Money and Finance
- Hussman Weekly Market Comment: Roach Motel Monetary Policy
Strong leading indicators such as the CFNAI and the Philly Fed Index have been weak for many months, and the deterioration in new orders has moved from a slowing of growth to outright contraction in recent months. In the order of events, a slowing in...
- Hoisington Q3 2012 Letter
Growth Recession Entering the final quarter of the year, domestic and global economic conditions are extremely fragile. Across the globe, countries are in outright recession, and in some instances where aggregate growth is holding above the zero line,...
- Hussman Weekly Market Comment: Have We Avoided A Recession?
In our view, it is very difficult to obtain useful views about economic direction using the standard "flow of anecdotes" approach that is the bread-and-butter of many analysts. The economic data reported daily are a mix of leading, coincident and lagging...
- Hussman Weekly Market Comment: A Reprieve From Misguided Recklessness
An immediate note on market conditions. Last week's market advance cleared out the "predictable" expectation for constructive returns that briefly emerged from the recent market selloff. That doesn't mean that the market can't advance further,...
- Hoisington Q4 Letter
Factoring in a 4% Q4 growth rate, the U.S. economy expanded by 3% in real terms from the 4th quarter of 2009 through the 4th quarter of 2010. Despite this rise in GDP, the unemployment rate remained stubbornly high at 9.6% in the last quarter of 2010,...
Money and Finance
Hussman Weekly Market Comment: When Rich Valuations Meet Poor Economic Data
The advance estimate for first quarter GDP came in decidedly below expectations at a 2.5% annual rate, but even that rate belies the fact that real final sales slowed to just 1.5% growth, from 1.8% last quarter. The remaining 1% of the first-quarter growth figure – 40% of the total – represented the accumulation of unsold inventory. My view remains that the U.S. is unlikely to avoid joining the rest of the developed world in a global recession that is already underway, and may well be already underway in the U.S. once data revisions are reflected. The year-over-year growth rates of real GDP and real final sales have declined to just 1.80% and 1.87% respectively, which is the first time in this economic cycle that both have simultaneously declined from above 2.0% to below 1.9% - an occurrence that has been a hallmark of every post-war recession, with remarkably few false signals for such a simple measure. The Fed’s ability to kick-the-can in increments of a few months at a time may allow this time to be different, but investors should recognize that they are relying on that proposition.
It is certainly not the case that economic recessions precisely overlap with bear markets. Rather, bear markets are frequently underway before recessions are evident, and typically end several months before the recessions do. For that reason, market returns aren’t reliably abysmal when measured from the very start of a recession to its very end. Even so, note the shaded recessions in the chart below. Bear markets in equities occurred in 1956, 1961, 1970, 1973-74, 1981-82, 1990, 2000-02, and 2007-09. Of course, there are many less severe but still damaging market declines that occurred in the absence of recession.
- Hussman Weekly Market Comment: Roach Motel Monetary Policy
Strong leading indicators such as the CFNAI and the Philly Fed Index have been weak for many months, and the deterioration in new orders has moved from a slowing of growth to outright contraction in recent months. In the order of events, a slowing in...
- Hoisington Q3 2012 Letter
Growth Recession Entering the final quarter of the year, domestic and global economic conditions are extremely fragile. Across the globe, countries are in outright recession, and in some instances where aggregate growth is holding above the zero line,...
- Hussman Weekly Market Comment: Have We Avoided A Recession?
In our view, it is very difficult to obtain useful views about economic direction using the standard "flow of anecdotes" approach that is the bread-and-butter of many analysts. The economic data reported daily are a mix of leading, coincident and lagging...
- Hussman Weekly Market Comment: A Reprieve From Misguided Recklessness
An immediate note on market conditions. Last week's market advance cleared out the "predictable" expectation for constructive returns that briefly emerged from the recent market selloff. That doesn't mean that the market can't advance further,...
- Hoisington Q4 Letter
Factoring in a 4% Q4 growth rate, the U.S. economy expanded by 3% in real terms from the 4th quarter of 2009 through the 4th quarter of 2010. Despite this rise in GDP, the unemployment rate remained stubbornly high at 9.6% in the last quarter of 2010,...