I know that everyone is tired hearing the same gloomy predictions from every financial expert out there but, unfortunately, this flow of news is simply not going to get better any time soon. What surprises me though is the extent of the stock declines in response to some of these "old" negatives that one should have expected to be priced in a long time ago. Just look at the chart of most recent bear market declines from my my previous article- we are now past the decline from the 1980-82 recession, but the really negative economic news are only starting to come out...

I mean, let's get real here- who did not know we were in recession? Forget the media's "two quarters of negative GDP growth" definition- the "domestic" recession likely started almost a year ago and it is very likely that most of the other economies will follow the US down the negative GDP road. What's more, it is very likely that negative GDP trends will persist at least for 3-4 more quarters, which implies that job losses should be expected to at least match or even exceed the 1980-82 level, which in turn means many more months of 200K+ payroll declines.

Below are some graphs from the ClevelandFed that compare the YTD payroll picture to the past- the punch line is losses are likely to get much worse during the next few quarters as we are way early in the cycle.

Current losses are still minor compared to the 80s (this does article does not yet include October's numbers and revisions to September where losses have accelerated to 200k+ range)

Since January, the U.S. economy has shed 760,000 jobs. During the four previous official recessions net employment losses were higher: 837,000 in the 1980 recession; 2,172,000 in the 1981-1982 recession; 1,282,000 in 1990-1991; 1,629,000 in 2001. The magnitude of job losses depended on the duration of each recession. For example, the 1980 recession lasted just seven months, while the 1981-1982 recession lasted seventeen and the 1990-1991 and 2001 recessions were each nine months long.