Saturday, February 14, 2009

Worst recession since the Great Depression? Not!

This graph shows unemployment claims (%) since 1971:

Could this become the worst recession since the Great Depression? It's possible, but right now we're not even close.

Source.
Posted by at 7:31 AM
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42 comments:

  1. AnonymousFebruary 14, 2009 8:26 AM

    This economic cycle bottomed out back in 2007, at least according to Lance.


    Who claims to know about these things.



    For what that is worth...

    ReplyDelete
  2. UnknownFebruary 14, 2009 8:55 AM

    At this point we really have no idea where things are going to end up. Lots of people have opinions, and frankly the banking system is still disfunctional as there is still far too much bad debt that they are all hiding.

    So I guess my short answer is that in my opinion, we won't bottom out until we deal in an honest way with the remaining bad debt.

    ReplyDelete
  3. AnonymousFebruary 14, 2009 9:53 AM

    Those other spikes dont have trillions of dollars of bailouts to keep the numbers down.

    I'm curious as to how big the spike gets AFTER all the American car companies (and other cash losing middle American companies) go out of business.

    ReplyDelete
  4. LanceFebruary 14, 2009 10:07 AM

    "Those other spikes dont have trillions of dollars of bailouts to keep the numbers down."

    I guess you never heard of Silverado, Chrylser, etc. etc. ?

    ReplyDelete
  5. AnonymousFebruary 14, 2009 10:53 AM

    Gay Oil Guru,

    This is for you!

    http://www.youtube.com/watch?v=4bHZRSlhJxY

    (peak oil debunked in 4 minutes)

    Or is that you in the video?

    ReplyDelete
  6. AnonymousFebruary 14, 2009 12:14 PM

    "I guess you never heard of Silverado, Chrylser, etc. etc. ?"

    Silverado?

    Did you just mistake a truck for a company?

    LMAO

    ReplyDelete
  7. AnonymousFebruary 14, 2009 1:50 PM

    "Did you just mistake a truck for a company?"

    I think he is mistaken thousand/million dollar bailouts with TRILLION dollar bailouts as well.

    ReplyDelete
  8. LanceFebruary 14, 2009 3:35 PM

    "I think he is mistaken thousand/million dollar bailouts with TRILLION dollar bailouts as well."

    Bubbleheads still haven't grasped the concepts of the time value of money/inflation.

    And that's why they can't understand/believe that house prices will never return to what they were pre the 2000 boom.

    ReplyDelete
  9. AnonymousFebruary 14, 2009 4:00 PM

    No comment on the truck huh?


    What exactly is Silverado's main product line lance?

    "Bubbleheads still haven't grasped the concepts of the time value of money/inflation. "

    Ooh, but you do huh? Mr "we have already indisputably bottomed out" (2007).

    "And that's why they can't understand/believe that house prices will never return to what they were pre the 2000 boom."

    Wow, way to move the goalposts lance.

    Want me to dig up a few of your previous predictions where you claimed prices would barely fall, if at all?

    There is zero chance DC is going to return to pre-2000 levels in nominal dollars. When all is said and done it will certainly return to fundamentals.

    ReplyDelete
  10. AnonymousFebruary 14, 2009 5:07 PM

    Lance said "Buy now or be priced out forever.", that was back in 2006. DC was the land that ruled the world and was the center of all culture and power. Then when sales dropped he screamed the europians were rich and going to buy us all up, so buy before you could not buy and become his/thier peasant.

    ReplyDelete
  11. AnonymousFebruary 14, 2009 5:22 PM

    Good point Anon 5:07.

    Lets not forget he also claimed that the global economy was entering a "new paradigm" in which DC would be a "pan-global node."

    This magic change would free DC real estate of such mundane constraints as salaries or fundamentals of any kind. The sky was the limit, just look at Manhattan...


    Of course like all his other predictions these turned out to be a total pile of crap. Hasn't slowed him down one step though.

