[Vanity]

Published March 15th, 2012, ECRI.

ECRI Recession call stands, re-affirmed.

Many have questioned why, in the face of improving economic data, ECRI has maintained its recession call. The straight answer is that the objective economic indicators we monitor, including those we make public, give us no other choice.

How about forward-looking indicators? We find that year-over-year growth in ECRI’s Weekly Leading Index (WLI) remains in a cyclical downturn (top line in chart) and, as of early March, is near its worst reading since July 2009.

As for the job's data coming out, which I pointed at increasing to 9% last month from suggesting Gallup polls, here's the ECRI's take on it:

Most data, both public and private, are seasonally adjusted. But the nature of the Great Recession seems to have had an unexpected impact on the statistical seasonal adjustment algorithms that are hard-wired to detect when the seasonal patterns evolve and change over the years. This is normally a good thing, but when the economy fell off a cliff in Q4/2008 and Q1/2009, it was partly interpreted by these procedures as a lasting change in seasonal patterns. So, according to these programs, data from Q4 and Q1 would be expected thereafter to be relatively weak, and therefore automatically adjusted upwards. Our due diligence on this subject indicates a widespread problem, resulting in many recent economic headlines being skewed to the upside.

And as for further QE's, whether domestic or global, here's their opinion as well:

It is notable that the WLI, which is sensitive to the prices of risk assets that have been supported by massive worldwide liquidity injections, has hardly been swayed from its recessionary trajectory. In spite of the efforts of monetary policy makers, actual U.S. economic growth has slowed, while WLI growth has barely budged from a two-and-a-half-year low.

The bigger question is, can unprecedented, concerted global monetary policy action repeal the business cycle? The objective coincident and leading indexes that we have always monitored are still telling us that it cannot.

Recession call maintained for US.

Add in Europe already being in Recession, and then now China:



These are just 1 month periods of home sales, Dec. 11, 2011 - January 12th, 2012.

Don't see the FED doing any QE this year, as Twist ends in June and they would need a crash to happen in order to justify more stimulus (as the country, to the majority of the public, does not feel like 2008/09). By then, any move would be too politically objective as it drives near the elections. Can you already hear the public uproar against Wall Street and then the FED as well if that happened?

This is going to be a big year. I can feel it


Update: More on that China slowdown coming into play very soon:

BHP Billiton warns of Chinese slowdown.

The world's biggest mining company, BHP Billiton, has sparked new fears about the economic outlook for China by warning the country's demand for iron ore is slowing.

I'll let you read the rest for yourselves. This should all come into play when Q1 earnings come in soon (by April 10th). Housing data coming out this week has been disappointing.