This is an embarrassing display . . .


CNBC, Mon 07 Nov 11 | 06:35 AM ET

Category: Cycles, Economy, Video

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

16 Responses to “Business Cycle Trends”

  1. dsawy says:

    The problem here is that CNBC is staffed with market pimps. The job of CNBC is to pimp the market, every single day. Anyone who comes in with economic forecasting to the contrary it to be attacked.

    ECRI is looking at the economy, NOT the market. How the market responds to economic data these days is truly irrational – and has much more to do with the Charlie-Foxtrot in the EU than earnings or economics.

  2. theexpertisin says:

    CNBC…

    Ha.

  3. Thatguy says:

    Barry,

    Please mark this for a revisit in 1Q12. Just like to see how this ridiculous interview holds up. These clowns need to be held accountable.
    Liesman basically needs to have it spoon fed apparently.

  4. John_Donnelly says:

    I went through all the steps to register just to say I really enjoyed your Comments preamble. Nice work.

  5. finn0123 says:

    I’ll take the opposite view from those above.

    First off, the concept of ‘contagion’ amongst the indicators is fancys-speak for BS. If the exogenous (independent) variables are related to one another, the modeler has a problem with multicollinearity (or they’ve simply chosen too many variables), a ‘no-no’ most quant graduate students are well aware of.

    Secondly, to state the inter-relationship amongst these variables somehow guarantees a recession is 100% is to just lie. All non-physical science models contain an error term; nothing is 100%. You could say you are ‘very sure’ or identify, qualitatively or quantitatively, there are solutions to the coming event but believe the probability of these solutions is low (i.e. the future of the EU); 100% is crap.

    Lastly, and similarly, the 100% certainty states there are definitive causalities between the variables and a recession. Definitive causality in finance and economics is akin to looking for prime numbers in mathematics: everyone is looking for it because it because its uncommon and worth quite a bit. To think ECRI has discovered several definitive causal relationships is difficult, at best.

    If the argument was ‘other economists/Wall Street are not looking at what we’re looking at’ then I would give this a bit more credit, though with multiple parties looking at virtually everything this is hard to believe; still, you never know. ECRI is in essence claiming it has an arbitrage (again with the 100% certainty) and the market won’t take it away.

    Overall, do I ‘believe’ a U.S. recession may emerge due to the outcome of world events? Simply, yes. Do I think ECRI’s models have picked up on this? Not a chance. And do I think ECRI’s butt will be saved by an international event induced recession. All signs point to yes. Is any of this certain? Unfortunately in the case of ECRI’s reputation, no.

    (Please note this is not an endorsement of the CNBC commentators who are indeed often clueluess.)

  6. phil518 says:

    Barry,

    Do yourself a favor. Do not interview on CNBC with these clowns. Lakshman Achuthan basically had to talk so fast, so that interviewers did not have a chance to interrupt him. And they almost ridiculed him, trying to prove that CEO’s of financial companies, their biggest advertisers, see no recession coming. These are the same people who are back in 2008 were saying economy is just fine.
    Barry, boycott CNBC. Bloomberg, Yahoo Ticker treat you with much bigger respect, than these clowns from CNBC.

  7. susanj says:

    Since they were all set to pull up an S&P chart since he called recession, they should have also played this Squawk Box clip from April 2008 when many didn’t like ECRI’s recession call, and the market was running up.

    http://www.businesscycle.com/news_events/event_details/1493

  8. dhukka says:

    I’m glad you picked it up Barry. I posted on it here; http://www.thefundamentalanalyst.com/?p=3191

    I couldn’t believe Leisman, one of the most embarrassing moments of his career. Let’s hope they have Achuthan back next year when and if a recession is obvious to all. Even Sorkin looks ridiculous asking for a specific call on market levels when he knows full well Achuthan isn’t in that business.

  9. mdaliv62 says:

    Why watch CNBC? Remind me again why time lost watching that show is worth anything (at least til Becky comes back)?

