ECRI Highly Confident Recovery Will Start By Summer & Possibly Be Strong
In fact, several economists argue while looking at coincident indicators, if current trends persist, the NBER will conclude that the recession even ended last month.
I'll get to ECRI's accounting in a moment. ECRI has what is probably the most reliable method of forecasting turning points in the economy, bar none. When they talk, people should listen.
Headwinds or Balls and Chains?
Chrysler bankruptcy almost guarantees at least a temporary spike, and possibly a more prolonged resurgence, of initial jobless claims (A somewhat leading indicator) GM may go bankrupt within the next few months with similar, or worse, rubber-meets-road, real world impacts. Result of Bank "Stress Test" has been delayed. (This is not for the good news) A new wave of mortgage resets coming later this year through 2011 (Alt-As, etc.) Deflation continues to spread and deepen throughout the world. US Consumers are on a march to increase their savings rate in the face of seriously impaired credit worthiness and paper wealth. (This dampens spending) Banks are holding on to an extremely large "shadow inventory" of unsold homes, that at some point will either have to be put on market, or bulldozed. World trade continues to languish at levels last seen in the Great Depression. Swine Flu. (Experts seem concerned about it taking off late this year) I'm sure you can add some more items to this list. In fact, feel free to mention them in the comments section. I guess my sense is that while I do see a building cyclical upturn in the economy, I am not convinced of its durability in the face of so many challenges. What say you?
Here's Achuthan -
Lakshman Achuthan: The End Is Nigh
Airtime: Thurs. Apr. 30 2009 | 5:22 AM ET
The recession may not continue past this summer, says Lakshman Achuthan,
Economic Cycle Research Institute and Subodh Kumar, Subodh Kumar and Associates.
Professional Report Excerpt
End of Recession in Sight
(Full report received by Pro clients on 19-Mar-09)
The end of this recession - the most severe downturn since World War II - is finally in sight. This is the clear message from ECRI’s array of leading indexes of the U.S. economy...
The growth rate of the USLLI turned up in November 2008, and has now advanced for four straight months. The growth rate of the WLI turned up soon after that, in early December 2008, and, as of mid-April 2009, had been rising for more than four months...
over the last 75 years, growth rate cycle upturns during every recession were followed zero to four months later by the end of the recession itself. No exceptions.
Actually, there’s been only one solitary exception in the data we have examined, which go back well over a century. This was the growth rate cycle upturn of 1930-31, which gave way to a renewed downturn. But, when this growth rate cycle upturn was beginning at the end of 1930, USLLI growth was turning back down, warning that the firming in growth would soon be reversed, effectively opening the door to depression. That’s not the case today.
We know this because the USLLI data go back to 1919, covering not only the Great Depression but also the 1920-21 depression. Another ECRI leading index has a 105-year history, covering not only those depressions, but also the panic of 1907 and the associated 1907-08 depression. All of those leading indexes, which correctly anticipated recessions and recoveries over long periods of history, are now pointing the same way... The rest
I'll get to ECRI's accounting in a moment. ECRI has what is probably the most reliable method of forecasting turning points in the economy, bar none. When they talk, people should listen.
Headwinds or Balls and Chains?
Here's Achuthan -
Lakshman Achuthan: The End Is Nigh
Airtime: Thurs. Apr. 30 2009 | 5:22 AM ET
The recession may not continue past this summer, says Lakshman Achuthan,
Economic Cycle Research Institute and Subodh Kumar, Subodh Kumar and Associates.
Professional Report Excerpt
End of Recession in Sight
(Full report received by Pro clients on 19-Mar-09)
The end of this recession - the most severe downturn since World War II - is finally in sight. This is the clear message from ECRI’s array of leading indexes of the U.S. economy...
The growth rate of the USLLI turned up in November 2008, and has now advanced for four straight months. The growth rate of the WLI turned up soon after that, in early December 2008, and, as of mid-April 2009, had been rising for more than four months...
over the last 75 years, growth rate cycle upturns during every recession were followed zero to four months later by the end of the recession itself. No exceptions.
Actually, there’s been only one solitary exception in the data we have examined, which go back well over a century. This was the growth rate cycle upturn of 1930-31, which gave way to a renewed downturn. But, when this growth rate cycle upturn was beginning at the end of 1930, USLLI growth was turning back down, warning that the firming in growth would soon be reversed, effectively opening the door to depression. That’s not the case today.
We know this because the USLLI data go back to 1919, covering not only the Great Depression but also the 1920-21 depression. Another ECRI leading index has a 105-year history, covering not only those depressions, but also the panic of 1907 and the associated 1907-08 depression. All of those leading indexes, which correctly anticipated recessions and recoveries over long periods of history, are now pointing the same way... The rest