In recent months, our recession models have forcefully shifted to warning of oncoming recession. Our initial concern in August was based on a fairly compact set of indicators that we track as a Recession Warning Composite (see Recession Warning, and The Proper Policy Response ), followed by a deterioration a few weeks later in much broader statistical and ensemble models we've developed (see An Imminent Downturn ).
On Friday, Lakshman Achuthan of the Economic Cycle Research Institute reviewed the weight of ECRI's research, observing "Now it's a done deal. We are going into a recession." (Required viewing: Lakshman Achuthan on CNBC , as well as additional commentary at the ECRI website... I'll wait).
For us, the ECRI is an important source of analysis to confirm or question our own views, as it is undoubtedly the best private economic research group we know. They are conservative in their major economic calls, but are still invariably far ahead of the consensus. Though ECRI's Weekly Leading Index deteriorated sharply in 2010, ECRI did not go to a recession warning, and the Fed was successful in provoking enough hope, speculation, and pent-up demand to kick a downturn slightly down the road in any case. Soon after reaching what we've called "the cliff" at the end of June (when the major sources of fiscal support and Fed-driven speculation simultaneously ran out), numerous leading economic measures promptly collapsed.
Read the complete comentary
On Friday, Lakshman Achuthan of the Economic Cycle Research Institute reviewed the weight of ECRI's research, observing "Now it's a done deal. We are going into a recession." (Required viewing: Lakshman Achuthan on CNBC , as well as additional commentary at the ECRI website... I'll wait).
For us, the ECRI is an important source of analysis to confirm or question our own views, as it is undoubtedly the best private economic research group we know. They are conservative in their major economic calls, but are still invariably far ahead of the consensus. Though ECRI's Weekly Leading Index deteriorated sharply in 2010, ECRI did not go to a recession warning, and the Fed was successful in provoking enough hope, speculation, and pent-up demand to kick a downturn slightly down the road in any case. Soon after reaching what we've called "the cliff" at the end of June (when the major sources of fiscal support and Fed-driven speculation simultaneously ran out), numerous leading economic measures promptly collapsed.
Read the complete comentary
