This number seems wei tu lo

 

IMF Warns Trump Could Cost the World a Trillion Dollars

The Guardian

 

Is that all?

 

World GDP in 2023 was $106.2 trillion according to the World Bank, whose graph shows that the 2009 Great Recession contraction was $3.34 trillion. The Grauniad is worried that the Trump trade war will cost a third of the 2009 contraction, based on an analysis by the IMF, "the most sober of global institutions" lol.

 

Meanwhile there was a 2015 contraction in global GDP which was much larger, $4.55 trillion. That was much worse than the so-called Great Recession. And much worse than the global impact of COVID in 2020, which was $2.39 trillion according to the World Bank's data.

 

Why isn't this popularly discussed?

 

AI laughably tells me "global GDP did not actually contract in 2015".

 

 

 

 

 

But the World Bank itself traces the 2015 global GDP hit to a massive contraction in trade, at the heart of which was the forced restructuring of the Chinese economy under Xi Jinping, who is a communist reactionary.

 

The sizes of the tariffs of Donald Trump, which far exceed those of the Smoot-Hawley era, especially with trade hegemon China, seem uniquely poised to wreak havoc on a world whose experts today can't draw the obvious parallel to the right year.

In the age of everything that is good is awesome, everything bad must be an emergency

 The Zeitgeist is epitomized by a general hysteria, incapable of proportional thinking and hostile to reason, and so it should come as no surprise that our new leadership is exploiting that for its own ends, mostly to distract you while they make money hand over fist.

Everything is awesome. Everyone is great.

But everything is also a disaster, and the worst ever.

COVID was going to kill us all. The vaccines were going to save us all.

Biden was going to cure cancer. RFK Jr is going to solve the mystery of autism by September.

All those people streaming across the border during the Biden administration were seeking asylum. Now under Trump they were an invading enemy army.

The recession of 2008 had to be The Great Recession, or The Great Financial Crisis, as if 10.7% unemployment in 4Q1982 was the golden age of Ronald Reagan, and over 3,000 savings and loans didn't go belly up during that decade and part of the next.

Heat waves and cold waves are unprecedented, unless you talk to an old person. We have 12 years left before global warming kills us all.

Putin is going to launch a thermonuclear WWIII, same as Saddam Hussein.

So of course trade deficits are suddenly an emergency.

U.S. businesses sue to block Trump tariffs, say trade deficits are not an emergency

 

Real GDP update for Mar 27, 2025

 The third report for real GDP for 4Q2024 and full year 2024 was released today here.

The annual rate of economic growth in 4Q was 2.4%, and 2.8% for 2024.

But here's the big picture.

Real GDP for the 79 years 1929-2008 grew at a compound annual rate of 3.405%.

Real GDP for the 16 years 2008-2024 grew at a compound annual rate of 2.074%, a rate 39% lower.

We have not had, and do not now have, the greatest economy ever at any point since the Great Recession.

 

 

Clueless Ed Kilgore today post-mid-March thinks angry Democrats are in the minority based on a Gallup poll from late January

But this simply ignores everything Trump has flooded the zone with since January 27. That's a backward-looking poll.

Trump's has been a non-stop roll out of actions designed to alienate everyone in every arena.

Republicans are angry, too.

Has Ed been living under a rock?

Ed Kilgore here in "Today’s Angry Democrats Are Not Tomorrow’s Tea Party of the Left":

... it’s not accurate to say that the current wave of anger is ideological or the product of an aroused Left. As Politico notes, Democrats unhappy with their party are not at all united in any ideological diagnosis or prescription:

Despite the restive energy in the party’s progressive wing, the Democratic discontent does not seem to be centered around a desire to pull the party to the left or the right. Democrats cannot seem to agree on which direction the party should move in — recent Gallup polling found that 45 percent wanted the party to become more moderate, while 29 percent felt it should become more liberal, and 22 percent wanted it to stay the same.

I think it's way too early to say this is or is not like the Tea Party period. It was 21 months from Santelli's Rant to Election 2010, so it's still very early innings, the beginning of the game. We're not even two months in. 

