Comments on: Mohamed El-Erian vs Lakshman Achuthan

By: Pat G.

Pat G. — Sat, 03 Oct 2009 00:59:24 +0000

I gotta admit, I don’t know much about El-Erian because I believe he’s a bond guy. Though not James. I see Achuthan often on Your $$$ on the weekend. I view him as a positive spin kind of guy but what do I know? Almost everyone is more positive than me. I guess the reason for that is largely due to getting older and becoming more cynical. I’ve been riding or watching this merry-go-round for some time now and am convinced that nothing noticeable with respect to man versus man is going to happen in my life time. Man to the moon… big deal.

By: Onlooker from Troy

Onlooker from Troy — Fri, 02 Oct 2009 23:07:02 +0000

Don’t even get me started about that ECRI opinion about it having been a “recession of choice.” That right there tells me they/he doesn’t understand a thing that’s going on re: the debt overhang and resultant deflation that’s being fought by the Fed’s money hose.

By: mcHAPPY

mcHAPPY — Fri, 02 Oct 2009 20:27:13 +0000

Actually could someone verify the Uncle Sam job number? I could have sworn I read it earlier however I can’t find where I read it and Mrs. mcHAPPY is ready to make our dinner reservations! Sorry if I put the wrong number up.

By: Moss

Moss — Fri, 02 Oct 2009 20:25:01 +0000

Which one manages real money?
Bet on him.

By: mcHAPPY

mcHAPPY — Fri, 02 Oct 2009 20:24:48 +0000

Harry? Are you feeling o.k.? I have been relying on you to see the other side of things. Who is going to lead the way now?

@scepticus:

Uncle Sam may not be the future employer of Americans. Did you notice todays jobs that showed Uncle Sam cut nearly 55,000 jobs?

Also did anyone check out the numbers of actual numbered employed between Aug and Sept? It is a 995K difference – hat tip market-ticker/Denninger for stating the glaring obvious like only he can.

By: rootless_cosmopolitan

rootless_cosmopolitan — Fri, 02 Oct 2009 20:23:08 +0000

owen b,

“Everyone here seems to agree that there’s no recovery a la the PIMCO view. When everyone agrees it’s often good to question the collective wisdom as it were.”

No one hinders you to bring arguments, with which you think you can question whatever is thought by whoever. But pointing out that a majority wherever agrees on something isn’t an argument by itself.

As for whether ECRI did or didn’t see the recession coming.

I quote from your first link, which dates from January 2008:

“The U.S. economy is now in a clear window of vulnerability, given the plunge in ECRI’s Weekly Leading Index (WLI) since last spring. Yet there is a brief window of opportunity within that window of vulnerability to avert a recession. That is why ECRI has not yet forecast a recession.

WLI growth accelerated to a three-year high last June, anticipating the quickening in GDP growth to a four-year high in the third quarter of 2007. The economy’s resilience surprised most economists, given the earlier Fed rate hikes and oil price spikes – a combination that had helped trigger earlier recessions. But the strength in the WLI underscored the economy’s buoyancy, correctly ruling out a recession.

WLI growth then turned down sharply, and, by year-end, had plunged to its worst reading since the 2001 recession. This indicated an economy seriously vulnerable to recessionary shocks.”

So, according to ECRI no recession in January 2008 yet.

Finally in March 2008, they called the recession.

However, the NBER has dated the start of the recession for December 2007:
http://wwwdev.nber.org/cycles/dec2008.html

So where and when did the ECRI see the recession coming? In March 2008, they still might have been earlier than others in acknowledging that there is a recession. But calling the recession when it already has started is not a prediction.

By: mkkby

mkkby — Fri, 02 Oct 2009 20:08:01 +0000

It’s impossible to debate with ECRI because they never give reasons, other than their black-box model. But the only thing up strongly is the stock market, so it is highly likely that is key to their model. In which case it is total nonsense to be bullish because the stock market is just a betting pool. It has no predictive value.

By: HarryWanger

HarryWanger — Fri, 02 Oct 2009 20:01:55 +0000

Closed all my long index positions today. Holding AAPL still. Didn’t feel comfortable going into the weekend.

By: Thor

Thor — Fri, 02 Oct 2009 19:55:58 +0000

another selloff into the close

By: call me ahab

call me ahab — Fri, 02 Oct 2009 19:53:32 +0000

owne-

to follow up on what manny said-

i wouldn’t call the TBP crowd the predominate view- except for maybe here and a few other blogs-

do you consider TBP the predominate view? yeah- right- I didn’t think so