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ECRI's Achuthan Sticks To His Guns: The US Recession Still Is Happening

Tyler Durden's picture




 

While destroying the myths and biases of the plenitude of long-only talking-heads seems to have been the mission of Mr.Market for the last decade or so, Lakshman Achuthan of ECRI does an excellent job of dismissing the coincident indicator trees for the leading indicators forest in an interview with Bloomberg TV. His 'recession is happening' call from September 30 still stands, proving he does not flip flop like all other so called experts on every up or downtick in the SPY, and is expecting a formal recessionary print in GDP within three quarters, though noting that the recession very likely did not start in Q3. The constant clamoring of the consensus that we will 'muddle through' or that we are firming in hopes we repeat the Keynesian love-fest of 2009 (which he rejects as nothing being indicative of this at all) is eschewed as the man-with-the-best-name-for-anagrams-in-finance gives Tom Keene a little history lesson on the foibles of minute-by-minute coincident (or short-leading) macro data watching (and prognosticating). The ongoing deterioration in the ECRI index (and leading indicators) combined with his noting that GDP tends to revise/revert towards GDI (even though the two should be the same given their either-side-of-the-same-coin nature) and the previous GDI print was much weaker. He ends on a less than optimistic note pointing out that the pace of each economic recovery since the 1970s has been getting lower and lower and cycle volatility has increased helping to confirm his recession-is-happening call.

 

 

 

Chart: Bloomberg

Launch? A Math Shank!

Anal Ah? Thanks Much!

 

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Fri, 12/09/2011 - 10:30 | 1962630 Waffen
Waffen's picture

Lindsey punting to sept/oct of 2012.... ~sigh~

Fri, 12/09/2011 - 11:35 | 1962895 The Big Ching-aso
The Big Ching-aso's picture

 

 

No-shitium proclamations everywhere ya look.     I'm still waiting for some renowned powerhouse 'think tank' to come up with something we already didn't know here 2 years ago.

Fri, 12/09/2011 - 10:26 | 1962617 Irish66
Irish66's picture

no kidding

Fri, 12/09/2011 - 10:29 | 1962626 GeneMarchbanks
GeneMarchbanks's picture

Tom Keene = fucktard.

Fri, 12/09/2011 - 10:33 | 1962636 kralizec
kralizec's picture

The Obama Depression continues, film at 11.

Next up, how the Neo-Keynesian's will save us from certain doom!

Fri, 12/09/2011 - 10:34 | 1962640 qussl3
qussl3's picture

March 2012 EU summit.

Dovetails pretty nicely for global QE.

Just in time for elections too.

Fri, 12/09/2011 - 10:39 | 1962647 SheepDog-One
SheepDog-One's picture

Sure go for it, I'll take $2,200 the new floor for gold, but the $140 new floor for oil and being priced out of food wont make voters feel too giddy though I bet.

Fri, 12/09/2011 - 10:46 | 1962682 qussl3
qussl3's picture

Nah, i think we get QE in March simply because food and oil and paper PMs will be cheaper then than now.

This feels exactly like end 08, everyone can see the wall coming buy no one wants to get off till bonus season is over.

Jan Feb and going to be a bitch.

Fri, 12/09/2011 - 10:39 | 1962649 firstdivision
firstdivision's picture

How the fuck are we up 1%?

Fri, 12/09/2011 - 11:16 | 1962814 walküre
walküre's picture

scripted and pre-programmed bots trading

Fri, 12/09/2011 - 10:39 | 1962650 Stoploss
Stoploss's picture

YAY LA, was wondering when the frequency issue would finally come up. Took long enough.

Fri, 12/09/2011 - 10:45 | 1962675 vote_libertaria...
vote_libertarian_party's picture

Here is why GDI (incomes) are flat while GDP rises....DEFICIT SPENDING.

 

You have a $1.5T federal gvt fantasy land fund boosting everything.  It isn't income.

 

Some day soon rates are going to rise and it ain't going to be pretty.

Fri, 12/09/2011 - 12:52 | 1963294 Au_Ag_CuPbCu
Au_Ag_CuPbCu's picture

Exactly!  That is why China's GDP doesn't mean shit, they can continue to build, build, build (a huge bubble) and print nice GDP numbers.  Doesn't mean their economy is truly expanding.