  10. Greg0658 says:

    finn0123 Says “All non-physical science models contain an error term; nothing is 100%.”
    then Says “All signs point to yes”
    see 9 of 20 answers:
    http://en.wikipedia.org/wiki/Magic_8-Ball
    “Signs point to yes”
    :-)

  11. V says:

    “Goldman raised it’s estimates”

    Does anyone not laugh these days when you hear these types of phrases?

  12. Econ101 says:

    Just a comment for finn0123

    Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. It is obvious you are not familiar with ECRI’s methods. They emphatically do not use models (and have made this fact clear on countless occasions). They have repeatedly written that economists (due to a history of physics envy) use models which are notoriously wrong as they are lokoking in the rear view mirror and assuming the near future is a function of the recent pass. Wrong. Which is why economists are notorious for missing calls on recessions both for and against. Therefore you know not what you speak of and your self engrandizing comments about 100% of anything is common knowledge and a wasted point.

  13. bear_in_mind says:

    I’m glad I don’t waste money on a cable subscription that includes BubbleVision. Lakshman tried to redirect them but they would have none of it. Good lord… what a bunch of churlish idiots, morons and fools.

  14. kenny powers says:

    To not believe in the ECRI forecast despite it’s track record is one thing, and totally fine. To interrupt your guest rudely every time he tries to argue his case is quite another. I thought Simon Hobbes was the biggest idiot on CNBC (see interview with Michael Pento from last year where this exact thing happened, then escalated when Michael Pento just laughed at Hobbes for being an asshole), but I stand corrected.

    Sorkin is the worst by a mile.The interview with Sean Egan the other day was even worse. Ross-Sorkin is not only ignorant when it comes to how financial markets work (what role should a rating agency play, Sorkin? That of a monday morning quarterback?), but he is also childish and rude. CNBC has made a new low point, which is saying something when you consider that that buffoon Jim Cramer is on their payroll and on the air almost every day.

    I make it a point to watch CNBC every day for at least 15 minutes just to remind myself how many idiots there are in the financial universe. Gives me a psychological boost.

    KP

  15. finn0123 says:

    Nice catch Greg0658; my apologies for getting the exact wording wrong, especially given the context.

    In regards to Econ101, I think you may be a bit wrong. ECRI does not claim they don’t have a model, they claim their work is not an econometric model. Naturally, not all models are econometric (though I’m sure many economists would like to believe so); I doubt you thought all models were econometric in nature, but recognize neither did I. For the most part the terms I use encompass much of the mathematical and statistics work of many schools of thought. I do reference economics and finance, though, since we are discussing economic and finance related events and there is an argument on whether causality comes from the econometric camp. If you believe this makes the discussion about econometrics I apologize for not being clear. Yet, to argue ECRI does not have a model is to state their work does not contain any mathmetical concepts or language. If your argument is ‘its an index’, I would simply point out an index is a model as well. In the end, their work uses models.

    You are correct in implying I could have said the above more succicntly; it was certainly not my intent to self-aggrandize, but I do have a habit of being wordy. I disagree, though, my post is a wasted point, in that if, as you appear to state, it is common knowledge nothing is 100%, then how why does ECRI claim this? This would seem to show a lack of the scientific understanding you referenced.

    Overall, though, I think you missed my point (which is likely easy given the length of the post). In the past, many followed the models of economists and those who did lost. To throw the economists and their models on the pyre and yet follow a different model simply because it doesn’t have the word ‘econometric’ in front of it seems to miss the point: the idea of 100% forecasts regarding anything involving humanity is just not true.

    Finally, when pressed on this ECRI chose to be vague about their work. I understand protecting trade secrets, but, IMHO, the actual choice of words went beyond that and instead casts doubt on the nature of the work. Perhaps it is just a matter of poor word choice on their part, and given different circumstances and more amicable hosts it would have played out differently. In the end I didn’t believe in following everything the economists said and I don’t believe ECRI has it right when they something is 100% certain. I don’t see why these two should be mutually exclusive.