bmichaud Posted June 15, 2012 Share Posted June 15, 2012 http://pragcap.com/trucking-the-economy-is-still-expanding http://pragcap.com/rail-traffic-still-expanding-modestly-2 Amazing how well the US economy is holding up. ECRI lookin pretty bad..... Link to comment Share on other sites More sharing options...
mankap Posted June 15, 2012 Share Posted June 15, 2012 ECRI has said that timeline they had given for their recession call is this summer. I was of the opinion that ECRI is the best out there in terms of forecasting the economy. If they get it wrong this time , they will lose all the credibility. Link to comment Share on other sites More sharing options...
bmichaud Posted June 15, 2012 Author Share Posted June 15, 2012 ECRI has said that timeline they had given for their recession call is this summer. I was of the opinion that ECRI is the best out there in terms of forecasting the economy. If they get it wrong this time , they will lose all the credibility. At the time of their original call they believed we were headed into a recession beginning perhaps in the fourth quarter of last year, now that call has been pushed back to the second quarter of this year.... If you look at the coincident indicator graph here, http://www.businesscycle.com/news_events/news_details/5065, you can see how it pops back up late last year/early this year. ECRI claims government intervention cannot alter the business cycle, so this graph either means central banks can alter it or ECRI is wrong. My guess is that massive global monetary stimulus has been a boost to global confidence, which is so vital to such a globalized economy, and at the giant US fiscal deficit is keeping things afloat here, as evidenced by these "muddle-through" transport stats. Link to comment Share on other sites More sharing options...
rranjan Posted June 15, 2012 Share Posted June 15, 2012 ECRI has said that timeline they had given for their recession call is this summer. I was of the opinion that ECRI is the best out there in terms of forecasting the economy. If they get it wrong this time , they will lose all the credibility. They already got this wrong. If they keep shifting the time line then eventually they will be right( be it 6 moth or 5 years). Link to comment Share on other sites More sharing options...
mankap Posted June 15, 2012 Share Posted June 15, 2012 I agree, if they get it wrong now they lose all the credibility. Link to comment Share on other sites More sharing options...
Valuebo Posted June 15, 2012 Share Posted June 15, 2012 They have been shifting the time line for some time now yes. If we had to believe their first forecast we probably were already 6 months into the recession. Will people say that they were right if we see a recession by August? What about October? December? I want those odds; be "right" 3 times (sure, still hard) and you are considered an expert! 8) Imo there will always be to many factors influencing the whole picture. We can never be sure of what will happen and the future is (obviously) always uncertain. It isn't more uncertain now than it ever was, so... invest! ;) Link to comment Share on other sites More sharing options...
WarrenWatsa Posted June 15, 2012 Share Posted June 15, 2012 ECRI made a recession call on Sept. 23, 2011, for its clients. 9 months later and still no sign, and the US stockmarket has once again gone up. ECRI looking like fools. Tremendous amount of credibility has already been lost. If they hadn't been so downright insistent on a recession having begun by the middle of this year, perhaps they wouldn't look as bad as they do right now. Link to comment Share on other sites More sharing options...
Rabbitisrich Posted June 15, 2012 Share Posted June 15, 2012 ECRI made a recession call on Sept. 23, 2011, for its clients. 9 months later and still no sign, and the US stockmarket has once again gone up. ECRI looking like fools. Tremendous amount of credibility has already been lost. If they hadn't been so downright insistent on a recession having begun by the middle of this year, perhaps they wouldn't look as bad as they do right now. Some of the lost reputation is healthy for the firm and for its clients. Supporters were getting cultish and credulous because of ECRI's track record. Even now, it is a great record, and Achuthan has been more specific with his criteria recent interviews. Link to comment Share on other sites More sharing options...
WarrenWatsa Posted June 15, 2012 Share Posted June 15, 2012 It would be healthy only if the ECRI came out and admitted their mistake or, at least, that they were too early in making their call. So far, none of that. Link to comment Share on other sites More sharing options...
ERICOPOLY Posted June 15, 2012 Share Posted June 15, 2012 It would be a first if an economic clairvoyant were always to be correct in every call they've ever made. So, no, I don't think they lose any credibility. You have to question why anyone believes a forecaster will be infallible, and then for them to "lose faith" in that person if they finally make a bad call. Link to comment Share on other sites More sharing options...
twacowfca Posted June 15, 2012 Share Posted June 15, 2012 It would be a first if an economic clairvoyant were always to be correct in every call they've ever made. So, no, I don't think they lose any credibility. You have to question why anyone believes a forecaster will be infallible, and then for them to "lose faith" in that person if they finally make a bad call. Yeah, a call in a dynamic situation is probabilistic, not determinative. Link to comment Share on other sites More sharing options...
