DOUBLE DIP RECESSION (DEPRESSION?): Handwriting on the wall?

Latest ECRI economic data revisits 2007 pre-recession levels

Mish's take on the ECRI data

It's pretty damn clear, despite the refusal to admit the reality, that we've re-entered a double dip recession.

The recent unemployment data, exacerbated by the BP disaster, as well as mounting pressures to fire public (state and local) workforces will continue to decrease demand and likely create even more foreclosure risk. And as a previous post demonstrated, we had the lowest New Home Starts data since data started to be recorded (adjusted for population). The stimulus package was wasted paying benefits while providing no return in goods/services to the taxpayer (community service and/or infrastructure improvement). Additionally, bailing out TBTF banks meant they just took the money and invested it in Government debt, the interest for which comes out of taxpayer pockets.

And now we have the additional uncertainty, as well as the failure to deal with Credit Defaults Swaps, created by "FINREG" (Financial Regulatory reform). There is NO DOUBT IN MY MIND that this will add to deflationary pressures as banks come to terms with the new rules and regulations.

Don't get me wrong, we DEFINITELY NEED to regulate this financial casino we have created. Opaque derivatives trading need to be brought into the light of day. We need to limit the equally secret Credit Default Swaps markets to ONLY INSURABLE INTEREST so we don't have people trying to commit financial "arson" by buying insurance on assets they don't even own. (eventually I'll address this further in another post).

And now we have a Tropical Depression heading for the Gulf, which threatens to spew all of that oil up onto the beaches, if not picking it up and flying it inland. Let's face reality.. Two more months of 100K barrels of oil per day is going to most likely wind up impacting the keys and even finding it's way into the Gulf Stream.

And there's always the European uncertainty. But it's possible that, with this renewed interest in necessary, but deflationary, austerity measures, the US will HAVE TO follow suit. If we don't we may find our own currency under attack by the supra-national hedge funds.

I'm really looking for some good news out there.. I REALLY AM!!

If you have some... feel free to comment.

Scrutinizer