Lakshman Achuthan: "The Entire West Is In The Yo-Yo Years"

ECRI's Lakshman Achuthan thinks we've hit stall speed. Sobering analysis of the economic fundamentals versus asset market performance. The economic term "recession" is about the former. Achuthan doesn't like what he sees of the fundamentals.

In 80% of the last 15 recessions you have had an associated bear market. That is why if you hear the word recession, you say, oh my gosh, we have to run to the hills in the equity market. But in three out of those 15 recessions, we had stock prices rise through the recession.

I suspect that the Fed has engineered artificial support for asset markets through low interest rates and QE to create inflationary expectations (even though there is no mechanism to account for it). This has had a euphoric effect on equities. When the economic fundamentals actually improve, then the Fed will start raising rates again, and rising interest rates affect margin cost and therefore dampen speculation in asset markets. It's difficult to tell what will happen when market behavior has been intentionally distorted.

Zero Hedge
"The Entire West Is In The Yo-Yo Years"
Tyler Durden

Cullen Roche — Koo, the BSR and the coming “fiscal cliff”

Read it at Pragmatic Capitalism
Koo, The Bsr And The Coming “Fiscal Cliff”
by Cullen Roche

Doug Short on ECRI and Conference Board leading indicator divergence

Read it at Business Insider
The Great Leading Indicator Smackdown: ECRI Vs. WLI
Doug Short, Advisor Perspectives
(h/t Credit Writedowns)

ECRI's Lakshman Achuthan sticks to recession call

While destroying the myths and biases of the plenitude of long-only talking-heads seems to have been the mission of Mr.Market for the last decade or so, Lakshman Achuthan of ECRI does an excellent job ofdismissing the coincident indicator trees for the leading indicators forest in an interview with Bloomberg TV. His 'recession is happening' call from September 30 still stands, proving he does not flip flop like all other so called experts on every up or downtick in the SPY, and is expecting a formal recessionary print in GDP within three quarters, though noting that the recession very likely did not start in Q3....

Read the rest at Zero Hedge and watch Bloomberg video
ECRI's Achuthan Sticks To His Guns: The US Recession Still Is Happening

Excellent video. Achutan holds that GDI (income) vector is more important to look at than GDP (product).

"It's the demand, stupid," regardless of green shoots.