch.. yes in some cases rate of change is better than in past but still…
taxes, credit, sales AKA real money involved, un-adj, indicators all of them still shows contraction..

and there’s perception of recovery cause SP500 BOTTOMED, short-long curve at historical high, government runs deficit like
like 2012 is real end of civilization.. but still IT’S ONLY Perception based on prior examples… its not reality..

you perception SIR is based on we’re in typical after WW2 recovery.. its simple not true.. just pull out charts w/
consumer/business credit statistics to understand.. at some point perception of recovery MUST BE CONFIRMED BY real hard facts..
but it’s not happening and gonna happen any time soon…
thus market is going down hard sooner or later .. sorry

# as far as JAPAN concerns..

WE”RE all Japanese now… just look at CBO projections .. goverment deficits are as long as eye can see..

only problem is worse here… at least back in 90x Japanese had savings and they’re still ‘export monster’.. Americans don’t save much , still in debt and still import more than export…

nice talking
Alex

Sales tax receipts are at best a coincident indicator and like the other stats you cited give you no insight about the future course of the economy.

And by the way, since you don’t seem to know this, the recession was not caused by a fall in consumption. The fall in consumption is a reaction to the recession not the cause and consumption will only rise again after the recovery is entrenched and employment starts to rise. That takes time but based on Friday’s report I would say that we are on the verge of that happening. The cause of the recession was the huge drop in investment, primarily construction, and the recovery will be led by investment as well. That doesn’t mean it will necessarily be construction by the way and I suspect it won’t be. Manufacturing is leading the recovery so far and orders for capital goods are starting to rise. That investment is what will produce the recovery and an eventual rise in consumption will be the result. You might want to review Say’s Law.

I don’t have a time machine either by the way, but you can’t invest based on the past and the present. You have to invest based on a view of the future and there are indicators which provide some insight. The ISM reports, the shape of the yield curve and bond spreads are all forward looking indicators with good track records. And all of them are currently pointing to a very robust recovery.

Finally, let me just say this about Mish and the other extreme pessimists. Mish makes a lot of very good points about the problems with the US economy. We have some very serious issues which need to be addressed. State and local budgets are a mess and as Mish points out that is primarily a function of public sector union power and greed. Government debt is a serious issue and the budget will have to be tamed at some point, but we aren’t at the point yet where it is an issue that will prevent a cyclical recovery. Housing markets still have some problems although I am not as concerned about residential markets as Mish and some others. The bubble states probably have more troubles on the way, but nationally I don’t think the issue is as bad as he believes, assuming we get some job growth. Commercial real estate is another problem he has spent a good deal of time on and he’s right, commercial real estate has problems. Vacancy rates are high - although not as high as the early 90s by the way - and there will be some defaults. However, there are ways to mitigate the damage from CRE. Suspension of mark to market accounting will allow a lot of these loans to be carried by the banks at face value until they cure. We did that in the 80s with Latin loans and we’ll probably do it again. Is it honest? Probably not, but it will happen. We are also seeing a lot of workout deals in CRE; witness the bidding for General Growth. A lot of equity will be brought into the CRE market to take the place of the existing debt.

Mish is right to continue pointing out all these problems, but if you try to invest based on the long term issues he’s covering you’ll just be paralyzed. In the meantime, the forward looking indicators are all pointing to a fairly robust cyclical recovery. That has been an investable event and if you’ve been hunkered down reading Mish for the last year, you’ve missed a huge opportunity. I don’t know how long this recovery will last but history suggests that it is just getting started. Maybe this recovery is different and maybe it isn’t. We don’t know yet, but as you point out, I can’t predict the future. I’ll have to react to the data as it comes in and if things change I’ll change with them. We’ll see….check back in every week - I’ll be here.

P.S. I am obviously aware of what happened in Japan. In fact I suspect I know quite a lot more about it than you do, but that is unimportant. This isn’t Japan in the 90s or the US in the 30s. This is the US in 00s and every period is unique. We don’t know what policies will be put in place in the next few years and so we don’t know if we’ll follow the Japanese experience. For cultural reasons, I suspect not.

do they really ?????

how about http://www.rockinst.org/pdf/government_finance/state_revenue_report/2010-02-23-State_Revenue_Flash.pdf

p2… out of 41 states 37 had sales taxes declines in 2009 4qrt vs prev year… why is that ? isnt recovery under way ?

I dont have time machine SIR, so I KNOW nothing about future,,
but I pretty much sure about now and past,, its not pretty

anyway,, I put your site in favorites and hope we will have a talk later this year..

good luck
alex

PS
I forgot.. please google ‘japan nikkei bubble burst lost decades’.. it will help you in your ivory tower…