Numerous Kossacks that frequently write about our economy – people whom I would consider to be respected in this community, both from the left and from the center -- have often quoted the Economic Cycle Research Institute (ECRI) as a trusted source for information regarding economic forecasts.
So, it is with some sense of emphasis, at least in terms of the validity of the source of this information, that I thought it would be important to some folks here to learn that Lakshman Achuthan, co-founder and chief operations officer of the ECRI, has just stated on t.v. that we’re going to experience a double-dip recession “scare” in coming weeks. And, per Credit Writedowns’ Ed Harrison’s analysis, we might just want to take this “scare” a slight bit more seriously than a similar occurrence from last year.
Then again, with ongoing, high unemployment, a double-dip that’s already in play in our nation’s housing market, as well as the potential for a U.S. debt default on the table; not to mention a myriad of potential sovereign defaults on the boards in Europe, this shouldn’t come as too much of a surprise to anyone (other than the confidence fairy) reading this, now should it?
Of course, there are the questions concerning how this might affect the current narrative(s) emanating from Capitol Hill and the White House in the run-up to the 2012 elections, too.
Didn’t Democrats already try the “things-might-be-f*cked-up-now,-but-they’ll-be-even-more-f*cked-up-if-you-vote-for-the-GOP” meme in 2010? Well, seeing as how that worked out so well for us last year, let’s just do it again! But, this time, it’ll be: “New and improved! Now with more anti-Keynesian austerity!”
Then again, even for those in the deepest modes of denial, sometimes reality has a way of biting one in the ass…
(NOTE: Diarist has been provided with written authorization from Naked Capitalism Publisher Yves Smith to reproduce her blog’s posts in their entirety for the benefit of the DKos community. Additionally, other people that guest-post and crosspost at Naked Capitalism, such as Credit Writedowns’ Ed Harrison, and mortgage insurance legal expert Tom Adams, have frequently provided redundant authorization[s] to the diarist for purpose[s] of distribution of their Naked Capitalism posts at DKos, as well.)
ECRI expects ‘double dip scare’
Ed Harrison
Naked Capitalism
Cross-posted from Credit Writedowns
July 28, 2011 1:16PM
Below is a video [Kossacks, simply click on the link which is the headline of this post for access to the video] of Lakshman Achuthan, co-founder and chief operations officer of the Economic Cycle Research Institute (ECRI), talking about the economic outlook for the US. I profiled Achuthan’s views on a broad US slowdown when I wrote in May about why a global slowdown will hit by summer. Now that we are in Summer, both economic and earnings growth estimates are being cut. The question is “what should we expect going forward?” Achuthan answers this in speaking with Matt Miller, Deirdre Bolton and Lizzie O’Leary on Bloomberg Television’s "InsideTrack". He also also discusses corporate earnings.
Note that last year we had a slowdown which analyst Albert Edwards could foresee as far back as April. Throughout the summer, many people were using at the change in the ECRI’s leading indicators as a potential sign of a double dip. Achuthan repeatedly assured us there was no a double sip sign, telling Barron’s in June:
“While the plunge in WLI growth to a one-year low assures a significant slowing in U.S. economic growth in the coming months, the recent weakness has not lasted long enough to signal a new recession threat.”
When I wrote a note on recessions and recoveries in September, I mentioned that Achuthan thought we had even odds of a double dip. Eventually, the double dip threat faded. Achuthan was saying no double dip recession by October of last year even as the Fed started QE3 to deal with the slowdown.
For his part, Achuthan proved to be an accurate forecaster of the economy throughout that episode. Timing-wise, this dip is similar. I would say, though, Achuthan seems less optimistic this year than last. Take a look. I think this is a good segment.
Who was it that said: ”The definition of insanity is repeating the same action and expecting a different result?”