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ECRI Plunges At 9.8% Rate, Double Dip Recession Virtually Assured

Tyler Durden's picture


The ECRI Leading Economic Index just dropped to a fresh reading of 120.6 (flat from a previously revised 121.5 as the Columbia profs scramble to create at least a neutral inflection point): this is now a -9.8 drop, and based on empirical evidence presented previously by David Rosenberg, and also confirming all the macro economic data seen in the past two months, virtually assures that the US economy is now fully in a double dip recession scenario."It is one thing to slip to or fractionally below the zero line, but a -3.5% reading has only sent off two head-fakes in the past, while accurately foreshadowing seven recessions — with a three month lag. Keep your eye on the -10 threshold, for at that level, the economy has gone into recession … only 100% of the time (42 years of data)." We are there.

Complete collapse in the long-term chart:





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Fri, 07/16/2010 - 10:50 | 473360 Arseclown
Arseclown's picture

Dear Congress/stimulus:  Thanks for nothing.

Fri, 07/16/2010 - 10:54 | 473378 TheGoodDoctor
TheGoodDoctor's picture

They can't hear you. They are working on QE2. /sarcasm off

Sat, 07/17/2010 - 01:51 | 475078 AR15AU
AR15AU's picture

Why would you need a sarcasm tag for that statement???  O_o

Fri, 07/16/2010 - 11:08 | 473426 Eternal Student
Eternal Student's picture

Hey, c'mon. You DID get something. You, me and everyone else. We're getting stuck with the bill.

Fri, 07/16/2010 - 11:42 | 473502 sbenard
sbenard's picture

You are sooo ungrateful (tongue-in-cheek). $2.5 trillion in debt is not NOTHING! Don't you feel rich? Pete Stark says that the deeper the debt, the richer we are!

Fri, 07/16/2010 - 11:50 | 473529 bonddude
bonddude's picture

Message to Congress and Prez.

I'm not into anal...


especially as a "bottom" !!

Fri, 07/16/2010 - 11:54 | 473533 Instant Karma
Instant Karma's picture

It's time to get serious about printing money.

1. For those of us few who pay taxes: slash them. Federal income taxes, followed by Social Security taxes, are by far and away my largest yearly expenses.

2. For most people who don't pay taxes: send 'em $1000 check.


Fri, 07/16/2010 - 12:07 | 473572 RobD
RobD's picture

Heh, a dem president and congress cut taxes? In your dreams. Has not happened since Kennedy. Jugears will never sign the bill so there would have to be an override and that is not happening until after November if then. Stick a fork in us we are done.

Fri, 07/16/2010 - 16:24 | 474369 RobD
RobD's picture

Umm, looking at the votes for that tax bill it looks like the house and the senate were in the hands of the repubs at the time and old slik did the right thing. Do you honistly think Nancy and Harry would pass any real tax cuts like those proposed above.

Fri, 07/16/2010 - 16:54 | 474442 tj3
tj3's picture

Ya, I'm so sorry. Whenever, I see the Obama manics I tend to focus on the hatred of the Presidency. You are absolutely right...the Republican Congress...and of course let us ignore all the Democrats that voted for the bill, because, you know, it's all about the Republicans. Democrats never, ever, ever cut taxes.


It's a shame you never paid a 75% tax rate you rich hoo hoo 35%...cry me a fuckin river.

Fri, 07/16/2010 - 17:55 | 474556 tj3
tj3's picture

Again and again I apologize to myself for being sucked down instead of up.


Look, all I'm sayin' is that politicians are either bought by the Corp/Bank/Media complex or their not. Most are, so this Repug/Dims thing (and tea party too for matter(eff the racists))is a false flag and I refuse to play.



