Construction and employment in free fall, US consumer on the fritz, growth barely above 1 percent,… can you imagine that some still believe the US recession hasn’t started yet?

"When the wise man points to the moon, the fool sees the finger" (Lao Tse)

Naturally, for all those who keep on reading the same old financial media with the same old experts and decision-makers who, one year ago, claimed that there was no housing bubble (and then… faced to the evidence, that it would not burst), who forecast a EURUSD exchange rate at 1.10 for the beginning of 2007, who guaranteed that there was no better investment than betting on subprime loans and who based their beautiful argument on the fact that the US economy’s dynamism was structurally superior to every other economy in the world due in particular to the US consumer’s insatiability and unstoppable longing to spend...naturally, for all those people, there is no doubt: as always, everything is fine or will be fine tomorrow.

In fact, when they belong to the group of big financial operators who fuel these beliefs in order to withdraw their investments and US (or US-linked) equities as fast as they can, these people are quite right… since thus they are still in a position to find some naïve purchasers to believe them. For the latter, the harder they will fall.

For the others, those who follow the evolution of the real US economy (rather than what is said about it), they have already found many evidences that the recession has indeed started:

. a GDP growth rate beneath 1.3 percent in the first quarter; knowing that, beneath 2 percent, US growth is no longer sufficient to maintain employments or consumption.

. consumers who confirm their increasing insolvency, and who, despite their growing debt, have now considerably slowed down the pace of their spending.

. a housing sector still collapsing: with pending sales of US homes down to 4.9, this indicator of future housing trends records its worst score in four years.

. a subprime crisis still undermining US credit on the whole, expanding to other sectors and causing consumer credit crunch.

. auto sales in free fall (- 7,6% in April), including for Japanese car builders… but what is a US consumption deprived from autos and houses? Nothing much really!

But all this, which was anticipated in the GlobalEurope Anticipation Bulletin (GEAB, on subscription in the last months, must be nothing. Indeed a revival must be ahead soon since the Fed (who has tried to conceal problems as long as it could in the past 12 months) together with meanstream media claim that corporate investment is about to compensate household consumption.

May those who believed that the bottom of the housing crisis was reached each time these experts and decision-makers said it ever since Fall 2006, keep on believing in the US recovery by means of corporate investment.

As to all the others, together with LEAP/E2020, they are more interested by the real evolution of the US economy. And besides all the indicators listed above, they can observe for instance that US companies’ quarterly results fell from two- to one-digit figures for the first time in four years, and that sectors close to the consumer (automobile, domestic appliances,…) make the worst results.