    ReplyDelete
  12. AnonymousFebruary 14, 2009 6:50 PM

    I can't help but wonder why Lance even keeps posting here. Its great comedy for us, but for him isn't it kinda embarrassing?

    ReplyDelete
  13. LanceFebruary 14, 2009 8:45 PM

    It's funny watching BHs show how ignorant they are.

    Silverado Savings and Loan collapsed in 1988, costing taxpayers $1.3 billion. Neil Bush, son of then Vice President of the United States George H. W. Bush, was Director of Silverado at the time. Neil Bush was accused of giving himself a loan from Silverado, but he denied all wrongdoing.[2]

    http://en.wikipedia.org/wiki/Savings_and_Loan_Crisis#Silverado_Savings_and_Loan

    ReplyDelete
  14. AnonymousFebruary 14, 2009 10:03 PM

    "Continued claims as Percent Covered Employment" ... ?!

    You couldn't find a chart for "Unemployment rates vs. sunspot activity?"

    I'll take grasping at statistical straws for $1,000, Alex.

    ReplyDelete
  15. AnonymousFebruary 14, 2009 10:58 PM

    "Silverado Savings and Loan collapsed in 1988, costing taxpayers $1.3 billion."

    Lance, you realize that a trillion is a thousand billion right?

    We are going on 2 TRILLION dollars in bailouts. Thats a markup of 2,000% of the example you posted. Things havent inflated that much since 88. If you think so, you really are retarded and not just acting the part.

    ReplyDelete
  16. AnonymousFebruary 15, 2009 12:19 AM

    Can you imagine the dollar menu at mcdonalds in 1988 being a $2,000 menu today?

    Those are some expensive chicken nuggets!

    ReplyDelete
  17. LanceFebruary 15, 2009 12:37 AM

    Anon 10:58, I think it is you who is retarded. I mentioned companies that got bailed out ... including Chrylser ... and Silverado. Do some reading, Silverado was just one of many banks that got bailed out. The sum total of bailouts then was far less than now .. but that doesn't matter. The larger number now will only lead to greater inflation ... and hence the same result. There's no free lunch out there. Any money being given out by Obama is ultimately coming from the taxpayer. I guess it's makes people feel good to think it's free money. It's not.

    ReplyDelete
  18. AnonymousFebruary 15, 2009 2:30 AM

    "Silverado was just one of many banks that got bailed out. "

    The BH don't remember Savings and Loans or the FSLIC. An entire financial industry collapsed and took shopping centers, housing, office complexes with it.

    Old Court S&L, the Resolution Trust Corporation's liquidation auctions in the early 1990's.

    My place in Alexandria plunged 5% and the assessment stayed flat for 10 years.

    Finally in 1998, the prices in this area began climbing back to normal, reverted to the mean around 2006.

    ReplyDelete
  19. AnonymousFebruary 15, 2009 2:49 AM

    This price trend is in the public records. A big drop (5 to 10%) in 1992-1993, otherwise flat in the 1990's. Prices track back to normal. Another flat period, 2006, 2007, 2008, 2009.

    The recent price drop is less than the one in the early 1990's on a percentage basis. It's also spread over a longer period, in spite of all the news.

    2009   $385,640  
    2008   $398,747  
    2007   $415,996  
    2006   $396,300  
    2005   $332,500  
    2004   $261,200  
    2003   $218,800  
    2002   $139,400  
    2001   $124,200  
    2000   $115,500  
    1999   $115,500  
    1998   $120,600  
    1997   $120,500  
    1996   $116,800  
    1995   $122,400  
    1994   $122,300  
    1993   $120,000  
    1992   $120,400  
    1991   $129,200  

    (tax records for a representative row house in 22305)

    ReplyDelete
  20. AnonymousFebruary 15, 2009 6:09 AM

    Ah yes... "tracked back to normal"

    Which is to say more than tripling in less than ten years?

    Pass the crack pipe this way I think I missed my hit.

