A wide array of supposedly smart people are now informing us that the economy is slowing and may slip back into recession. The new phrase being used to describe our economic condition is ‘stall speed.’
Well how about that? Stall speed, they say. Is the economy truly slowing? Is it really? Or perhaps did the real economy — the one in which we live and operate, not the one fabricated by Wall Street pundits and Washington politicians — never truly rebound?
I ask because I firmly believe that our domestic economy never truly rebounded in a meaningful fashion over the last few years.
I cautioned people to avoid the regular smoke and mirrors emanating from our financial and political hotbeds in spring 2010 when I first equated our economic malady as akin to “walking pneumonia.”
I wrote then, U.S. Economy = “Walking Pneumonia”:
We were not healthier then and we are not meaningfully healthier now. How do we know?
We received a more honest and complete economic reading a few days ago in the revisions to prior year’s GDP reports. These reports received limited attention.
How can we accurately measure our current condition if we do not appreciate and understand the depth of our ‘walking pneumonia’? We can’t, although the aforementioned strategists and Washington wizards would rather you not know that.
On that note, let’s look at the report released by the Bureau of Economic Analysis last week highlighting the fact that our recession ran deeper then and, in my opinion, continues to significantly impact us now:
Negative real GDP readings to me spell one thing. We have never officially gotten out of recession despite all the sugar highs produced by Uncle Sam and executed by his boys, Ben and Tim. Talk of green shoots, V-shaped recovery, and assorted other tricks were designed by those who are more interested in your vote, your spending, your purchasing overpriced securities, and your daily trading than your long term economic well being.
As an eternal optimist, though, let me also share with you how I concluded my March 2010 commentary referenced above:
Navigate accordingly and spread the ‘sense on cents.’
Larry is a Wall Street veteran, having worked at such banks as First Boston, Bear Stearns and Union Bank. He blogs at www.senseoncents.com