ECRI: Signs of Economic Improvement 10 comments
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According to the U.S. Weekly Leading Index (US WLI) released on 03April2009 published by Economic Cycle Research Institute (ECRI), the signs of economic improvement are visible. Lakshman Achuthan of ECRI states:
With WLI growth rising to a 23-week high, an upturn in the U.S. growth rate cycle is now in clear sight.
The US WLI has a slight lead over business cycles.
As a leading indicator, the WLI is forecasting economic conditions approximately six months in the future. There is an indication of future improvement in economic activity.
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Not a revision, but rather an omission; I recall hearing a fair bit of to-do about a slight up-tick in consumer spending recently. It wasn't much...a fraction of a percent?....but MUCH more welcome than another month of decline. What I did NOT hear mentioned, was what, if any, effect rising gasoline prices might have had on that number.
I guess that you must work for ECRI, to be posting their subscription information On SA . Maybe prudent marketing on their part? I hope. I Found this on their site as well: "Personal Use Only
The ECRI Services are made available for your personal, non-commercial use only. Redistribution of the ECRI Services is not permitted. You may not use the ECRI Services to sell a product or service, or to increase traffic to your Web site for commercial reasons, such as advertising sales. You may not take content from ECRI’s website and reformat and display them, or mirror the ECRI home page or results pages on your Web site. If you want to make commercial use of the ECRI Services, you must enter into an agreement with ECRI to do so in advance. Please contact us for more information."
Is it correct to say that the increase in the index from -23% to -22% means that the index is forecasting a very slight decrease in the rate at which GDP is declining? It is certainly not forecasting an increase in GDP. It is not even forecasting a material decrease in the rate of decline.
i too am concerned about the economy. and i personally believe the stock market is way too ahead of itself this time - the future earnings will not support the current prices. the market did not fall low enough. we will have a slow and labored period after the economy bottoms within the next six months.
according to Lakshman Achuthan, in november long term indicators bottomed, weekly indicators bottomed in december, and in march stocks bottomed. this 1-2-3 punch has reoccurred recession after recession since 1920.
www.cnbc.com/id/158402... (via @addthis)
Lakshman goes on to say in this interview that when comparing recessions, the recovery growth trends are becoming weaker and weaker while the cycle itself is becoming bigger with recessions becoming more and more frequent.
Lakshman comments about this interview were "The risk in stock market over next couple of quarters is lower than most think. At least that's what I was trying to say in the context of the interview."
Now you ask me if i am investing my money right now - hell no. I am not convinced the government and the Fed will have large and unintended consequences for what they are doing.
steven hansen
"Is it correct to say that the increase in the index from -23% to -22% means that the index is forecasting a very slight decrease in the rate at which GDP is declining? It is certainly not forecasting an increase in GDP. It is not even forecasting a material decrease in the rate of decline."
the purpose of this index is to predict business cycle turning points. At this point ECRI is saying the bottom of the cycle is within the next six months.
do not get me started on GDP as a measure of economic activity. for those who believe GDP rising means good times are ahead will have a rude awaking. GDP simply was not going to keep falling forever. what it measures in the economy is not all inclusive.
we are in a new normal. what will happen next not be a recovery to what was. it will be something different. the amount of unemployed will definitely effect recovery, and the debt will eventually blow the wheels off of the bus.
steven hansen
Pilgrim
On Apr 05 07:38 PM the hand wrote:
> unfortunately, i am not making the big bucks working for ECRI, and
> am not affiliated with ECRI in any way except an admirer of their
> track record. they has specifically given permission to me to publish
> of some of their work for the readers of Seeking Alpha.
>
> i too am concerned about the economy. and i personally believe the
> stock market is way too ahead of itself this time - the future earnings
> will not support the current prices. the market did not fall low
> enough. we will have a slow and labored period after the economy
> bottoms within the next six months.
>
> according to Lakshman Achuthan, in november long term indicators
> bottomed, weekly indicators bottomed in december, and in march stocks
> bottomed. this 1-2-3 punch has reoccurred recession after recession
> since 1920.
> www.cnbc.com/id/158402...;play=1 (via
> @addthis)
>
> Lakshman goes on to say in this interview that when comparing recessions,
> the recovery growth trends are becoming weaker and weaker while the
> cycle itself is becoming bigger with recessions becoming more and
> more frequent.
>
> Lakshman comments about this interview were "The risk in stock market
> over next couple of quarters is lower than most think. At least that's
> what I was trying to say in the context of the interview."
>
> Now you ask me if i am investing my money right now - hell no. I
> am not convinced the government and the Fed will have large and unintended
> consequences for what they are doing.
>
> steven hansen
>
www.businesscycle.com/...
You'll be less impressed without their tweaking. Take a look at the data around 1974-75 and you'll see what I mean about tweaking!!!
Graph of US WLI Growth: link
Graph of US WLI Level: link
Growth:
cid-ceb9e64b40fc5af0.s...
Level:
cid-ceb9e64b40fc5af0.s...
On Apr 05 07:38 PM Steven Hansen wrote:
> unfortunately, i am not making the big bucks working for ECRI, and
> am not affiliated with ECRI in any way except an admirer of their
> track record. they has specifically given permission to me to publish
> of some of their work for the readers of Seeking Alpha.
>
> i too am concerned about the economy. and i personally believe the
> stock market is way too ahead of itself this time - the future earnings
> will not support the current prices. the market did not fall low
> enough. we will have a slow and labored period after the economy
> bottoms within the next six months.
>
> according to Lakshman Achuthan, in november long term indicators
> bottomed, weekly indicators bottomed in december, and in march stocks
> bottomed. this 1-2-3 punch has reoccurred recession after recession
> since 1920.
> www.cnbc.com/id/158402...;play=1 (via
> @addthis)
>
> Lakshman goes on to say in this interview that when comparing recessions,
> the recovery growth trends are becoming weaker and weaker while the
> cycle itself is becoming bigger with recessions becoming more and
> more frequent.
>
> Lakshman comments about this interview were "The risk in stock market
> over next couple of quarters is lower than most think. At least that's
> what I was trying to say in the context of the interview."
>
> Now you ask me if i am investing my money right now - hell no. I
> am not convinced the government and the Fed will have large and unintended
> consequences for what they are doing.
>
> steven hansen
>