    ReplyDelete
  21. AnonymousFebruary 15, 2009 6:12 AM

    "I think it is you who is retarded."-lance

    LMAO

    Hey Lancy, why don't you tell us that story you used to tell about how we had already passed bottom back in 2007 and all the bitter bubbleheads were going to be priced out forever...

    Or even better, tell the one about how subprime mortgage defaults weren't going to be an issue in the slightest!

    While you are at it... you should tell us that story you used to tell about how prices wouldn't drop one bit in the DC area...

    ReplyDelete
  22. AnonymousFebruary 15, 2009 6:45 AM

    "I think it is you who is retarded. I mentioned companies that got bailed out ... including Chrylser ... and Silverado. Do some reading, Silverado was just one of many banks that got bailed out."

    Did you forget that your mention of companies that got bailed out was in reply to my comment about the previous spikes didnt have TRILLION DOLLAR BAILOUTS?

    I didnt say there has never been a thousand or million dollar bailout....I SAID TRILLIONS!!!!!


    "The sum total of bailouts then was far less than now .. but that doesn't matter."

    Sure it does Lance. 2.5 trillion dollars can pay far more salaries than say a hundred thousand dollars. Pull out your calculator lance, we are dealing with large numbers here and it seems your IQ is pretty low.

    ReplyDelete
  23. LanceFebruary 15, 2009 8:49 AM

    "Finally in 1998, the prices in this area began climbing back to normal, reverted to the mean around 2006."

    Very good point. Not having experienced what houses costs before the S&L collapse, BHs think the low prices they saw in the 90s were normal. They don't understand that prices were just temporarly "stuck" ... as they are now. And that once the financial markets righted themselves, prices reverted to where they would have been had there not been a problem with the financial markets. They grew up seeing their parents getting homes at a big discount, and want to know why they can't do the same.

    ReplyDelete
  24. LanceFebruary 15, 2009 8:56 AM

    "Lance. 2.5 trillion dollars can pay far more salaries than say a hundred thousand dollars."

    Not when you factor in inflation. The more $ the Obama adminstration throws at the problem, the more they will ensure that James' graph doesn't spike (which was afterall the original reason I mentioned the Silverado and Chrysler bailouts), but the more $ that are out there, the more inflation we will guarantee ourselves ... which of course results in devaluation of a currency.

    Like I've been saying over and over, to borrow a fixed amount at fixed interest rates to buy a home at a fixed price is a winning combination when future inflation will guarantee you that the nominal price of that same home will mean larger payments in the future. Bottom line is debtors do well in inflationary periods. The more inflation, the better they do. The prices of everything, and wages eventually, all go up ... While their mortgage payments stay the same. And yes, everything that isn't locked in goes up ... including your monthly rent payments.

    ReplyDelete
  25. AnonymousFebruary 15, 2009 9:57 AM

    "Very good point. Not having experienced what houses costs before the S&L collapse, BHs think the low prices they saw in the 90s were normal. They don't understand that prices were just temporarly "stuck" ... as they are now. And that once the financial markets righted themselves, prices reverted to where they would have been had there not been a problem with the financial markets. They grew up seeing their parents getting homes at a big discount, and want to know why they can't do the same."

    Another spectacularly stupid assessment from our little village's idiot.

    ReplyDelete
  26. AnonymousFebruary 15, 2009 10:17 AM

    Here is another house in Alexandria. This is a small SFH in fashionable Del Ray.

    2009   $656,210  
    2008   $656,210 < Flat to rising 
    2007   $620,295 < nominal fall 
    2006   $636,200 < Flat  
    2005   $502,800 < Continue  
    2004   $442,100 < Revert to Mean 
    2003   $352,800  
    2002   $290,300  
    2001   $262,500 < Begin Revert
    2000   $227,300  
    1999   $214,300  
    1998   $202,200  
    1997   $200,300  
    1996   $197,000  
    1995   $196,700  
    1994   $191,300  
    1993   $193,900  
    1992   $192,500 < S&L Crisis
    1991   $207,600  

    The same pattern as before. Big price fall in 1992. Prices flat in the 1990s. Then they revert to the mean in 2001. In 2006, prices show a nominal pullback and begin climbing again.