The energy I've seen in the interim directed against office holders does resemble the Tea Party movement in some ways, which was a maelstrom of angst for its time, sucking rich and poor and everyone in between into its vortex. Its energy reverberated long after into the November 2010 election and later into the Occupy Wall Street movement.

The violence against Tesla does not resemble the Tea Party. But it is energy. And it is ideological. Elon Musk is a traitor to the green energy movement, making the prospect of climate doom more probable to them. The left is most definitely aroused.

I can still remember my congressman warning me that unless he voted for TARP in September 2008 my credit card might stop working. Politicians like him then weren't focused on ordinary people and their views, same as today at Republican town halls where one tone-deaf politician after another is greeted with derision by people upset about losing their government jobs and in fear of losing benefits they've earned.

The Tesla protesters think climate doom is near, just as the craziest factions of the Tea Party movement were sure another Great Depression was just around the corner.

No, the politicians in 2008 were focused on the big money failures of investment banking like Bear Stearns, Merrill Lynch, and Lehman Brothers, which were outside the FDIC system, not on the people whose traditional banks and jobs were in actual peril.

Civilian employment fell by 3.5 million just from December 2008 to March 2009. 24 banks failed during this period alone, after 22 failures already in 2008 up to that point.

And what the politicians did subsequently fixed nothing.

461 more FDIC banks went on to fail by the end of 2014. Civilian employment crashed by 10.05 million from July 2008 to January 2010, and did not recover its July 2007 level until October of 2014. Between 2006 and 2014 there were approximately 9.3 million real estate foreclosure filings or the equivalent.

Millions were badly hurt. Many never recovered. They and their children voted for Trump in 2016.

People getting hurt is the standard of comparison in these things.

Putting 600,000 government workers out of a job all of a sudden in 2025 is really bad, stupid, and downright mean, but not on the same level as the Great Financial Crisis. But start missing Social Security checks or disappearing your neighbor in the middle of the night because something was wrong on his immigration paperwork and things might get spicy. A shooting war with Canadians or Mexicans, or Panamanians or Danes, would be next level.

American tourists or workers or residents abroad incarcerated in a tit-for-tat with the Trump administration might start to focus even more minds.

Who knows what's next?

Like I said, early innings, the energy is building, but Kilgore isn't here.

 

The US depression in road travel from COVID-19 ended in 2024 and lasted five years

 The 3.257 trillion miles of 2019 was exceeded in 2024 by 5 billion miles, on an average annual basis.

The depression in road travel from the Great Financial Crisis lasted eight years, from 2007 to 2015.

Previous to that we had similar, but smaller contractions in US road travel, from 1979 to 1982, three years, and from 1973 to 1975, two years, precipitated by the oil trade shocks of the Iranian Revolution and the Yom Kippur War respectively.

You are now free to move about the country.

 

On the surface today's report of real gross domestic product is actually pretty good

 

 The first estimate of real GDP for 4Q2024 and for annual 2024 has been reported here, 2.3% and 2.8% respectively.

On a big picture basis, the compound annual growth rate for real annual GDP 2020-2024 came in at 3.55% per annum, which compares very favorably with 1929-2007 at 3.45% per annum.

Unfortunately 2007-2024 is still wallowing at 1.957% per annum.

The country got over the Great Depression, but we're still working on the Great Recession.

Cheap gasoline prices were key to the Trump-era "boom" for the bottom half of income earners destroyed by the Great Recession

Reported here in "Inflation-shocked low- and middle-income Americans may not spend normally for years":

“For a very large share of Americans, the bottom 60% are spending more on essentials than before the pandemic,” said Michael Pearce, Oxford Economics deputy chief U.S. economist. “The burden is hardest among the lowest income but also touches middle income. Spending patterns of low-income Americans will take years to recover.” ...

The last time low-income Americans’ discretionary spending fell this much, which was during the Global Financial Crisis of 2007-2008, it took five to 10 years for spending patterns to return to previous levels, he said.

