ECRI: The Great Recession Is History
NEW YORK, Aug 21 (Reuters) - A gauge of future economic growth made steady gains in the latest week, sending its yearly growth rate to a fresh 26-year high and suggesting a strong recovery is already in motion, a research group said on Friday. The index's annualized growth rate ticked up to 17.5 percent after hitting a 26-year high of 14.3 percent last week, which was also revised higher from 13.4 percent. It was the highest yearly growth rate the index has seen since the week to July 29, 1983, when it was 17.8 percent.
"It is high time to break from the herd of pessimistic analysts, who will continue to bemoan economic weakness long after the Great Recession is history," said Lakshman Achuthan, Managing Director at ECRI.
Originally posted at Carpe Diem.
7 Comments:
Dr. Perry,
What do you think the revised GDP numbers for 2nd quarter will be?
You shouldn't forget that in June of 1930 Herbert Hoover also declared the end of the recession in USA. And many people believed him.
ECRI is comparing the present debt-crisis recession to recessions that had little to do with too much debt. And such a comparison is a false comparison that will likely mislead many people.
It's like comparing apples and oranges and drawing some kind of a conclusion from that.
The present debt crisis and US government response to it are most similar to what happened in USA in 1930s and in Japan in 1990s. And how good the ECRI index is at predicting the economy in those types of situations no one knows.
ECRI usually does excellent work
HOWEVER, they are cycle driven, meaning they look at the traditional business cycle factors like inventory build, manufacturing changes etc.
This has not been the typical post WW2 recession -- it was credit driven instead.
While it is certainly possible its end will be just like every other recession, there is also a very real possibility it will look and behave quite differently.
If the latter is the case, you can toss out the ECRI forecast . . .
From the Financial Times the great Roubini says: The risk of a double-dip recession is rising...
perma-bears and never held to the same level of accountability as perma-bulls. If you want to get a reputation as a prophet, it’s easy — just be very bearish and very vague
I use the ECRI for the macro trends.
Once established, I invest according to the ERI.
Never failed me yet.
The ECRI is easily backtested.
I highly recommend using the same tools as the professionals use.
Why would you not use every tool in your box?
Business Cycles have been around for 500 years and the characteristics are the same every time. You can find out how government policy should be formulated accordingly, and why it isn't, at www.scribd.com/doc/16864582/The-Great-Recession-Conspiracy and it is also a Kindle book.
Post a Comment
<< Home