Sat, 07/17/2010 - 01:55 | 475080 AR15AU
AR15AU's picture

Granted, most politicians are idiots.  But at least the (R) platform says that they are supposed to shrink government, not grow it.  Yeah, when the (R)s stray from their own platform, they are betraying their voters.  But the (D)s platform is all about growing government, so, they are just as bad as the spineless (R)s.  When (R)s stick to their platform like Peter Schiff or Ron Paul, they are damn good.  Just like when (D)s reject their platform, its a good sign.

Fri, 07/16/2010 - 10:51 | 473363 papaswamp
papaswamp's picture

Just an RCH above the magic ramp job for the ECRI?

Fri, 07/16/2010 - 11:00 | 473408 PlausibleDenial
PlausibleDenial's picture

RCH,  beautiful, I use that all the time, but have to have several explantions for those many that ask "Uh, what's that mean?"  Carry on papa...

Fri, 07/16/2010 - 10:51 | 473364 Tense INDIAN
Tense INDIAN's picture


Fri, 07/16/2010 - 13:06 | 473757 midtowng
midtowng's picture

WTF are they going to do? We've already shot our wad on fiscal stimulus. They can't go back to that well. That only leaves monetary stimulus...or severe deflation.

Fri, 07/16/2010 - 20:55 | 474747 StychoKiller
StychoKiller's picture

Yeah, and Obamatron "Promised" no more bank bailouts -- until there is.

Fri, 07/16/2010 - 10:52 | 473369 ZeroPower
ZeroPower's picture

There's a 3 month lag to the indicator.

Great, lets keep the SPX up in 1100 range till October and let the fun of Oct 2008 start all over again!

Fri, 07/16/2010 - 11:01 | 473411 Tense INDIAN
Tense INDIAN's picture

October???....what the Fuck ...u dissapoint me.....cant we have the fun right now...i mean the markets are falling ...and i got my sweet Shorts in Place...

Fri, 07/16/2010 - 11:16 | 473447 geminiRX
geminiRX's picture

Watch em do a ramp job this afternoon and the dow closes the day at +1 point in the green on no volume. This is predictable isn't it?

Fri, 07/16/2010 - 11:28 | 473471 Tense INDIAN
Tense INDIAN's picture

if that happens again today...that will really Piss me OFF......

Fri, 07/16/2010 - 11:39 | 473495 geminiRX
geminiRX's picture

From yesterday's Charles Nenner post:

"As to trading, he believes that as long as the S&P does not close below 1,085, the market will continue bouncing, and if 1,085 is taken out - it should be all over." 


If true, they won't let this happen...

Fri, 07/16/2010 - 11:53 | 473534 bonddude
bonddude's picture

Nenner is good.

Fri, 07/16/2010 - 11:48 | 473519 spekulatn
spekulatn's picture

Tense INDIAN becomes Pissed Off INDIAN.

I like it.

Fri, 07/16/2010 - 11:29 | 473473 Ms. Erable
Ms. Erable's picture

We need a new index, the RTI (Ramp Time Indicator), so we can bid the time the ramp-job starts each day. 3:30:04? 3:47:18? Bids may be placed from NYC, Jersey City, Vegas, Laughlin, and any Native American reservation casino.

Fri, 07/16/2010 - 12:07 | 473578 Chumly
Chumly's picture

You're on to something...this Ponzi Scheme could use another derivative to screw the retailers, you know, a binary hit or miss-type option; Email your idea to the PPT - they need a good scam to scalp another few billion out of willing suckers, considering they WILL be the market maker it will be a win-win for the casino.  They could use another few billion for their fractional reserve scam to ramp up another few hundred trillion in dervatives.

Fri, 07/16/2010 - 10:52 | 473370 King_of_simpletons
King_of_simpletons's picture

Wait till the taxes skyrocket in 2011. Must be fun fun fun.....

Fri, 07/16/2010 - 10:52 | 473371 Ragnarok
Ragnarok's picture

Send in the clowns....

Fri, 07/16/2010 - 11:03 | 473414 Village Idiot
Village Idiot's picture

"Send in the clowns"....

What channel are you on? That's the only show playing over here!

