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  • Achuthan Adamant On Recession Call [View article]
    Good interview on Bloomberg with Achuthan as well. Tom Keene makes the CNBC crew look like muppets.

    http://bit.ly/tlZcpn
    Dec 10 08:49 AM | Likes Like |Link to Comment
  • Achuthan Adamant On Recession Call [View article]
    Charlie why don't you bother to check the track record on the conference board? Its not that impressive. The ECRI WLI is a composite of leading indicators, yes ECRI doesn't use it to forecast recessions as happened last summer when it went strongly negative as the ECRI's long leading indicators had already started to turn up, but it is a good leading indicator nonetheless.

    If you want to know what is inside ECRI's black box just buy Lakshan Achuthan's book, then you might get a clue.

    It's not my job to waste time educating you on what a leading, coincident or lagging indicator is. Try figuring that out for yourself,
    Nov 16 05:28 PM | Likes Like |Link to Comment
  • Achuthan Adamant On Recession Call [View article]
    Charlie,

    Hussman doesn't put undue weight on monetary indicators as Kasriel or the conference board does, he does not require a flat yield curve as you have mistated (a common occurrence in your writing), his method requires a 'flattening' of the yield curve that means it can be moderately upward sloping, to be more precise a 10 year treasury not more than 2.5% above 3 month Treasuries.

    I'm sure QE and operation twist certainly have distorted yields and so that has to be taken into account. It means I cannot be 100% certain a recession is on the cards, I don't have complete faith in Hussman or anyone else's model, but when Hussman and ECRI, the two best economic forecasters I know of are in agreement I have to take it seriously.

    You keep asking for a variety of indicators, you don't get much more variety than ECRI's WLI. If you don't know what constitutes a leading, coincident or lagging indicator, you need to do some homework.

    Recessions come and go, people lose jobs, businesses go under hoping it doesn't happen is not an objective position nor is it a viable investment strategy.
    Nov 16 08:13 AM | Likes Like |Link to Comment
  • Achuthan Adamant On Recession Call [View article]
    Charlie,

    To equate Hussman's recession indicator with the ones that you have cited is disingenuous at best. Hussman includes monetary indicators yes, but he doesn't require an inverted yield curve just a flattening as opposed to an outright inversion under Kasriel's model, which is impossible given the monetary distrotions courtesy of the Fed.

    If your sad emotional need to 'hope' for no recession helps you sleep better at night then so be it, but don't then pretend to be objective.
    Nov 16 02:11 AM | Likes Like |Link to Comment
  • Achuthan Adamant On Recession Call [View article]
    Dear oh dear, the Kasriel indicator has no validity in a deflationary environment, how do expect to get an inverted yield curve with the Fed suppressing rates at zero? It's not going to happen just at the Kasriel indicator didn't work in such an environment before WW2. The track record of the conference board's LEI are not impressive probably because they put so much weight on monetary factors again which have been massively distorted.

    I'm aware of these indicators and I'm happy to change my mind if the evidence warrants it, its just not warranted at this time. If we do not get confirmation of the signal from leading indicators in the coincident indicators in the months to come, then I'll have to change tack, no use being wedded to a position.

    Recessions come and go, we'll get through it and be better off in the long run, my investment stance is not dependent on recession happening, it's just what an objective look at the evidence suggests.
    Nov 10 05:57 PM | 1 Like Like |Link to Comment
  • Achuthan Adamant On Recession Call [View article]
    On the contrary Charlie I look at a wide variety of data, I just don't see any that contradict the high probability of oncoming recession, whihc I don't put at 100% since nothing is certain in economics but it is still very high based on historical precedents and empirically validated models with excellent track records.

    I've offered up a couple of models, I note you have offered nothing, can you name a model with a proven track record of predicting recessions the contradicts Hussman and ECRI? I'd be happy if you could, I like to challenge my views, it's called being objective.

    If you want to be an emotional cripple and inject your insecurities into interpreting my statements, be my guest, just remember it's not very helpful for investing purposes.
    Nov 10 10:55 AM | Likes Like |Link to Comment
  • Achuthan Adamant On Recession Call [View article]
    Al, I don't know why Seeking Alpha insist on publishing articles that have clips but don't publish the clip. You'll have to ask them but you can find the clip on my site.
    Nov 9 05:28 PM | Likes Like |Link to Comment
  • Achuthan Adamant On Recession Call [View article]
    No Charlie I am not cherry picking, if you bother to take a look at John Hussman's Recession Warning Composite, you'll see that it in incorporates a wide variety of indicators. Why Hussman and ECRI? Simply because they both have excellent track records unlike most economists.

    Your biggest problem is that you can't be objective, your letting your emotions get in the way. As I said before I am not hoping for recession, I am agnostic on the matter, however preparing yourself for that outcome when the data suggests the possibility is very high is only prudent.
    Nov 9 05:27 PM | Likes Like |Link to Comment
  • Achuthan Adamant On Recession Call [View article]
    Charlie,

    I'm not hoping for a recession, hope has nothing to do with it, I am expecting a recession based on a variety of market and economic indicators. For example John Hussmans Recession Composite, which has only ever been observed immediately prior to or during recessions (as it is now). That is not an opinion, just a fact of the data. The ECRI is also good confirmation, they have an excellent track record of anticipating turning points in the economic cycle. That's good enough for me to be defensive in this market.
    Nov 9 09:24 AM | Likes Like |Link to Comment
  • Are You Watching European Credit? [View article]
    Seth,

    That 6% is an Italian 2 year bond. BY the way it closed at 6.38% on Tuesday whilst the 10 yr closed at 6.77%
    Nov 8 05:43 PM | 1 Like Like |Link to Comment
  • Unemployment Claims Still Show No Evidence Of Double Dip [View article]
    Currently initial claims at are at levels normally associated with recessions in prior cycles, your own chart at the beginning of the post quite clearly shows it.

    Furthermore citing one economic indicator as evidence of no recession is the hallmark of poor analysis. Recessions are not signaled by one or even a few indicators, recessions signals are best seen as a "syndrome" of market and economic conditions that give a specific signature only seen during or immediately prior to recessions. Such a signature currently exists (see John Hussman) and was confirmed by ECRI.

    Of course this time could be different but to say that there is no evidence of the economy being in or on the cusp of recession shows a stunning level of ignorance of the historical record.
    Oct 13 08:49 PM | 1 Like Like |Link to Comment
  • What Do Non-Farm Payrolls Tell Us About Recession? [View article]
    I think you could be right but this current rally may have steam left in it yet. But ultimately we are going lower IMO
    Oct 12 03:13 AM | Likes Like |Link to Comment
  • Whether The S&P 500 Can Make It 6 Consecutive Monthly Declines In A Row [View article]
    Oh I see what you mean, I thought you were referring to the scope for monetary policy, it's a good point, there aren't many good alternatives out there in a zero bound world.
    Oct 4 12:41 AM | Likes Like |Link to Comment
  • Whether The S&P 500 Can Make It 6 Consecutive Monthly Declines In A Row [View article]
    I agree we'll get some relief rallies dd but I don't think interest rates will have much to do with it since they are essentially at zero already.
    Oct 3 11:45 PM | Likes Like |Link to Comment
  • Whether The S&P 500 Can Make It 6 Consecutive Monthly Declines In A Row [View article]
    Ominous start to October, but surely we must get a decent oversold rally somewhere along the line Dave to produce a positive month before the end of the year?
    Oct 3 06:34 PM | Likes Like |Link to Comment
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