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  • Another Recession Dead Ahead? 3 comments
    Oct 30, 2010 3:10 PM
    Except during a depression, GDP always makes a new peak before the next recession. The 91-day Consumer Metrics Institute Growth Index, has shown a marginal improvement from -6.13 to - 5.93, a 0.20 move to the upside. However, considering that the short term 91-day is 'noisy' (on account of the limited time frame) is subject to high volatility.

    To smooth out this volatility its necessary to look at the CMI 186-day and 365-day growth indexes.

    See chart;
    http://www.dshort.com/charts/Consumer-Metrics-Growth-Index.html?CMI-shift-series-04

    Note that during the most pronounced part of the last downturn, Q4 2008, the 365-day never went below -2%, while at present it sits at -2.88% and trending solidly down. This portends a much lower GDP number in Q4 2010 and lower still in Q1 2011. These trends in the CMI growth indices, add credence for the much dismissed double dip occuring during the first half of 2011.

    Disclosure: Long physical gold and silver.
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Comments (3)
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  • We just ended the most expensive (thus highest $$$$ spent) election cycle ever.

     

    And not ONE expert looking at GDP and figuring out that much (maybe all) of the "growth" in 3Q can be traced back to campaign spending flooding the countryside.

     

    Just like I still have not seen any reconciliation in the 1st and 2nd quarters due to the astronomical Census spending.

     

    Now what? Just what is going to jump in and keep our GDP "expanding?"

     

    Maybe we will get lucky and the lame duck Congress will take out their frustrations and pass Cap 'n Trade. An immediate bump in ALL prices is sure to keep GDP looking rosy.

     

    Even as millions more fall below poverty and into hunger. Good, good times.
    3 Nov 2010, 11:17 AM Reply Like
  • TE, have you any numbers on the amount spent on the elections?

     

    It is probably to early to tell but It must be astronomical. I would assume advertising revenue will plunge now along with printing, call centers and a host of other industries.

     

    The one bright side is that all that political hot air will no longer be adding to the global warming. LOL
    3 Nov 2010, 11:38 AM Reply Like
  • Author’s reply » Thank you for your comments. Its good to get some feed back. The most important part of my post is the link to the chart.
    I consider this chart the most 'telling' trend forecaster, of all the charts I have seen in the last year! I also consider GDP to be a poor indicator, because of its lag time and subsequent revisions.
    However, the ECRI spread over 361 days to remove the 'noise,' is in my opinion "the" indicator for the direction of the economy, for the immediate future- out to six months.
    Tough times coming.
    3 Nov 2010, 11:58 AM Reply Like
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