ECRI: Economy Remains at Cycle Low

According to the U.S. Weekly Leading Index (US WLI) released on 12/12/08 published by Economic Cycle Research Institute (ECRI), the economy remains at the low point in the cycle. Lakshman Achuthan of ECRI states:

With the WLI falling back to its cycle low after a one-week uptick, a business cycle recovery is still nowhere in sight.

The US WLI has a slight lead over business cycles.

As a leading indicator, the WLI is demonstrating that economic conditions in the future are going to be worse than they are today.

Lakshman Achuthan appeared with Peter Schiff earlier this week on CNN to discuss this current recession. Lakshman Achuthan said there is a lot of economic pain coming, and all this debt being piled on is only mitigating this recession - and may inhibit the future recovery.

Disclosure: no positions

Comments

[John Lounsbury:]

I agree with the author's comments and conclusions quoted from others. It seems to me that all the "stimulus" will do no more than spread a lower level of pain over a longer time. Allowing collapse would bring much more intense pain, but it would be over sooner.

It might be said "you pay now or you pay later". We have been socially conditioned to buy on credit and that is what we are doing with the business cycle. The downside of course is the total cost is increased by the interest.

2008 Dec 14 08:57 AM

[Fred Voetsch:]

Good article and good data.

There is no doubt that the economy and the stock market will continue to fall for some ttime to come and the fact that we are bailing out the losers at the expense of the winners can't be good for our future...the tax man cometh and he cometh for you and I and anyone else who has done things right and still has some money left.

Now go to my website and buy some stock photography so I can afford to pay my taxes. :-)

--Fred Voetsch

2008 Dec 14 02:00 PM

[happysoul77777:]

The Lehman bankruptcy caused an implosion of global credit. The data make sense. But the data may be a few weeks late, as bank loans have exploded in recent weeks.

2008 Dec 14 02:52 PM