Fri, 07/16/2010 - 10:53 | 473372 virgilcaine
virgilcaine's picture

& Lachsmtan says...'hold on a minute, its only one measure'.  Appears he only likes it heading UP.  You created the monster must live with it..

Fri, 07/16/2010 - 10:53 | 473373 NOTW777
NOTW777's picture

recovery summer

Fri, 07/16/2010 - 10:54 | 473375 VK
VK's picture

They'll revise this down next week as well!

Fri, 07/16/2010 - 10:54 | 473376 slaiman7
slaiman7's picture

Any news about BDI today?

Fri, 07/16/2010 - 10:58 | 473394 4shzl
4shzl's picture

Up 20.  Booyah.

Fri, 07/16/2010 - 11:06 | 473420 papaswamp
papaswamp's picture



Fri, 07/16/2010 - 11:00 | 473405 Herne the Hunter
Herne the Hunter's picture

Apparently, +20 (~+1.1%) at 1720. Bulk, bitches!

Fri, 07/16/2010 - 10:54 | 473379 PicassoInActions
PicassoInActions's picture

CNBC headings

Fri, 07/16/2010 - 11:04 | 473416 King_of_simpletons
King_of_simpletons's picture

CNBC should stop cheerleading earnings season. It is a given that earnings suck but they all beat expectations/estimates because the market is in cruise control and the only entity driving it is the Fed in cahoots with the too big to fail banks.

Fri, 07/16/2010 - 11:15 | 473445 Spaceman Spiff
Spaceman Spiff's picture

"they all beat expectations/estimates because the market is in cruise control"

Well, that and these companies revise expectations down low enough to beat them.

Fri, 07/16/2010 - 11:38 | 473493 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

I am sure expectations were calculated with pixie dust, leprechauns and farting unicorns included as variables.

Fri, 07/16/2010 - 15:54 | 474312 tj3
tj3's picture

Unicorns farts are one of the most efficient sources of clean energy. The first political party to recognizes this will profit.

Fri, 07/16/2010 - 12:12 | 473594 currency confla...
currency conflagration's picture


" Funny, how were the expectations calculated. "


HFT computer systems running on Iphones of course!

Fri, 07/16/2010 - 10:55 | 473380 Muir
Muir's picture

As someone else said this morning: "Houston we have a problem."

Fri, 07/16/2010 - 11:00 | 473401 Caviar Emptor
Caviar Emptor's picture

My thoughts, exactly

Fri, 07/16/2010 - 10:55 | 473381 Tense INDIAN
Tense INDIAN's picture

i dont know about you but i have never seen this data being mentioned in bloomberg....

Fri, 07/16/2010 - 10:55 | 473382 Charley
Charley's picture

Now the fun begins...

Fri, 07/16/2010 - 10:56 | 473385 falcomadol
falcomadol's picture

Keep your job, and your personal earnings level, and this can improve your situation, as long as you don't own a house...


It's not much of a silver lining, and there are a lot of ifs there.

Fri, 07/16/2010 - 11:12 | 473436 Village Idiot
Village Idiot's picture

"Keep your job, and your personal earnings level"


I have mentioned something along these linesth before - the game for me at this point is to keep from getting kicked down a financial notch. So far so good.  Almost two years of playing "wack-a-mole." I hate this game.

Fri, 07/16/2010 - 11:26 | 473463 snowball777
snowball777's picture

Damn straight...houses for car prices, cars for moped prices, and more zombies than you can shake a stick at (no, really, keep shaking that stick).

Fri, 07/16/2010 - 11:52 | 473523 thesapein
thesapein's picture

Now is a good time for something a bit more proactive. Since we know ahead of time that debt is about to implode (in the form of a falling dollar), isn't it time to take on as much debt as you can muster, basically borrowing the dollar to trade into the other side, the explosion of precious metals? Borrow, default, and retire, that's what I say. That's Uncle Sam's plan, why not ours?

