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Notice a
pattern here?
"The
Last Time Wall Street Was This Negative, We Were In A Recession" (Business
Insider)
As second
quarter earnings season begins, companies are slashing earnings guidance at
rates not seen in the last three years.
Tobias Levkovich, who heads Citi's U.S. equity strategy
research, points out in a note to clients that only 30 percent of recent Wall
Street analysts' earnings estimate revisions have been positive.
The two times
this number was lower in the last 13 years, the U.S. economy was in
recession. Note that the ratio has taken a cliff-dive recently while the
S&P 500 remains elevated.
"Vol.
280 - Global Manufacturing PMI Signaling a Recession" (Pinnacle
Digest)
In June 2012,
the US PMI fell below a reading of 50 for the first time since the Great
Recession ended over three years ago. It rose only 0.1 to 49.8 in July.
Manufacturing has been a key source of growth in the US since the recession
ended in June 2009. This latest contraction is disturbing.
The last time
the PMI contracted and stayed below 50.0 for more than a month, we entered
the most dramatic economic recession since the Great Depression.
"Gary
Shilling: 25 Out Of The Last 27 Times Retail Sales Collapsed Like This We
Were In A Recession" (Business
Insider)
Retail sales
have been negative for three straight months. In June they fell 0.5 percent.
And Gary
Shilling, told Bloomberg TV that the U.S. economy is already in a recession
and that the retail sales numbers signal a recession:
"You look
at retail sales there were negative for three consecutive months, April, May,
June. That's happened only 27 times there were first reported in 1947 and in
25 of the 27 it was in a recession or within three months of a
recession."
"DAVID
ROSENBERG: The Last Two Times Export Orders Collapsed Like This, We Were In A
Recession" (Business
Insider)
Exports appear
to be collapsing around the world. Data out of Germany this morning showed
exports falling 1.9 percent, and South Korea, the canary in the coal mine has
seen exports crumble.
Now, Gluskin Sheff's David Rosenberg
writes that soon we'll find "that the U.S. prints a negative-GDP reading
on the back of a negative export shock that does not appear to be in any
forecast".
He writes that
70 percent of real GDP growth since the "recovery" began three
years ago has come from export volumes and inventory investment.
Then the
declining pattern of ISM export orders – which declined from 59.0 in
April, to 53.5 in May, 47.5 in June, and 46.5 in July – is naturally
worrisome.
In fact,
Rosenberg points out that there is an 81 percent correlation between annual
growth in U.S. exports and ISM new orders, and that this level of new export
orders coincided with the last two recessions.
Michael J. Panzner
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