Skip to comments.According To ECRI's Lakshman Achuthan, We Are 8 Months Into A Recession
Posted on 02/01/2013 6:30:31 PM PST by blam
According To ECRI's Lakshman Achuthan, We Are 8 Months Into A Recession
Doug Short, Advisor Perspectives
February 1, 2013, 6:33 PM
The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) slipped in the latest public data. It is now at 129.7 versus the previous week's upwardly revised 130.7 (previously 130.6). See the WLI chart in the Appendix below. However, the WLI annualized growth indicator (WLIg) rose, now at 8.3, up from last week's 7.2. WLIg has been in expansion territory since August 10th of last year, and it is at its highest level since May of 2010.
ECRI posts its proprietary indicators on one-week delayed basis to the general public, but ECRI's Lakshman Achuthan has switched focus to his company's version of the Big Four Economic Indicators I've been tracking for the past several months. See, for example, this November 29th Bloomberg video that ECRI continues to feature on their website. Achuthan pinpoints July as the business cycle peak, thus putting us in at the beginning of the eighth month of a recession.
Here is a chart that illustrates why ECRI's weekly indicators have little credibility -- The smoothed year-over-year percent change since 2000 of their proprietary weekly leading index. I've highlighted the 2011 date of ECRI's recession call and the July business cycle peak, which the company claims was the start of a recession.
First a flashback for those of us who have followed ECRI's media appearances: we know that the company adamantly denied that the sharp decline of their indicators in 2010 marked the beginning of a recession. But in 2011, when their proprietary indicators were at levels higher than 2010, they made their recession call with stunning confidence bordering on arrogance:
Early last week [September 21, 2011], ECRI notified clients that
(Excerpt) Read more at businessinsider.com ...
They forgot to put the 5 in front of the 8.
We never got out of the recession.
According to upchuck, who bases his prognostications on the price of gasoline and prices at Wal*Mart, the nobama recession has never ended.
The rise above the line in the chart from late 2009 to mid 2010 was merely a blip. An outlier as the global warming lovers call it.
8,500,000 Americans Left Labor Force In Obama’s First Term...
POOF: Another 170,000 disappeared in January...
Retail Workweek Hits 3-Year Low...
Massive revisions to earlier numbers...
Gas prices to top $4 again...
Someone has been slacking and has not informed President Big Ears of this fact ... oh, never mind, Big Ears caused it.
But the DOW hit 14,000 today. Everything I see / read tells me to stay out (got out just after election), yet I am leaving money on the table it seems. I thought we were in a sell off when it started climbing back then, but I can’t see that lasting for this long.
It is a gamble. Keeping your $$$ in play may have netted you $1, $10, $100 grand, depending on what kind of $$$ you are talking about. But we always have to remember, gubmint or your broker isn't ever going to send you a warning notice 3 days before it comes crashing down. I also moved the last portion out soon after the election, have I left some $$$ on the table? Sure. It just isn't worth the risk at this point in time, JMO. YMMV