Boom!

According to many politicians and economists, the "recovery" from one of the longest recessions in history is now underway. They cite low unemployment as evidence; no matter that in the US the figures ignore those not looking for work and the real rate of unemployment is over 20%. Low oil prices and inflation are now clung to as reasons why people will feel better off. That inflation has been understated for years and GDP growth flattered as a result doesn't seem to feature in many economic commentaries. But there are some worrying signs of impending collapse. This chart of the S&P500 US stockmarket index was posted on Twitter by Stacy Herbert yesterday.

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Daily Pickings has referred in the past to unprecedented income inequality which is now greater than immediately before the Wall Street Crash of 1929. The chart below is now three years old and the gap is even wider today.

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There will likely be a reversion to the mean or in simple terms, what goes up must come down.

Is the recovery real? Not if you look at an indication of real trade - the Baltic Dry index which is much less subject to manipulation. It follows shipping rates, ie. what people are prepared to pay to ship stuff around the world. The index is at an all-time low because there are too many ships and not enough buyers to justify transporting goods around the world.

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China's COSCO Dis-Assembles 8 Ships Amid Glut As Baltic Dry Hits Another Record Low by Tyler Durden (H/T)

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