ECRI Tealeaves
November 24th, 2006 by 
reality
Apropos of previous comments, I have a second hand report on a CNBC spot this morning with Lakshman Achuthan, Economic Cycle Research Institute: “People don’t realize that there is a ’stealth slowdown’ in retail sales right now.”
The person who saw the spot said: “He’s leaning bearish but at the risk of not being viewed negatively on tv, he hedged his bets and said, “A ’soft landing’ is in the cards.
Another interesting observation on my part was how uncomfortable he felt in relaying the information, beads of sweat on his forehead, it was easy to tell that he didn’t want to be a wet blanket, and he had to spin things a little positive by mentioning a soft landing, but it was easy to see an uneasiness in him and that he sees some difficulties ahead.”
FWIW. Heck, this is worse than watching the Fed.
In any event the big news today was the weakness of the dollar against both the euro and the yen. While the dollar decline stopped at technical support and held there, this may mean that the day of reckoning just came a whole lot closer. At some point folks are going to figure out that exchanging real stuff for pieces of electronic paper is not a good deal without some scarcity value to the paper.
Posted in The Economy | 
November 27th, 2006 at 12:36 pm
This topic is yet another indictment of eye witnesses! I watched the interview and have exchanged emails with Lakshman - a very generous fellow with his time for a piddling client such as me. His caution was PURELY on co-incident indicators like retail sales. He then went on to sound quite sanguine about the economy through mid 2007. ECRI has flown in the face of conventional wisdom before - they are certainly human but have not shown a “need” to be part of the crowd. Theirs’ is a broad measurement/forecast of future economic activity. A slow down in retail sales plus a popping housing bubble does not HAVE to equal a recession in the 1st half of 2007! It will certainly contribute to one eventually, but to try and twist what ECRI is saying to confirm a 1st half 2007 recession is the height of confirmation bias and data mining. ECRI may be wrong (not usual), but it is clear to understand what they are forecasting.