Green Shoots vs. Eye of The Hurricane

Right about now, denizens of the United States are faced with a choice very much like the choice Neo faced when Morpheus presented him with taking either the red pill or the blue pill. We can accept the false but comforting narrative embodied in the line "the economy is sprouting green shoots", or we can look more closely at the official data and wonder if perhaps the last few months, and perhaps one or two more, are merely a respite of sorts, and that we are actually in the eye of a hurricane. I choose the latter, not because I may have some penchant for bad news, or for any other perverse reasons, but because as near as this non-economist can tell, the evidence is simply not there to support the "green shoots narrative." In fact, the green shoots line seems to have only slightly more plausibility than the single bullet theory.

The best one can say about the cooked data coming from the BLS is that there appears to be a de-acceleration in the rate of economic contraction that began a bit less than two years ago. A bit of ebbing, a very modest bit, in the rate of unemployment, for example, does not equate with the beginning of a recovery in the economy. But, but what of the behavior of the stock market some might ask? The stock market is the arena for the stupidest money in the realm of finance, and right now the share market's rise can be attributed to the need to believe that everything is okay, that every contraction is followed by a robust recovery that makes the previous decline seem tame by comparison, that the PTB simply will not allow the unthinkable, which is a that a long term/ irreversible deterioration takes hold.

Unfortunately, that is exactly what we are in the midst of. A long term structural decline that the authorities aided and abetted and are now compounding with their profligate schemes that are, because they attempt to defy implacable mathematical realities, doomed to failure.