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ECRI Weekly Leading Indicator Ever Closer To The -10% Threshold, Drops To -7.7; Leads To Another Leg Lower In Stocks
We are just 2.3 points away from that critical -10 threshold on the ECRI WLI which at least historically, has guaranteed a recession. Just the freefall itself is vertigo inducing, and the number's release at 10:30 Eastern is what pushed the market even further lower as bullish indicator after indicator collapse.
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So, what time of day do you think the PPT will start the melt up?
I'm with CD on this one. Around noon, everybody will be leaving for the weekend, leaving nobody at the table except the dealer. House wins.
BTW, great avatar. That belly button could substitute for the BP oil leak.
Thanks Mitchman. It's hard to tell, but it's Bawney Fwanks head pasted on there. You can decide for yourself why you're looking up at him from that angle. No good choices there I'm afraid.
LMAO!
HA! I love it!
All of America is looking from that angle while that clown is still in office.
Seems to me that the best plan for the Obamanator is to let it go to 950 or so, a 'natural correction' level, then try to build through the rest of the summer until the elections get close and hope they can squeeze out remaining majorities in the House and Senate. Also, the FED wants people to need it and let it have more power. If they wait until a bit lower to say they are going to restart MBS buying or something of that nature, Uncle Benny can be seen to ride to the rescue. I think they want to bring the EZ down so we can be seen to look good in comparison. IF they wanted to save it early, they could have stepped in near 1040 the 'magic' number per every talking head on the tube and had the quant boxes working with them. Now I think it will be much harder to turn things.
QE 2.0 any day now... leading to a disaster in credit markets as even more capital flows into FED sponsored bubble... leading to the collapse of EU within 6 months... leading to U.S. bubble burst... leading to the soup lines.
good times
We already have soup lines. 40m on food stamps.
Modern day "soup lines" via food stamps, welfare, UE bene's...all out of sight so everything looks "normal".
So if you say we are in a depression, folks say: I don't see any soup lines! All's well.
I think you're right, hambone. Almost 25% increase yoy. Wonder what it'll look like this year...
http://www.mcclatchydc.com/2010/01/08/81982/study-more-families-using-fo...
I don't think we will see QE 2.0 until after the midterm elections... and it's not primarily because of political issues.
Given what we know on the Fed's lack of hedging activity on Maiden Lane I (thanks Tyler), I'm betting Treasury yields go abysmally low. In that environment, Timmy Geithner will be issuing new Treasury paper like a brillo-headed madman. You might as well scare the masses into pleading for QE rather than force the issue, anyway.
If you were Uncle Ben, why wouldn't you not stand from afar and let Europe collapse on it own, rather than try to induce collapse and risk your own reserve currency status?
And by the election everyone will be pissed off about everything and vote all the bums out. If they start QE2 soon and have another sugar-high orgy of a rally into the election, maybe the pols can buy enough votes to get re-elected. Could go either way.
Given past few elections results from the primaries (with the wind of reflation behind their slimy little backs), I think the politicos coming up for re-election already know their chances are slim.
A near term QE super high orgy would be a relatively high-cost, low-return affair, given that incumbents are likely to be voted out of office, anyway. It appears to be a whole lot easier for a lobbyist to buy a politician's vote, than for any one politician to buy the electorate.
That doesn't mean that QE won't be used before the elections-- it just won't be for solely political reasons. QE is certainly possible if the domestic economy is on the verge of collapse, and the Treasury completes its rolls and new issuance. Right now, the Fed is projecting lower interest rates for a reason... and it's a good reason.
Oh. You're right. Those politicos will probably just give up now. They won't even try to buy votes. And since this country focuses so intently on our long term problems, no one would even think of attempting QE2 for short term results.
Good. I'm glad you see it my way. :)
Obama already in campaign mode.
Having trouble getting the majority of the population to vote for you? Failed policies on healthcare and the economy? Drag out ye olde immigration promises to rally the 'newly arrived' to your side. Expect this to get ramped up in coming weeks/months.
http://www.reuters.com/article/idUSN0116542720100701
+100
I'm not a financial wizard, so there is a lot in terms of gov't and fed operations that I don't know about/understand. However, in the same way that the stimulus resulted in a much lower boost in GDP than it has in the past (believe some folks calculated that the results were actually negative in the "real" economy), I think that the next iteration of QE, particularly if massive in scale (think AEP's $5 trillion number), will sow the seeds of its own failure.
I think that interest rates would spike as the bond crowd view it as continued fiscal recklessness and digging the hole deeper instead of trying to fill it in. They might decide to wait for a better risk to reward ratio.