“And the reason was gas prices fell,” Pearce said. Global oil prices fell by about 70% between 2014-16, which pushed pump prices sharply lower and helped low-income Americans catch up.

“It’s harder to see some revolutionary cost saving (like that) on the horizon,” he said. 

          

Harder to see only if we continue with the green energy nonsense.

The opportunities are YUGE for Trump/Vance because ALL energy costs much more now.

It's not just gasoline. Get the government boot off the neck of fossil fuel producers and gasoline will come down, natural gas will come down, and electricity will come down. 

Base energy from coal should be transitioned to nuclear, which works in cold weather and hot weather without fail just like coal, unlike natural gas, wind, and solar, which are fine where appropriate but not as base energy, the energy you must have when you need it when the sun doesn't shine, the wind doesn't blow, and the gas won't flow.

J. D. Vance knows:

 

 

Sometimes it's not the economy stupid: Headline employment under Obama didn't recover until May 2014, but he got re-elected in 2012 anyway

 Six years and four months went by: Jan 2008-May 2014.

And economic confidence actually declined from -11 in 2012 to -10 in 2014 when it did!

It's one of the craziest things in US political history, comparable to FDR getting re-elected throughout the Great Depression, which his economic experimentation only made worse.

By October 2012, 72% said the effects of the Great Recession were still the most important problem, compared to 43% today in October 2024, but it didn't matter that Obama wasn't solving it. He beat Romney anyway.

Is this one of those sometimes?

The same phenomenon may be happening today, but in reverse.

Harris stands to lose despite economic indicators which are chugging along in her favor, or at least not falling apart, to which those 43% seem oblivious.

Civilian employment in July and September 2024 remains near the November 2023 peak. Core inflation is still too high at 2.7%, but it isn't in the 5s anymore like it was for four straight quarters. Congress has thrown the book at the economy since 2Q2020, with nominal GDP growing at an astounding 9.84% compound annual rate because of pandemic spending. That's been a double-edged sword, however, exploding the national debt, inflation, and interest rates.

But economic confidence is Obama-like negative, and has been since it crashed during the pandemic in April 2020 to -32 from its highest level in 20 years under Trump just two months before, in February 2020 at +41.

Trump didn't shut down the economy in 2020, but governors sure did. It was a stark demonstration of just how quickly the wrong leadership can make everything go to hell in a hand basket overnight. The people today aren't wrong to lack confidence.

Ominously for incumbent VP Harris, Gallup thinks 2024 is most analogous to 1992, when Americans booted the incumbent Bush 41 even though the recession had ended more than a year before in 1991.

Majority of Americans Feel Worse Off Than Four Years Ago

WASHINGTON, D.C. -- More than half of Americans (52%) say they and their family are worse off today than they were four years ago, while 39% say they are better off and 8% volunteer that they are about the same. The 2024 response is most similar to 1992 among presidential election years in which Gallup has asked the question. ...

With a majority of Americans feeling they are not better off than four years ago, economic confidence remaining low, and less than half of Americans saying now is a good time to find a quality job, the economy will be an important consideration at the ballot box this year. As inflation persists and economic concerns dominate voters' minds, the upcoming election may hinge on which candidate can best address these pressing issues.

 

Gallup poll not good for the incumbents Biden-Harris: Economy ranked most important as in 2008 when the voters dumped the incumbent Republicans represented by John McCain

WASHINGTON, D.C. -- The economy ranks as the most important of 22 issues that U.S. registered voters say will influence their choice for president. It is the only issue on which a majority of voters, 52%, say the candidates’ positions on it are an “extremely important” influence on their vote. Another 38% of voters rate the economy as “very important,” which means the issue could be a significant factor to nine in 10 voters. ...

The current 52% of voters rating the economy as an “extremely important” influence on their vote for president is the highest since October 2008 during the Great Recession, when 55% of voters said the same.

More. 