Fri, 12/09/2011 - 10:48 | 1962692 rambler6421
rambler6421's picture

Achuthan is usually spot on.  Add in Europe, we should be heading towards a recession.

 

libertarian86.blogspot.com

Fri, 12/09/2011 - 11:16 | 1962815 walküre
walküre's picture

Netherlands entered recession today officially.

Fri, 12/09/2011 - 11:00 | 1962752 Inspector Bird
Inspector Bird's picture

Achuthan is correct most of the time.  ZeroHedge, however, attacked him for a while back in 2009 or so, when his indicators showed potential growth (they did, and then there was 'growth' as he predicted, though not the kind we need - which creates jobs). 

It's nice to see that ZeroHedge is back on board.  Achuthan is usually apolitical.  His indicators showed potential growth in GDP, which did occur, and he calls it like he sees it.  I gotta give him his props.

Fri, 12/09/2011 - 11:01 | 1962756 Dick Darlington
Dick Darlington's picture

Commerzbank to the rescue! They say 4% GDP print realistic based on todays trade deficit and VERY strong Q4 overall. Makes me wonder if they too use old models from Moody's which don't allow negative numbers...

Fri, 12/09/2011 - 11:15 | 1962808 walküre
walküre's picture

Commerzbank is broke. They won't be there when the truth comes out. One of many getting gutted.

Fri, 12/09/2011 - 11:13 | 1962802 Corn1945
Corn1945's picture

They can make the official economic data say whatever they want. Betting on an "offical" recession call is foolish. They can tweak away and manage a number greater than zero all day long.

 

Fri, 12/09/2011 - 11:15 | 1962809 SwingForce
SwingForce's picture

My SPY chart shows a low below 70 in March 2009.

Fri, 12/09/2011 - 12:20 | 1963127 daxtonbrown
daxtonbrown's picture

Well none of this news should be news to anyone at Zerohedge. You can't wish prosperity by waving a Keynesian wand and Tim Geitner isn't Tinkerbell (or maybe he is). The real news is that you can't trust anything coming out of the consensus economist forecasts. We truly live in a corruptocracy, something right out of Kafka.

The only way out personally is to get off the merry-go-roundf and let the house of cards collapse. That means gold, but you you can't eat the gold stuff. So you have to Go Galt in a lot more ways. That might mean stockpiling food or buying guns, but it really means an entire change in lifestyle. If you buy tools rather than intangibles (whether those tools are a power saw, education, software, or whatever), you'll survive the meltdown. A lot of our fellow clowns won't make it through this coming Depression intact. Go Galt. http://www.futurnamics.com/goinggalt.php

Fri, 12/09/2011 - 12:52 | 1963301 FoieGras
FoieGras's picture

Zerohedge has been RIPPING Achutan twice. In Spring 2009 when Achutan said there's going to be a great turnaround in economic activity and gains in employment.

The 2nd time when Zerohedge was predicting a recession in the summer of 2010 being a "done deal" and Achutan saying "Not so fast, no recession in sight".

 

It's funny now Zerohedge quickly forgets how they pi**ed on analysts before and now praises them for sticking to their guns. Having said that IMO Achutan is once again spot on and we're headed into a recession in the next 4-5 months. Just my 2c.

Fri, 12/09/2011 - 13:39 | 1963502 onebir
onebir's picture

Similar conclusion in Hussman's latest weekly:

http://www.hussmanfunds.com/wmc/wmc111205.htm

Fri, 12/09/2011 - 16:59 | 1964285 Victor Berry
Victor Berry's picture

Maybe someone can locate the video clip from last night's episode of CNBC Australia or CNBC Asia in which an economist or stock analyst was explaining how more and more corporations have increased their debt (stock and bond issuance) over the years and are not squeezing out any more profits.  The law of diminishing returns is obviously playing out now and should be a dire warning that the debt Ponzi scheme is about to produce negative returns ... world wide!

From all indications, we've got until April 2012 at the latest before the sh*t hits the fan.  [Note:  The Mayans were optimistic in their stock timing prediction, but then again maybe the Mayans were looking at a far worse calamity happening on 12/21/12.]  Being an American where our value as a human being is measured by the size of our bank/brokerge  accounts, I can't imagine anything worse than another stock market crash!

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