Fri, 07/16/2010 - 13:27 | 473816 ElvisDog
ElvisDog's picture

You really think TPTB will forgive all of your debt? Ask someone who took out $100K of student loans how that plan is going. The proper course of action is to do the opposite of what you suggest - have no debt whatsoever. Unplug yourself from the fiat currency/debt merry go round and watch the show.

Fri, 07/16/2010 - 15:54 | 474310 thesapein
thesapein's picture

We are not powerless viewers here to just watch the show. If enough people did what I have already done, this debt based currency would already be dead.

And, no, they haven't been very forgiving towards me, and maybe I'll fail in my plans. But, somehow, this lets me sleep well at night.

Great, now I look like some rebel jesus taking the moral high ground, totally set myself up.

Socrates was the real rebel thinker who died fighting with his mind against the democratic leaders of his time. Corrupting the youth, they said...


Fri, 07/16/2010 - 16:34 | 474384 ex VRWC
ex VRWC's picture

Quit falling into the 'terminology trap'. Its not a bad time to 'own' a house.  Its a bad time to be living in a house the bank owns that you are indebted for far beyond its value.  If you actually own the house, that can be a very valuable asset indeed, especially if it includes a farm, water, solar, etc!

Fri, 07/16/2010 - 10:57 | 473388 buzzsaw99
buzzsaw99's picture

Stimulate me bitchez!

Fri, 07/16/2010 - 10:57 | 473391 EscapeKey
EscapeKey's picture

I thought Gordon Brown saved the world? He certainly claimed credit for it.

Fri, 07/16/2010 - 10:58 | 473392 Cognitive Dissonance
Cognitive Dissonance's picture

After viewing those charts, it looks like the Viagra didn't last much beyond an afternoon quickie. I suspect the Fed will now turn to penis implants aka perpetual QE directly implanted into the economic circulatory system.

Watch out for collapsed veins, the bane of long term IV use.

Fri, 07/16/2010 - 11:03 | 473415 lizzy36
lizzy36's picture

Collapsed problem. 

Insert a central line :)

Fri, 07/16/2010 - 12:29 | 473583 Cognitive Dissonance
Cognitive Dissonance's picture

Sweet Lizzy, you can be my care giver any day. Ya just can't beat beauty and brains. :>)

Or at least as long as your supply of morphine holds out. A man's gotta set limits after all.

Fri, 07/16/2010 - 13:38 | 473855 MachoMan
MachoMan's picture

The failure of QE is the final recognition it is time to go the other way and deflate.  It was simply a test run for confirmation (and avenue for bolstering cash positions of the "winners").  The cash positions and massive bonuses paid to large corporations/individuals will be utilized to purchase assets on the cheap on the backside.  The legal consequences of doing so impose little fear given the future poses a reduction in the size of government and, likewise, regulators.  The time it would take to gather enough information, apprehend all involved, and ultimately convict them (presuming of course they are guilty of a crime) is longer than the time until collapse.  In other words, the free for all we're seeing is the free for all prior to the deflationary collapse.

The neo robber barons (albeit many from old money) will become our overt, express masters.  Eventually, we will get fed up and collectively bargain...  they will create entities to limit their liability and, thus, our ability to suck them dry individually.  We will suck the entities dry.  Collapse will occur.  And then we're right back at another version of the matrix.

Also, as an aside, if we were to ever implement a system where interest never compounded, then the disparity between rich and poor would have to be vastly closer.  In other words, game on.  

Fri, 07/16/2010 - 10:58 | 473395 perma bear
perma bear's picture

anything green makes me want to puke

Fri, 07/16/2010 - 10:58 | 473396 John McCloy
John McCloy's picture

  Since it is obvious banks are seeing less revenue I am also going to wager that it will be increidbly more difficult and risky for the ramp jobs on their part.

Fri, 07/16/2010 - 10:59 | 473397 kato
kato's picture

why can't we just take our recession like a man?