It's not 2008, obviously, where everyone feared a catastrophe with banks failing left and right, homes going into foreclosure, and stocks tanking, but the perception of the economy as lousy today because of high inflation is remarkably high as it was in 2008 as indicated by this poll.

Everyone forgets that the vast majority of the job losses came after Obama was elected in 2008, not before, which took a record number of years to recover, setting the stage for Donald Trump. And pandemic fear drove the election cycle in 2020 and not the economy because of the gargantuan bailouts of the people.

Kicker:

Voters view Donald Trump as better able than Kamala Harris to handle the economy, 54% versus 45%.

Food deflation has been exceedingly rare since the 1950s and often comes with a world of other hurts when it does, like in 2009

 

CNBC fact-checks Joe Biden, now that it doesn't matter

 But the article name-checks Donald Trump five times because he's an opponent of Fed decisions.

There's a whole movement out there that wants to End the Fed, composed of Republicans, Democrats, and libertarians, which CNBC is loathe to mention.

Many of them argue that the US 2-year Treasury Note should be the benchmark for the Federal Funds Effective Rate, not the whim of the Fed Chair and the Federal Open Market Committee, who are un-elected, well-connected, and VERY WELL PAID elites who watch out primarily for the interests of the banksters.

For example, despite the disastrous Zero Interest Rate Policy post-Great Recession, DGS2 resisted it and outran DFF throughout the period under Obama and Trump, and anticipated the recent inflationary outburst by starting to rise in the spring of 2021, a full year before the Fed moved to "combat inflation" by raising the funds rate in the spring of 2022. 

Similarly DGS2 also started to fall in November of 2023 despite no change to Fed policy, anticipating the recent decline of inflation rates by almost a year.

The role of the US Treasury Secretary, AS MUCH A CREATURE of the Executive as the Fed Chair, is also huge for interest rates because the Secretary decides how to divvy up the debt securities for auction by duration.

Biden's Treasury Secretary Janet Yellen has been in the news for driving up the issuance in T-bills to 22% when 15% has been customary, which has contributed to longer rates falling and stocks rising, just in time for the election.

But the costs of this have been dramatic, financing deficit spending at the highest rates and driving interest payments on the debt to the third spot in the budget, behind only Social Security and Medicare.

Your reminder that Democrat Speaker Nancy Pelosi owns the two worst episodes of federal spending in excess of tax receipts in the history of the country

 Spending originates in the US House by law.

Democrat Speaker Nancy Pelosi owns the two worst episodes of federal spending in excess of tax receipts in the history of the country, by 310% in 2009 and by 309% in 2020, under Obama (Great Financial Crisis) and then under Trump (Pandemic).

 

Age discrimination is widespread and has been for years, everyone just shrugs

 Don't complain when it happens to you. No one cares.

 

More than half, 56%, of full-time workers in their early 50s get pushed out of their jobs (due to circumstances like a layoff) before they’re ready to retire, according to a 2018 paper published by the Urban Institute.

“Job loss at older ages is really consequential,” said Johnson, a report co-author. He attributes much of that workplace dynamic to ageism.

Just 10% who suffered an involuntary job separation in their early 50s ever earn as much per week after their separation as before it, the Urban Institute paper said. In other words, 90% earn less — “often substantially less,” Johnson said.

Johnson’s research shows that in the aftermath of the Great Recession (from 2008 through 2012), workers 50 to 61 years old who lost a job were 20% less likely to be reemployed than workers in their 20s and early 30s. Those age 62 and older were 50% less likely to have a new job.

 

More.

Vanguard's long term Treasury fund, started in 1986, set a new all time low price record yesterday: What a coincidence

 VUSTX fell to $7.37 yesterday, October 19, 2023.

Until the bond debacle of 2022, the lowest price ever was set way back in 1987, also on October 19, aka Black Monday, when the S&P 500 crashed 20.47% in its worst single day ever.

2022's new all time low for VUSTX at 8.16 had occurred on October 24, missing the anniversary of the old all time low by just three days. Also a very odd coincidence.

The debacle has only continued in 2023, and VUSTX prices haven't seen $8 since September 22nd.