Whereas QE liquidity and attendant hopes for growth helped fuel the bear market rally off the March 09 lows, rapidly rising interest rates would go a long ways to sinking any nascent liquidity driven equity rally off the back of QE 2. Nevermind what much higher rates would do the "real" economy, and interest rate costs for state/muni bonds and federal gov't, compounded by fairly short maturities. I could be way off the mark, but if the Fed tries a large QE 2, don't think it is going to rhyme at all with QE 1, and will likely backfire.
Drops any faster I will need a barf bag.
Oops, there goes another rubber tree plant.
http://www.youtube.com/watch?v=jcNyxxZvf8I
But, the Teleprompter said things were getting better.
*confused*
Obama and Bernanke 'agreed' that the economy is improving.
Obama: Look Berny the world is flat, agree ?
Berny: Yes teleprompter, I agree
Obama: So we are in agreement.
They speak in code, and only to each other. It is getting "better"; their plan is "working".
The plan was to loot the middle class. It has worked for decades and is now in full swing. People have their blinders on still thanks to the World Cup and 'Mercan Idull.
This is also why the talking heads on Bilderberg (Tucker) are missing points. First peak oil is real and the <sarcasm on> all holy <off> oilgarchs do not control production like a group of magicians (that is what the doelarr is for, to control oil prices). But to digress their plan is working, and so Barry acts as a mouthpiece to tell the world.
"Our plan is working."
"Our economy...."
"Our New World Order...."
Etc.....
The Globalists' Agenda - New World Order Quotes from Politicians (1950 - 2009):http://www.youtube.com/watch?v=Ptcp07v_w-w
The Globalists' Agenda - New World Order Quotes from Politicians Part 2:http://www.youtube.com/watch?v=Q8uzxEHFDkw&feature=related
The Globalists' Agenda - New World Order Quotes from Politicians Part 3:http://www.youtube.com/watch?v=ksy2yrUNd9Q&feature=related
Guess we need some more bullish indicators.
Did you mean bullshit indicators?
well if this plus the fact that we have now have the death cross is not enough to drive a steak through the heart of this pig market I do not know what is
If the market does go up I would say that is UNDENIABLE EVIDENCE OF MARKET MANIPULATION. Surely something could then be done about it?
Like what? If Johnny American Idol is apathetically happy about having money stolen from him to make his 401K look better, what the Hell are we going to do about it?
P.S. I agree with you BTW
Why so glum? It declined 1.0 last week, and only .8 this week. The second derivative is everything, right?
Prosperity is just around the corner -- woohoo.
So that is the delta (change) the teleprompter speaks of?
That's "change" I can believe in. LOL.
Dup.
Just noticed what a classic parabolic collapse that graph is
I think because of the last major collapse and subsequent dramatic (stimulus-induced) gains, the weekly ECRI may have a whole lot of noise behind it these past 2 years.
It's little wonder that the ECRI people are translating this as "slowdown" as opposed to a "double-dip". It doesn't mean we won't eventually get the latter, but I don't know if crossing Rosenberg's -10.0 rubicon is the Magic 8-Ball number, either. ECRI's longer leading index isn't quite as ominous.
This continual decline is troubling. I love this indicator, but fear the consequences of what it is suggesting.
Thank you to ZH and all others for keeping this data on our regularly Friday diet of data consumption.
wow this has done something
dow zero here we come
Tyler have you got Dow zero hats ready?
We need the Leslie Nielsen spinting away from the scene pic again.
These guys said this a while back. "“The 13-week annualized rate of the WLI is now at -23.46%, something that usually only happens in, or prior to, recessions. This is very ominous economic momentum. I haven’t seen anyone look at it this way, I suppose because the ECRI publishes their own smoothed growth rate.”
http://pragcap.com/the-13-week-ecri-wli-says-recession-is-on-the-horizon...
The ass of the titanic now sliding in.
We could look for a brief death rally into August, as all the traders go to the Hamptons and volume can get gamed easily by the PPT and the MOMOs. But this Fall could be seriously terrible unless QEII comes in at some massive scale and destroys the dollar
why are you worried economessed?
look if the marjet goes down and deflation wins this is the best outcome
if BEN wins its the worst outcome IE HYPERINFLATION
what would you rather have ?
cheap assets with your savings in tact or a currency worth less than bog roll?
thats the choice that we have
1930's style depression or Zimbabwe
In general, I'm worried that the whole of the US is entirely unprepared for re-scaling itself to a new paradigm. Democracies don't handle austerity well at all. And we lack the level of leadership/stewardship necessary to go through the giant reset without people - kids - etc. being hurt, or at least experiencing a much lower quality of life.
I'm prepared. What I fear are the desperate acts of people who aren't prepared.