Fri, 07/16/2010 - 11:00 | 473402 Running on Empty
Running on Empty's picture

America in a nut shell,life imitating art.

" Boy if it's to hard to do it ain't worth doing."

Homer Simpson

No hard decisions are ever made.Gov elected representatives

are not there to serve but to get re-elected.

Fri, 07/16/2010 - 11:41 | 473498 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Same thing with Helicopter Ben. Why do you think QE 1.0 showed up? His Congressional appointment was due in Jan.

Fri, 07/16/2010 - 11:00 | 473404 trillion_dollar...
trillion_dollar_deficit's picture

Surely there must be an 8th or 9th derivative somewhere that looks positive.

Fri, 07/16/2010 - 11:04 | 473419 RRA_223
RRA_223's picture

innocent rounding error.


like always.

Fri, 07/16/2010 - 11:10 | 473430 Caviar Emptor
Caviar Emptor's picture

Overcapacity is everywhere. Even and especially in financial services: hence BAC and C. Even the man on the street can see it now: eerily quiet branches even in Manhattan, plunging mortgage and consumer credit biz, CRE dead in the water. And on Wall Street: minimal traditional IBank services (M&A, IPOs), retail brokerage services dead as broke Americans pull funds week after week, prime brokerage services curtailed, only wealth management holding up. Most banks are only alive but by the grace of the Gods of Mount Olympus: Ben, Tim, Barry. 

Fri, 07/16/2010 - 11:49 | 473522 BlackBelt
BlackBelt's picture

Banks are alive because of the manufactured steepness in the yield curve.  Bank's NIM went from the mid 2's to the 4's in about 9 months.  All at the expense of savers.  This can't last...

Fri, 07/16/2010 - 11:13 | 473439 stpioc
stpioc's picture

Hold your horses. But if you look before those 42 years of data it has been below -10 without ensuing recession, according to the ECRI guy being interviewed on Bloomberg yesterday..

Fri, 07/16/2010 - 11:15 | 473444 highonlife
highonlife's picture

I saw some charts somewhere which stated it a little differently. The ECRI hasnt predicted a recession ever. Whenever it plunged at a 10% rate, the economy had already entered a recession.

Fri, 07/16/2010 - 11:30 | 473477 HelluvaEngineer
HelluvaEngineer's picture

Please note: there will be no more recessions.  The new term is "Disimprovement", as in "Look honey, the Teleprompter says it's just a prolonged period of Disimprovement"

Fri, 07/16/2010 - 11:43 | 473505 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

The world of 1984's double speak is here! I think the unemployed will soon be recast as "involuntary vacationers".

Fri, 07/16/2010 - 12:05 | 473569 Amish Hacker
Amish Hacker's picture

Yes, as a result of the "jobless recovery." (Can I interest you in some "odorless cologne?") And don't think of it as being homeless, just think of it as going camping for the rest of your life.

Fri, 07/16/2010 - 11:29 | 473467 Bold Eagle
Bold Eagle's picture

What did they expect? Stimulating road paving and funding banks casino sprees cannot create long lasting positive momentum for the economy. And banks cannot count on market that goes up 60 days out of 62 anymore. Mutual fund Mondays, bitchez.

Fri, 07/16/2010 - 11:27 | 473469 mephisto
mephisto's picture

Hum. I guess this is what has the bond market spooked. Anyone remotely bullish should go read John Hussmann's last few weekly letters.


Fri, 07/16/2010 - 11:28 | 473470 loub215
loub215's picture

"May you live in interesting times" or "may you live THROUGH interesting times". time to take our medicine so our children won't have to...

Fri, 07/16/2010 - 11:29 | 473474 egdeh orez
egdeh orez's picture

I know this is getting old, but:

Did we ever leave the recession?