    Of course, the government did not try to juice the economy in the 1990s, so it might be different this time.

    ReplyDelete
  27. AnonymousFebruary 15, 2009 10:26 AM

    "Another spectacularly stupid assessment from our little village's idiot."

    That's worse than the BH mantra that 1) sellers are stubbornly refusing to drop prices, 2) any year now, prices will fall, 3) paying rent is an investment, 4) Arlington (and Alexandria and DC) are just like PWC and Dumfries?????

    ReplyDelete
  28. AnonymousFebruary 15, 2009 11:18 AM

    Cool, a strawman from a housing pumper, couldn't have guessed that might be coming...


    Yes, Arlington, Alexandria and DC are all exactly the same, as is PWC, Dumferies and Detroit.

    (that is sarcasm you dimwit)

    ReplyDelete
  29. AnonymousFebruary 15, 2009 12:18 PM

    "(that is sarcasm you dimwit)"

    Another content-less post, this after I post links and data tables.

    ReplyDelete
  30. AnonymousFebruary 15, 2009 2:31 PM

    Data tables?

    Tax assessments from a single house with idiotic commentary?

    If you want to be taken seriously try acting like an adult.

    ReplyDelete
  31. AnonymousFebruary 15, 2009 3:40 PM

    Here is another column of the data table.

    2009   $3,562,736 < BH befuddled 
    2008   $3,598,723  
    2007   $3,493,900  
    2006   $3,493,900  
    2005   $3,478,700 < Flat, like 1990's 
    2004   $2,640,000  
    2003   $2,200,000  
    2002   $1,471,700  
    2001   $891,800  
    2000   $716,200 < Revert to mean 
    1999   $663,900  
    1998   $658,800  
    1997   $646,400  
    1996   $645,300  
    1995   $644,900  
    1994   $639,800  
    1993   $586,400  
    1992   $576,000 < S&L Crisis 
    1991   $587,800  

    Valuations have been flat for the last 4 or 5 years in Alexandria. The BH plunge has not happened. This is not a prediction, these three data samples are representative of tens of thousands of other data tracks in the historic database.

    (hang on for the inflation!)

    ReplyDelete
  32. AnonymousFebruary 15, 2009 5:27 PM

    "Not when you factor in inflation."

    Lance, You seriously need a calculator. The average cost of everything hasnt went up 2,500% since the last insignificant bailouts you mentioned.

    Until the minimum wage guy working at mcdonalds salaries went up to $10,000 per hour, your inflation story doesnt hold water. (cause they still make make something like $5 an hour) The only thing that has went up 2,500% was the amount of money used in bailouts.

    ReplyDelete
  33. LanceFebruary 15, 2009 6:04 PM

    The only thing that has went up 2,500% was the amount of money used in bailouts.

    And doesn't that give you an inkling what direction house prices ... and everything else not "locked in" is going to head?

    i.e., you haven't seen the inflation yet that's going to happen ... but trust, me it's going to happen ... and it's going to be a wild ride. You can't expect the government to print close to $800 B in new money and for it to not effect the value of the currency. Especially since much of that isn't going to produce anything new and one time (as in "seed money") but to meet ongoing expenses that will need to be continually funded for many years to come.

    ReplyDelete
  34. LanceFebruary 15, 2009 6:08 PM

    Anon 3:40, your data graphs are very telling ... and kind of scary. So, if we got that kind of delayed price rise coming from those relatively far smaller bailouts in the 90s, we should expect a far far greater price rise when we end the flat period following this bailout period ... ?

    Wow. I wonder if I can get more debt. I wanna be paying back 2009 debt with 2015 dollars!

    ReplyDelete
  35. AnonymousFebruary 15, 2009 9:00 PM

    Donno Lance, I don't read that much into the data. I'm still stuck on how wrong the BH's were.

    "Any day now, it'll come inside the beltway, to your city, your neighborhood, your street, your house."

