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those who speak of “green shoots”:
The Economic Tsunami Is Curling Over
Posted on May 12, 2009 by Paul Martin in Economics, Government Evil, Media Lies | 0 Comments
by Karl Denninger
I have only one question for those who speak of “green shoots”:
What are you smoking?
Let’s start with a really ugly report from The Nelson A. Rockefeller Institute of Government:
The trend in state and local tax collections has been clearly downward from 2005 growth that was unusually high, and 2006 growth rates that were more in line with historical averages. Figure 1 shows the four-quarter moving average of year-over-year growth in state tax collections and local tax collections, after adjusting for inflation. Year-over-year change in state taxes, adjusted for inflation, has averaged negative 1.1 percent over the last four quarters, down from the 1.4 percent average growth of a year ago and 3.4 percent of two years ago.
There are a number of graphs in that paper, one of which shows that right around January (the latest for which they have complete data) there is an uptick in Goods consumption. This is part of where the Kudlow “green shoot” brigade is getting their information from.
However, if you look at the graph, you will see that every year there is a similar tick upward in consumption, although the exact date of it does vary by a month or two.
Why?
It’s called Christmas!
State Sales Tax Revenues tell the story. California is absolutely cratering, for example:
Sales taxes were $452 million lower (-50.9%) than last April, and personal income taxes were down $5.7 billion (-43.6%).
Fifty percent?! FIFTY?
California is responsible for thirteen percent of the total US GDP and if it were an independent nation it would be the tenth largest economy in the world.
The idea that we can have some sort of economic recovery while the sales tax receipts - which are a direct measurement of consumer activity - are down by half is pure insanity. Where is the economic activity that is going to create this “recovery”?
And let me remind everyone - sales tax receipts are not a lagging indicator, they tell you what is going on right now.
Now let’s look at job losses in this recession compared to others. As written up in the NY Times:…
The Rest…MarketTicker.com
The Economic Tsunami Is Curling Over
Posted on May 12, 2009 by Paul Martin in Economics, Government Evil, Media Lies | 0 Comments
by Karl Denninger
I have only one question for those who speak of “green shoots”:
What are you smoking?
Let’s start with a really ugly report from The Nelson A. Rockefeller Institute of Government:
The trend in state and local tax collections has been clearly downward from 2005 growth that was unusually high, and 2006 growth rates that were more in line with historical averages. Figure 1 shows the four-quarter moving average of year-over-year growth in state tax collections and local tax collections, after adjusting for inflation. Year-over-year change in state taxes, adjusted for inflation, has averaged negative 1.1 percent over the last four quarters, down from the 1.4 percent average growth of a year ago and 3.4 percent of two years ago.
There are a number of graphs in that paper, one of which shows that right around January (the latest for which they have complete data) there is an uptick in Goods consumption. This is part of where the Kudlow “green shoot” brigade is getting their information from.
However, if you look at the graph, you will see that every year there is a similar tick upward in consumption, although the exact date of it does vary by a month or two.
Why?
It’s called Christmas!
State Sales Tax Revenues tell the story. California is absolutely cratering, for example:
Sales taxes were $452 million lower (-50.9%) than last April, and personal income taxes were down $5.7 billion (-43.6%).
Fifty percent?! FIFTY?
California is responsible for thirteen percent of the total US GDP and if it were an independent nation it would be the tenth largest economy in the world.
The idea that we can have some sort of economic recovery while the sales tax receipts - which are a direct measurement of consumer activity - are down by half is pure insanity. Where is the economic activity that is going to create this “recovery”?
And let me remind everyone - sales tax receipts are not a lagging indicator, they tell you what is going on right now.
Now let’s look at job losses in this recession compared to others. As written up in the NY Times:…
The Rest…MarketTicker.com