WarrenWatsa Posted June 16, 2012 Share Posted June 16, 2012 As far as I'm concerned, making 2 or 3 correct recession calls, which is all that the ECRI has done in its brief life, doesn't mean anything - especially when it's accompanied by a wrong call as we've just seen. I see them as no better or worse than any other forecaster. In other words, I wouldn't waste my time bothering to listen to them because they haven't been around long enough to even speak with as much as cockiness as they do on their Bloomberg and CNBC appearances. They're getting a lot of flack not because they made a mistake, but, because they were so adamant that there 100% would be a recession that would've started by now. Unlike many of those who forecast, they left themselves no room whatsoever for error or for even the possibility of being wrong - basically dismissing anyone who disagrees with them. They purposely put their reputation on the line as part of this recession call, and now they're getting criticized for blowing it - no surprise there! Link to comment Share on other sites More sharing options...
txlaw Posted June 16, 2012 Share Posted June 16, 2012 "People have always had this craving to have someone tell them the future. Long ago, kings would hire people to read sheep guts. There's always been a market for people who pretend to know the future. Listening to today's forecasters is just as crazy as when the king hired the guy to look at the sheep guts." -Charlie Munger Link to comment Share on other sites More sharing options...
Viking Posted July 16, 2012 Share Posted July 16, 2012 Here is a recent video from ECRI; my guess is their view is still in the minority. With the passage of time, my guess is they will be proven to have been correct (give or take a few months). If true, we will have an interesting Aug & Sept ahead of us. I will also be closely watching earnings guidance from the US large cap space. Interesting times! http://www.businesscycle.com/# Link to comment Share on other sites More sharing options...
VAL9000 Posted July 16, 2012 Share Posted July 16, 2012 Even a stopped clock tells the right time twice a day. Link to comment Share on other sites More sharing options...
Viking Posted July 17, 2012 Share Posted July 17, 2012 US 10 year bond yields are back at historic lows at 1.48% US GDP is clearly slowing: http://www.bloomberg.com/news/2012-07-17/gross-says-u-s-nearing-recession-as-goldman-sachs-cuts-forecast.html The odd man out is the US stock market. What is a little bizzarre to me is it seems to rally when the economic news actually gets worse... with the expectation that Bernanke and the Chinese will announce QE3 etc. http://www.bloomberg.com/news/2012-07-17/asian-stocks-fall-on-imf-cut-to-gdp-outlook-u-s-data.html Link to comment Share on other sites More sharing options...
bmichaud Posted July 17, 2012 Author Share Posted July 17, 2012 US 10 year bond yields are back at historic lows at 1.48% US GDP is clearly slowing: http://www.bloomberg.com/news/2012-07-17/gross-says-u-s-nearing-recession-as-goldman-sachs-cuts-forecast.html The odd man out is the US stock market. What is a little bizzarre to me is it seems to rally when the economic news actually gets worse... with the expectation that Bernanke and the Chinese will announce QE3 etc. http://www.bloomberg.com/news/2012-07-17/asian-stocks-fall-on-imf-cut-to-gdp-outlook-u-s-data.html As I learned ever so painfully late last year, the market doesn't care about recessions - all it cares about are profits and sentiment. Last year profits held up and sentiment became far too negative, hence the market rallied (Hussman et al can attribute it to QE umpteenmillion all they want, but that was merely coincidental with sentiment rebalancing). These same factors appear to be driving the current environment..... The latest GAAP earnings for the SPX are about $86 per share according to Schiller's latest spreadsheet (see here: http://www.econ.yale.edu/~shiller/data.htm) - so at 1350, the market currently trades for 15.70 times. On an unadjusted basis, this appears reasonable if one does not take into account profit margin mean reversion. James Montier has a wonderful paper out on profit margins and how the massive government deficit is what is currently propping it up (see attached) - I'd say this is the biggest risk to profits, but as my father likes to say, Washington has a remarkable ability to kick the can down the road.... What is a little bizzarre to me is it seems to rally when the economic news actually gets worse Again, as I so painfully learned, this is a sign of a healthy market - in other words, the bad news is priced in at least for the intermediate term. Montier_Profit_Margins.pdf Link to comment Share on other sites More sharing options...
Valuebo Posted September 23, 2012 Share Posted September 23, 2012 Interview from 13 september. http://www.businesscycle.com/news_events/news_details/5142#.UF8X5lbHSWM.google So I guess he has almost 18 months (till the end of 2012) for his prediction to be correct? Even is he is "right", where is the value in his service? Link to comment Share on other sites More sharing options...
Guest rimm_never_sleeps Posted September 23, 2012 Share Posted September 23, 2012 right now it's more crisis/message management than econ forecasting for them. and you're right. his unwillingness to back off from his recession call cost a lot of subscribers money as the market is up mid teens this year. Link to comment Share on other sites More sharing options...
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