    WTF, I've got thousands of data streams at my fingertips and they show the same pattern. The 1990's were flat, then all of a sudden about 1999, 2000, it let loose and prices reverted to the mean.

    About 2005, 2006, prices went flat AGAIN. Exactly when the BH promised that prices would plunge to half or a third, prices leveled off. I hope that even a hard-core BH won't say that $3,598,723 dropping to $3,562,736 is a PLUNGE, even though it is a drop of $35,987. It's ONE PERCENT, in the noise. Julie and Todd paid a mill for the place and have 2.5 mill in appreciation. 35 grand is pocket money to them.

    I'm guessing that in a year or two, when the Obama money hits, bingo, the BH's will be crying again, as prices make up for lost time. Lock in a fixed rate soon and ride the wave.

    Oh, that last data table was 319 Mansion Dr. One of the pricier cribs around.

    ReplyDelete
  36. LanceFebruary 15, 2009 10:16 PM

    Anon 9:00, I hear ya ... agree with ya.

    But you know what we'll hear then? "Well, if you adjust for inflation, the prices have really gone down ... " What'll fly completely over their heads is that those who locked in pre-inflation won't give a f about whether the house in "real dollars" went up or down, all they'll know (or care about) is that they'll have mortgage balances that by future standards will be pitifully low. It's like it was in the '80s ... many of us were looking at mortgage rates approaching 20% and mortgages of "over a hundred thousand dollars!" ... as our parents were paying 5% on their $20,000 mortgages (that had started out as $25,000 mortgages ...)

    Time value of money. BHs have a problems understanding that concept for some strange reason.

    ReplyDelete
  37. AnonymousFebruary 16, 2009 7:13 AM

    "But you know what we'll hear then? "Well, if you adjust for inflation, the prices have really gone down ... "

    A couple years ago, the BH used to brag about all the moola they saved by paying rent.

    After the stock market crashed last year, they went quiet, as if they lost a bunch of their savings.

    Over in Nova Bubble, they're still trying to buy but keep "losing out" because they're not willing to pay the price. Some are reporting problems with mean landlords.

    To be fair, home ownership is not the cat's meow. You have to set aside cash for repairs and upgrades and be able to do some of the work yourself.

    ReplyDelete
  38. AnonymousFebruary 16, 2009 9:07 AM

    Hi KH!

    Still not exactly setting the grading curve are you?

    ReplyDelete
  39. LanceFebruary 16, 2009 9:13 AM

    "You have to set aside cash for repairs and upgrades and be able to do some of the work yourself."

    I look at it as the opportunity to do the work myself ... or at a minimum shop for the most economical/best contractor. When you rent you take what's given to you ... and in the end the landlord makes sure you pay for it.

    ReplyDelete
  40. AnonymousFebruary 16, 2009 10:04 AM

    "Still not exactly setting the grading curve are you?"

    Someone has to keep the butter knives in the drawer company.

    ReplyDelete
  41. AnonymousFebruary 16, 2009 3:37 PM

    "I look at it as the opportunity to do the work myself ... or at a minimum shop for the most economical/best contractor. When you rent you take what's given to you ... and in the end the landlord makes sure you pay for it."

    Ah yes, one more example of why economics should be a required course in highschool.

    The vast majority of renters have a lease lance. The landlord can't decide to raise rent within the period of that lease any more than the tenet can choose to pay less.

    ... and before you go off into one of your typically juvenile misunderstandings of economics, some variation on "the landlord HAS to make money!"

    No, the landlord doesn't have to make money. Like any business it is perfectly possible to lose money.

    Parents! Don't let your kids grow up to be lances. Read to them as children, help them with their homework, and most importantly... teach them to think!

    ReplyDelete
  42. AnonymousFebruary 28, 2009 8:46 PM

    This isn't worse than the great depression. Any economist who actually says this is an idiot. And any news man or woman who reverberates it is worse. This is the worst recession since 25 years ago, but not even close to the great depression.

    Though if Obama keeps following FDR's model, it could be.

    ReplyDelete

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