Wednesday, April 20, 2011

Blame the Koch?

New Deal Democrat has an extensive analysis of Oil Prices and the recovery. It's alarming, but as of yet no need to panic.

Teh Sauce:

So, am I calling for renewed recession? Not at this time. While I expect the Leading Economic Indicators report on Friday to be "soft," with the strong housing permits data on Tuesday it will certainly be positive. Typically recessions do not begin until at least 8 of the 10 LEI are negative compared with 6 months previous, or the LEI are down 3 months in a row. Also Real M1 is growing at about 10%, and there has never been a recession going all the way back to the Great Depression with Real M1 positive. Further, Prof. Hamilton's point that many consumers have already made the adjustment to $3.75 gas - via for example their small car purchases several years ago - has a lot of merit.

But if Oil prices remain elevated for several more months, the LEI turning negative becomes more of a possibility. At very least, the Oil shock of 2011 has almost certainly begun, and it is likely already causing a substantial slowdown.

Which brings me to a Beckian like theory, what if the Koch Brothers know their only way to unseat Obama is to tank the economy once again? Not too absurd of a thought...

Also too, caliphate!

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