Wherein Phattonez demonstrates that another bubble is about to burst

[phattonez]

Yes that's right, I will show based on historical precedent that the economy is about to go through another crash like 2000 and 2008. Yes, we can't afford it right now, yes, things will get worse, but this is what happens with a bubble economy where all growth is based on inflation and distorted economic numbers. Now, to the proof.

Hmm, capital spending soars to ridiculous numbers before a crash. Interesting, sounds downright Austrian.

Notice how monetary velocity starts to fall approximately 2 years before the start of the official start of the recession. Hmm.

Notice how personal savings starts to shrink right before the start of the recession. Hmm.

Remember the bubble that popped in 2008? Hmm.

I hope you have some money saved, because we're in for another wild ride.

 

[Khayembii Communique]

I don't see how you showed anything here

 

[Kushinator]

This thread is an epic failure.

Hmmm.

 

[Visbek]

uh huh

You're looking at two recessions, hardly enough to make something a "historical fact." More importantly, you haven't shown any causation here. Does an increase in new orders, or a rise in M2, cause a recession? Clearly not, since the last two recessions were caused by the bursting of two completely different bubbles.

Or, let's look at new home sales prices. They only slightly drop during most recessions, whereas in 2007 the recession was caused by the bursting of a real estate bubble.

A more persuasive reading is that positive indicators happen to drop when a recession hits. It's not that when new orders or home prices hit a magic number, a recession results.

 

[phattonez]

uh huh

You're looking at two recessions, hardly enough to make something a "historical fact." More importantly, you haven't shown any causation here. Does an increase in new orders, or a rise in M2, cause a recession? Clearly not, since the last two recessions were caused by the bursting of two completely different bubbles.

Or, let's look at new home sales prices. They only slightly drop during most recessions, whereas in 2007 the recession was caused by the bursting of a real estate bubble.

A more persuasive reading is that positive indicators happen to drop when a recession hits. It's not that when new orders or home prices hit a magic number, a recession results.

If you want causation, I'm more than happy to explain how this phony economy is going to burst. However, people here seem to like correlation, so this is for their sake. But alas, everything is sunshine and lollipops to these people.

 

[phattonez]

The strongest evidence really is that first image that shows just how crazy capital expenditures get right before the recession starts. In fact, we haven't had real capital growth for the past decade, even nominally. That should frighten everyone exceedingly.

Here is that same graph corrected for inflation with CPI.

 

[phattonez]

Notice how either manufacturing employment or construction employment always goes negative before a recession? Notice that manufacturing employment is now negative.

 

[Visbek]

The strongest evidence really is that first image that shows just how crazy capital expenditures get right before the recession starts.

...and again, unless you're saying there is a causal element, two recessions doesn't prove anything.

Nor would it make sense to make such a claim, since the cause of those two recessions were so different.

You'd also be hard pressed to say that consumers are exhibiting irrational exuberance, or insane spending. If anything, consumption nosedived during the recession, and is now starting to come back.

Notice how either manufacturing employment or construction employment always goes negative before a recession?

Are we reading the same chart?

Those employment figures dropped for years before the 1991 recession, again in 1994, and were an effect rather than a cause of the 2007 recession?

Are you really not noticing the various bumps since the 1970s? Plus.... Notice how manufacturing employment has been falling since the 1970s?

Notice how manufacturing employment has been falling as a percentage of the workforce since the 1950s, while productivity per worker has steadily risen?

Why would we classify changes in 10% of the workforce -- which do not correlate to actual levels of output anyway -- as an indicator of a recession?

In other words, if these factors aren't causative, and since we don't see a big bubble bursting right now that will cause the next recession, and since the data you're citing isn't conclusive anyway, then I don't see how you have much of a point.

 

[phattonez]

...and again, unless you're saying there is a causal element, two recessions doesn't prove anything.

Nor would it make sense to make such a claim, since the cause of those two recessions were so different.

You'd also be hard pressed to say that consumers are exhibiting irrational exuberance, or insane spending. If anything, consumption nosedived during the recession, and is now starting to come back.

Malinvestment.

Savings falls right before the start of a recession.

ABCT.

Are we reading the same chart?

Those employment figures dropped for years before the 1991 recession, again in 1994, and were an effect rather than a cause of the 2007 recession?

Did I ever claim them to be a cause?

Are you really not noticing the various bumps since the 1970s? Plus.... Notice how manufacturing employment has been falling since the 1970s?

Yes it has been falling, but look at how sharply it falls immediately preceding a recession. I'm merely pointing out correlations.

Notice how manufacturing employment has been falling as a percentage of the workforce since the 1950s, while productivity per worker has steadily risen?

Why would we classify changes in 10% of the workforce -- which do not correlate to actual levels of output anyway -- as an indicator of a recession?

Because historically falls in employment precede the official start date of a recession.

In other words, if these factors aren't causative, and since we don't see a big bubble bursting right now that will cause the next recession, and since the data you're citing isn't conclusive anyway, then I don't see how you have much of a point.

An indicator does not need to be causative to predictive.

 

[Ahlevah]

Remember the bubble that popped in 2008? Hmm.

I hope you have some money saved, because we're in for another wild ride.

Remember that the median sales price for homes was drawn down when a lot of homes were sold out of foreclosure in cash sales. As those are cleared and more homes are financed, the median price will rise. That's why we see big pops in cities like Phoenix that were hit hard during the recession.

 

[JP Hochbaum]

If you want to show any bubble bursting I would go with the credit bubble. You know, the ones that always burst, the ones that always come from far too little currency....

 

[Onion Eater]

Yes that's right, I will show based on historical precedent that the economy is about to go through another crash like 2000 and 2008.

Now, to the proof.

What if there was an organization called the Post-Autistic Astronomy Network?

Prediction in astronomy would consist of statements like, “five of the last nine craters we have observed were over 100 meters deep; therefore the next one probably will be too.” Discovery in astronomy would consist of finding a crater on the moon that nobody had written about yet, describing it and then naming it after oneself. The only difference between popular essays and refereed journal articles would be that the latter would include statistics, like the average depth of a crater measured at various points in its interior.

If Stephen Hawking asked to have a telescope pointed into deep space so that he could look for evidence of black holes, he would be banned for life from the observatory. Real-world astronomers would point at him behind his back, whisper the word “autistic” and make snarky comments about him on the internet.

Source: A Non-Mathematical Explanation of the Axioms