One of the themes I have talked about repeatedly is my view that we are in a “new (economic) environment.” Assuming this is true, then models that have worked well historically may face rather difficult odds in the future as to their predictive powers.

I have recently commented about ECRI’s current forecast at the following link, as well as other economic forecasts at the same site:

http://www.economicgreenfield.com/2009/07/15/recent-ecri-statements/

Here are a bunch of questions I can’t get an answer to: How does this model account for our massive debt levels relative to GDP? How does this model account for the fact that our taxes are about to go up? How does this model account for the aging of the population and the coming medicare crisis? What level of real GDP growth is this model predicting for next year or the next 5 years? If I can’t get an answer to these questions then why should I care?

Many obviously believe in the predictive powers and bought all the early cycle sectors.
Keep in mind that some are postulating that we had growth in the 2nd qtr.

Hi Spistol,

Here is a link to a public ECRI statement on recovery from early April:

http://www.businesscycle.com/news/press/1374/

Lakshman

Those lucky to have jobs are still in fear of losing them or seeing their hours scaled back…Their investments (in stock portfolios) have done NOTHING over the past 10 years…Their home has lost value over the last 2-3 years, and if they recently purchased, they may either be underwater or facing an option ARM reset which will further set them back…

So all I still see are economic “indicators” which temporarily tick positive due to massive government giveaways to stem the problem (through compensation benefits extensions – which will run out soon), and HOPE in the business community that this was, in fact, a garden variety recession…

When people are merrily shopping again, I’ll believe this is an ordinary cycle…Judging by anecdotal evidence that I see in the real world, it won’t happen unless someone happens to manufacture the artificial bubble (in something) of all time…and do it pretty quickly because the clock is ticking…

Yep. That’s basically my point. Yes they may have called the cyclical bounce correctly, but does it really matter in the context of what we’re going through here? Other than the fact that it’s good for a massive stock market rally driven by the psychology of a world that’s DESPERATE for good news and is willing to delude itself that all is well, even in the face of the overwhelming evidence to the contrary. Fascinating stuff.

Achuthan would have been thoroughly at home reporting on wheat or iron ore production for the Nazis or Stalin. He has no capacity for independent thought, intellectual substance, conscience or credibility. Banana Republics are overloaded with people like this; it’s the Tyranny of the Incompetent™.