ZIRP since the Great Recession is ultimately to blame for the current mess in long term Treasury securities. The clamor it created for yield drove bond investors long, culminating in the highest nominal prices ever paid for long term UST in March 2020, and the lowest yields. 30Y UST yield crashed to 0.99% on March 9, 2020, 20Y to 0.87%. Yields across the board in 2023 for 2Y to 30Y have set records for this cycle in October. Yesterday 20Y demanded 5.30%, 30Y 5.11%.

No one wants that 2020 and prior junk now, so wherever it sits it's causing collateral problems, at banks, insurance companies, pension funds, et cetera. And on the Fed's balance sheet: As of October 18th the Fed has $1.503922 trillion of UST maturing in more than 10 years on its balance sheet. It basically has to keep it until it matures, and it pays it very little to return to the Treasury as it does.

Are prices done falling?

Confident pretenders said so a year ago this month, and now here we are with $TLT investors down another 12.22% since then.

Given the obscene overvaluation of stocks, and the demand for higher yields by bond investors, cash still seems the safest place to be. VMRXX, Vanguard Cash Reserves Federal Money Market Fund Admiral Shares, has returned 4.00% ytd. You continue to lose to inflation, however.

Nothing is ever perfect.

 

1987 high and low

2022 high and low to the left, all time high and low to the right

Owner-occupied housing levels are still a long way off from those reached pre-Great Recession

 

Besides their bad character, what do Trump and Obama have in common in 2009 and 2020?

 Trump and Obama signed off on the two most fiscally irresponsible periods in post-war history, and Biden two years in looks set to join them.

The Executive is supposed to be a check on irresponsible spending. But both Trump and Obama went right along with it instead of vetoing the outrageous spending of the periods.

What else do they have in common?

Two crises, both of which plunged the country into hysteria.

The Great Financial Crisis did not begin to end until March 2009 when the FASB signaled its intent to suspend mark-to-market rules. The stock market bottomed almost immediately, but as with all cases of mass hysteria it took time for the panic to pass as other sectors recovered "one by one". 

The Pandemic Crisis gripped the country in March 2020, sending millions home from work, stocks plunging, toilet paper into shortage, businesses into bankruptcy, and on and on. With just about everyone vaccinated who was going to be by the end of 2021, the country gradually started to come out of it in 2022, eschewing jabs, masks, and social distancing as it became clear that the Omicron variant was infecting tens of millions despite all those measures.

2020 was the single most fiscally irresponsible year in the post-war since 1953. Federal expenditures, bloated by panicked bailouts, outpaced tax revenues by a whopping 216%.

Only 2009 comes close, at 210%, the second worst year on record.

Third, not shown, was 2010 at 196%, and fourth, not shown, was 2021 at 176%, each a part of the respective crisis periods.

Do you know what else those two years share in common?

Spending bills must originate in the House of Representatives.

In 2009 and 2020 its Speaker just happened to be the same person, as she was in 2010 and 2021.

Nancy Pelosi owns the four most fiscally irresponsible years in the entire history of the post-war. Her two speakerships literally busted out all over. 

US homes were at least 84% overvalued in 2021

 Rounding out the Unholy Trinity of Big Ticket Asset Inflation, Housing joins Stocks and Bonds in similar overvaluation territory in 2021 at about 84%.

In Feb 2012 when housing bottomed after The Great Financial Crisis, a previous inflation-adjusted Case-Shiller home price index chart no longer updated for present years showed that prices had fallen into the top range of US house prices which had prevailed throughout the post-war from the 1950s to the late 1990s. Mind you, the top range of those inflation-adjusted prices.

Thanks to Democrats and Republicans, including Bill Clinton and Newt Gingrich, the American Dream, the nest of the American future, was turned into a mere commodity in the late 1990s, to be churned in the markets for profit.

Long-suppressed long term interest rates have conspired with commoditization to produce valuations which have exploded, making houses unaffordable as nests, which is why your kid is still living in your basement.

