Bernanke: Recession Is Still Over


My uncharitable colleague Brian Doherty questions the absolutely inarguable fact of Federal Reserve Chairman's Ben Bernanke's awesomeness, but doesn't give Bernanke credit for his greatest talent: his Oz-like ability to maintain confidence in his genius in the face of absolutely no results.

After Bernanke announced today that the end of the recession was nigh, the stock market applauded. But the rest of the economy gave a Bronx cheer. Among other gangrene shoots:

This week brings another "surprise" increase in jobless claims. You might not be all that surprised.

The Mortgage Bankers Association says 13.2 percent of mortgages on one-to-four-unit properties are in default. The foreclosure fad continues to catch on from coast to coast and in between. How long can the craze last? Mish's Global Economic Analysis and School of Dance predicts no market bottom until 2102, substantially more pessimistic than the 2012 bottom predicted by other doomsayers.

Seventy-eight bank failures and counting have the cash-strapped FDIC ready to work for food.

Sample company performance: Caterpillar's year-to-year sales have been halved. Why is there so little demand for Caterpillar machinery? Among other things, because new housing starts are off nearly 40 percent [pdf] from 2008 levels.

There are also signs that the stimulus-engorged rally in leveraged loans is coming to an end, leaving debt-heavy companies without sources of even more debt. This is actually good news because it will help the brute-force deleveraging of the economy—one of the few positive trends out there. But it's not going to create growth anytime during Bernanke's reappointment campaign.

Updates: It's official: The recession did not end in May or June. July, anyone? Also Mish has corrected the 2102/2012 typo I quibbled on.