Fri, 07/16/2010 - 12:48 | 473701 Chumly
Chumly's picture

We are so short-sighted in our linear thinking.  No, we are in a depression and have been for a long time.  Future economic historians, because they will not be tainted by the foolish fallacious arguments of this age (short-sighted linear thinking), will look back at this current "time" and see it from a broader perspective, that there really wasn't any "recovery," because in all actuality we went further into debt against falling assets and foolishly called debt-induced economic activity "GDP." 

We have "recovered" as opposed to when - 2009?  The post-Modern definition of Economic Prosperity is a charade, relatively speaking.  The ingedients were baked into this pie a LONG time ago.  It's still the same pie and it's still baking. 


Fri, 07/16/2010 - 11:29 | 473476 eddybaby
eddybaby's picture

A sound data point.

Fri, 07/16/2010 - 11:34 | 473482 virgilcaine
virgilcaine's picture

leave recession.. ?  the Consumer was most confident 10 yrs ago. Ben going down since.  Bear mkts wear you down in TIME...

on this its a 'D'.

Fri, 07/16/2010 - 11:32 | 473484 chinaguy
chinaguy's picture
ECRI Plunges At 9.8% Rate, QE2 & new Stimilus Virtually Assured
Fri, 07/16/2010 - 11:47 | 473516 Tense INDIAN
Tense INDIAN's picture

i dnt think so...the present market is exactly mirroring what happened in the last deepression ...chartwise...from that point of view.....its all downhill from here

Fri, 07/16/2010 - 12:01 | 473558 qussl3
qussl3's picture

Agreed in the direction, but its more likely our markets mirror the Nikkei's path to oblivion.

Housing bubble, Credit bubble, mark to fantasy, more similarities barring possibly the demographics.

Fri, 07/16/2010 - 14:18 | 473995 ElvisDog
ElvisDog's picture

Man,the QE2 thread gets tiresome. After assuring us for the past 15 months that things are better-good-hunky dory, how can Obama and the Dems come out with a QE2 large enough to make any difference? Answer: they can't. If they tried, they would look like either (a) liars (b) idiots (c) both A & B.

Fri, 07/16/2010 - 11:36 | 473487 Critical Path
Critical Path's picture

So many data points screaming that another recession is all but guaranteed, and frankly why wouldn't it be.  The burden of proof no longer rests with those who think this is going to happen, but rather those who think it will not.


Looks like shit,

smells like shit,

tastes like shit,

must be shit

Fri, 07/16/2010 - 11:46 | 473513 geminiRX
geminiRX's picture

You must be in the medical field?

Fri, 07/16/2010 - 12:02 | 473562 qussl3
qussl3's picture

No shit, sherlock.

Fri, 07/16/2010 - 12:52 | 473715 IE
IE's picture

Be glad you didn't step in it.

Fri, 07/16/2010 - 11:58 | 473546 Damage Inc.
Damage Inc.'s picture

Please see "Discouraged Worker" (don't you dare call them unemployed)

Fri, 07/16/2010 - 21:29 | 474778 StychoKiller
StychoKiller's picture

Maybe "Decepticratally Challenged", or "Neo-Republicons!"

Fri, 07/16/2010 - 12:56 | 473725 moneyfornothing
moneyfornothing's picture

The only times this indicator has been lower are during 2008- 2009, 2001, 1980, 1974, 1973, 1970.  Geez, why do those dates look so familiar? 

The absolute readings in 2001, 1980, 1973 were only very slightly less at their worst point than where we are now....

Full speed ahead captain....I'll go and sort those deckchairs out!

Fri, 07/16/2010 - 13:54 | 473925 Grand Supercycle
Grand Supercycle's picture


The DOW/SP00 leg down has started.

Thu, 02/24/2011 - 01:51 | 991970 shawnlee
shawnlee's picture

What did they expect? Stimulating road paving and funding banks casino sprees cannot create long lasting positive momentum for the economy. And banks cannot count on market that goes up 60 days out of 62 anymore. Mutual fund Mondays, bitchez.

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