The chart below shows the nominal price figures, on an average annual basis through 2021. The blow-off tops in 2022 are even worse (the index topped 308 in June), and are not shown because the year ain't over, and prices are falling.

At an average index level of 260 in 2021, prices were inflated from 141 in 2012 by about 84%, not far below the overvaluation of stocks and bonds at 90% and higher.

 

 

 

 

The percentage holding full-time jobs through September 2022 held above 50%, disappointing the ubiquitous advocates of a Fed interest rate pivot

 Full time as a percentage of civilian population in September was 50.3%, and for 2022 through September averaged 50.15%.

Not bad, considering.

The Fed will see little evidence in this figure that its interest rate increase policy is harming employment.

Stocks on Friday collapsed after a head fake to start the week to within 1.5% of the 52-week lows set a week ago.

Long term investment grade bonds and US Treasury securities also revisited lows from 9/27/22, coming within pennies of those benchmarks.

30-year yield for UST is back up to 3.86%. It was 3.87% on 9/27. At the beginning of 2022, yield was a paltry 2.01% by comparison.

UK gilts are experiencing the same action despite the Bank of England intervening to buy bonds. 

The bond crisis is not over.

With yields soaring across the board no one wants to own the lower paying outstanding issues, which are legion, destroying their value.

But everything in the global economy is based on those, piled up in earnest after The Great Financial Crisis of 2008, and in orgiastic frenzy afterwards during the late pandemic.

Bond yields in 2022 are telling you that they are overvalued by 92%.

Stock market valuation is telling you a similar thing.

From 1938 through 2019 the median ratio of the S&P 500 to GDP is 81. In 2020 we averaged 154, or 90% overvalued.

This is the major deflationary headwind facing the world, the other side of the COVID-19 inflationary shock coin.

Push here, it comes out over there.

Modern central banking cannot escape this conundrum any more than the gold standard could.

The only thing the individual can do in this situation is to owe nothing and save everything, preferably in your hands.

Good luck.

 

 

 

 

 

 

 

 

 

 

 

 

This is as good a day as any to remember that Ben Bernanke's Fed under Obama bailed out the banksters and hung 6.5 million homeowners out to dry

 Bloomberg, August 21, 2011, here:

Fed Chairman Ben S. Bernanke’s unprecedented effort to keep the economy from plunging into depression included lending banks and other companies as much as $1.2 trillion of public money, about the same amount U.S. homeowners currently owe on 6.5 million delinquent and foreclosed mortgages. The largest borrower, Morgan Stanley, got as much as $107.3 billion, while Citigroup took $99.5 billion and Bank of America $91.4 billion, according to a Bloomberg News compilation of data obtained through Freedom of Information Act requests, months of litigation and an act of Congress. ...

Homeowners are more than 30 days past due on their mortgage payments on 4.38 million properties in the U.S., and 2.16 million more properties are in foreclosure, representing a combined $1.27 trillion of unpaid principal, estimates Jacksonville, Florida-based Lender Processing Services Inc. ...

Congress required the disclosure after the Fed rejected requests in 2008 from the late Bloomberg News reporter Mark Pittman and other media companies that sought details of its loans under the Freedom of Information Act. After fighting to keep the data secret, the central bank released unprecedented information about its discount window and other programs under court order in March 2011.

 

Full time jobs as a percentage of population now average 48.3% through August 2021

 Full time as a percentage of population rose to 49.18 in August after peaking in July, as is typical, at 49.28.

The measure ebbs after summer and flows in the spring, mirrored by a peak oscillation in usually part-time employment in the winter, which is a much smaller part of the population, historically averaging 27+ million in the years before the latest catastrophe.

The 48.3% average to date in 2021 is one full point ahead of the average for 2020 at 47.3%, but remains far off the 2019 average at 50.4%, which itself hardly represented a return to what was normal before the Great Financial Crisis.

Full time work never recovered after GFC I, which exposed the hollowed out character of the US economy after decades of out-sourcing, off-shoring, and mass low-wage immigration.