The economy has never really recovered since the 2007-2009 financial crisis
October 05, 2012
By Elliott Wave International
Several signs suggest economic contraction instead of expansion.
The first was recent front-page news: 8.1% August jobless rate. The number would have been higher, but it excludes people whogave up the job search.
The second is summed up by this Sept. 4 Bloomberg headline:
Nearly one in seven Americans use food stamps. Before the downturn it was one in 10.
You can find the third sign at the other end of the income scale.
The chart shows that after a multi-decade bull market that tracked the major stock indexes, lobster prices (per pound) peaked in 2005, one year ahead of the global downturn. The timing of the lobster price top is so close to the downturn in home prices that the Maine Department of Marine Resources noted, “Interestingly, a ‘lobster bubble’ coincided with the national ‘housing bubble’ in 2006. … The six-year divergence between per-pound prices and total pounds (shown by the trendlines on the chart) suggests that lobster mania will not be back for a long time. Luxury is a classic byproduct of a bubble.
The Elliott Wave Financial Forecast, August 2012
Speaking of the parallel trend of lobster and home prices, a Sept. 18 Wall Street Journal excerpt reveals the fourth sign of a deflationary trend:
A Sept. 19 Reuters article says the latest housing data is mixed:
Yet we’ve seen “hopeful signs” of a housing recovery before. The larger trend for real estate points in the opposite direction.
The fifth sign is summed up in this Sept. 18 CBS headline:
The article says:
The “Great Recession” never ended. A more accurate way of describing the state of the economy is the onset of “depression.”
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This article was syndicated by Elliott Wave International and was originally published under the headline Economic Gloom or Recovery? 5 Signs That One is Ahead. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.