+ 5.56
Raise you to +7.62
See your 7.62 and raise you 50 BMG. (Not that I actually have one, but it is planted firmly on the top of the drool/wish list)
I'm sort of naked shorting the armory????
True dat, bro --> "What I fear are the desperate acts of people who aren't prepared."
When bank robberies rise to an every day occurence, say hello to John Dillinger once more!
Weathermen had economist's listed as a career so that they would look better when thtey missed the weather forecast.
This is a victory for bulls
-Bob Pisani
Looks like everyone including HAL decided perhaps an early lunch and just not bother to come back today. That is what I'm going to do...1pm date with beer, plate of non-gulf crabcakes and a hot redhead (she is not russian that I know of).
Wonder what the weekend will hold?
I decided on 10:00 A.M. vodka tonic. Expect my posts to become more incoherent than usual, earlier than usual.
gins alright too...
I love the redheads.
The ultimate form of capitalism is salvery where the shareholders owns its labor. When salvery was ended, child labor took its place. When child labor ended in the US, it moved to China. Low level Govt union lush salaries/benefits reflect the US economy of the 90's and early 2000 and can't be changed. Real Govt regulation at the SEC and MMS (offshore rig inspectors) can't be adequately staffed because the pay scale is too low to compete with private industry. With 90 million people born each year a certain % will migrate to developed countries illegally creating higher deficits. The only answer is larger deficits and more centralized control.
Not a very appetizing answer. Another vodka please....
Anyone here know of a good alternative to netdania?
How about a nice morphine drip? ;)
I would rather like a web-based java applet for a wide range of futures quotes in one convenient ergonomic enviroment, if that's allright with you.
Aren't we a picky bunch? ;)
???? ???? ?? ??-?????
I have two platfroms already cheers, both of them are shyte.
Bottom line, neither the "experts" predicting that the sky is falling based on the WLI, nor the other "experts" indulging in misinformed WLI-bashing in an effort to discredit the super-bears, have a real clue to what the WLI is all about. We created the WLI not to be an infallible, stand-alone recession-forecasting machine, but as one small part of a much larger array of leading indexes (each made up of many economic indicators) -- like the especially prescient U.S. Long Leading Index. This array amounts to a sophisticated sequential signaling system of the economy’s cyclical turning points. The WLI is designed to be interpreted in this broader context, and its message today is quite simple: a slowdown in U.S. economic growth is imminent, but a new recession is not.
I like to be well informed - not misinformed.
Source : http://www.businesscycle.com/
Hope you're right. But an imminent slowdown of momentum that only exists because of government intervention and is nearly non-existent in the first place.....
Slowdown is imminent, recession is not.
You say potAto, I say POTaTO.
semantics.
dow 36,000 becomes dow 3600.
you say neither i say niether?
when does a slowdown become a recession? when does a recession become a depression?
I think it was this week.
By the way, Colonel, do you mind if I join you? I'm sure it's five o'clock somewhere.
It was about seven hours East of me when I started. Join on in.
The stock market trended up through the 1923, 1927, 1948, 1953, 1958 and 1960 recessions. And we all know more recent history. Yet there was no recession in Carter's first two years, but they were disasters for the markets. So the markets don't care that much about recessions. What matters is that stocks are overvalued and the economy is underperforming. A toxic combo.
http://www.smithers.co.uk/page.php?id=34
for his interp of "q" and CAPE
There is no 'pricing in' the depression we're facing, no matter how many hopiates the talking heads ingest.
the water in the toilet bowl is swirling faster and faster
Well just to let you all know, we had the death cross occur on the SPX.
Can anyone explain the huge difference between the ECRI's WLI and the Conference Board's LEI beyond the fact that the WLI has data for june and the LEI's most recent data only extends to May?
I have gone through all of ECRI's data. Here is the link:
http://businesscycle.com/resources/
Then click on the Excel symbol under "data" on the WLI line.
It appears that the current -7.7% data point has only been seen in recessions. In fact, the lowest level seen in the severe 1982 down was -5.2.
In absolute terms, the current absolute level of the WLI was first reach in April 1998. The peak was 143.9 in June 2007.
We should also remember that if population grows 1% a year, a 1% growth rate is baseline, but the economists use zero. Thus if we get below 1%, it really is negative growth.
If the unemployment checks stop, and federal funds to the states dry up, it will be Great Recession part II: State Insolvency and Muni Bond Implosion.
Instant Karma: Not sure Depression 2.0 ended . . . but IMO the best thing that could happen is for the Feds to wean the dependents from suckling, as Mommy is starving herself feeding the children.
Certainly a lot of details like that to take into consideration. Thanks windows vps | cheap vps | cheap hosting | forex vps