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ECRI says recession bottoming out
Old 04-03-2009, 06:52 AM   #1
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ECRI says recession bottoming out

Video - CNBC.com

In an interview this morning, ECRI has said their leading indicators show the recession has "troughed" "A durable shift in the forward leading indicators".

Hey - maybe the world's not coming to an end after all
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Old 04-03-2009, 08:58 AM   #2
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Think this'll turn into a rally?

Sucker.

-CC
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Old 04-03-2009, 09:31 AM   #3
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As always, it appears the market knew this in advance
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Old 04-03-2009, 11:00 AM   #4
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I just bought some RSU, this better be the case.
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Old 04-03-2009, 03:07 PM   #5
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Yeah, how about that! I've followed these ECRI folks for 10 years and the last few weeks have showed stabilization and now some actual improvement! ECRI is amazingly good - although their "prediction" window is only about 6 months which sometimes seems too short. WLI Edges Up

For all you inflation hawks out there - they also point out that "US Inflation Pressures at New 50-Year Low .

FWIW, I believe that the market has just barely begun to price in a recovery. And the market may have several spectacular gyrations even as things improve in the economy. Employment is a lagging indicator and we may be hearing a great many scary numbers for quite a while yet. There are probably lots of "spooks" in our near future.

Audrey
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Old 04-03-2009, 03:45 PM   #6
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Originally Posted by audreyh1 View Post
Yeah, how about that! I've followed these ECRI folks for 10 years and the last few weeks have showed stabilization and now some actual improvement! ECRI is amazingly good - although their "prediction" window is only about 6 months which sometimes seems too short. WLI Edges Up

For all you inflation hawks out there - they also point out that "US Inflation Pressures at New 50-Year Low .

FWIW, I believe that the market has just barely begun to price in a recovery. And the market may have several spectacular gyrations even as things improve in the economy. Employment is a lagging indicator and we may be hearing a great many scary numbers for quite a while yet. There are probably lots of "spooks" in our near future.

Audrey
Well said. I would add that the calling of a bottom to the recession says nothing about the recivery - neither when it begins nor how quickly it will pick up.
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A different perspective on NFP from Barry Ritholtz blog
Old 04-03-2009, 04:07 PM   #7
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A different perspective on NFP from Barry Ritholtz blog

NFP is out shortly, and the consensus is for an ugly number. U3 Unemployent is expected to rise to 8.5%, NFP loss is for 660k, according to a Bloomberg survey. Since the recession began in December 2007, the economy has already shed 4.4 million jobs. A 600k number will push the total recession losses over the 5 million mark.
One of the sillier things I keep hearing from the usual suspects it that since NFP is a lagging indicator, it doesn’t matter much.
This is an inappropriate way to analyze the employment data.
It is true that as a whole, employment data lags the cycle. This means the data series will still be negative even after the economy flips positive. On the other hand, Leading Indicators flip positive while the economy is still contracting.
While NFP lags the economic cycle, one should simply disregard the data. One cannot conclude — as some people have on TV — that the economy is improving and therefore NFP can be dismissed out of hand as a lagging indicator
Instead, if you are dissecting this data, you should be considering which parts of NFP are not lagging, and pay close attention to that. That means looking a three components
-Temporary Help
-Hours worked
-Income
All three of these tend to lead the cycle. These data points were falling long before either the market or the economy turned south. I expect they will stabilize before the economy improves. If I have a few free minutes later, I will update this data later.


Earlier this morning, I noted that although NFP lags the economic cycle, there are components of the Employment data that lead the economy. Let’s take a quick look at these elements:
• Total hours worked fell by 1%. Often times, employers who are trying to hold onto their best employees will cut overtime and hours in order to avoid layoffs. As of this month, the average workweek fell to 33.2 hours, the lowest on record dating back to 1964.
• Temporary help services lost 72k workers. This suggests that the bottom of the recession is not yet in, and that further contractioin is likely.
• Average hourly earnings rose 0.2% m/m. That is in line with the prior trend. Average weekly earnings dipped 0.14%, likely following the slight loss in total hours worked.
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Old 04-03-2009, 04:53 PM   #8
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I doubt this has all shaken out yet. GM hasn't gone into bankruptcy yet and banks are holding a lot of CDS on them. Commercial real estate is just starting to tank. I'll bet there are still a lot of cockroaches hiding under the couch. The market will go up and down, up and down, for a long time; that's what I think for what it's worth.
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Old 04-04-2009, 04:38 PM   #9
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Well, Even Paul Ferrell of the Lazymans Portfolio fame has called the Bottom in the Market..! But then again, It still could go back down to just 10 pts above the bottom and still he can be right...and stay there thru the Summer...

But if Some "$7 Trillion" is really sitting on the Sidelines, waiting to Punce back into the markets? Imagine it like the good old days..when they had to Stop Trading to catch up on the Millions of Orders for 15 min. and the market going up to it's Limit every day for days! Imagine a 50 pt gain on the S&P every day for a Month!
and 2,000 S&P ! and Inflation will be still only 2.5% ! And There will only be gasoline powered Cars in China and Russia adn banned In the USA and Canada..

Sure, In by the yr 2109 maybe! LOL
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Please speak English
Old 04-05-2009, 09:21 AM   #10
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Please speak English

Five of the previous nine posts have yielded the following: ECRI, RSU, WLI, NFP and CDS.

Is this supposed to mean something to me? Perhaps I'm just very stupid.

I had to link to the CNBC site (first time I've viewed their dubious content in years) and endure an awful advertisement, simply to learn how to frame the wonderful ECRI acronym. Could posters perhaps help us all out by spelling out the acronym, including stock symbols, at the beginning of their post, using the acronym or stock symbol thereafter? Or am I instead to memorize the symbols for all the publicly traded companies on the New York Stock Exchange (NYSE) in order to make sense of the content on this board? And what about the Hang Seng? And every half-baked think tank, policy institute, government agency, non-governmental organization (NGO), on and on ad nauseum.

Sorry for being so grumpy on this beautiful Sunday morning in Tucson, Arizona. I'm really just asking for clearer communication, please.

Tom
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Old 04-05-2009, 09:45 AM   #11
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Originally Posted by tomintucson View Post
Sorry for being so grumpy on this beautiful Sunday morning in Tucson, Arizona. I'm really just asking for clearer communication, please.

Tom
I just ate some nails for breakfast. Very filling. You might try that.
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Old 04-05-2009, 09:53 AM   #12
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Please speak English
I thought this post was going to be a reply to Dennis...
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Old 04-05-2009, 09:56 AM   #13
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Originally Posted by tomintucson View Post
I had to link to the CNBC site (first time I've viewed their dubious content in years) and endure an awful advertisement, simply to learn how to frame the wonderful ECRI acronym. Could posters perhaps help us all out by spelling out the acronym, including stock symbols, at the beginning of their post, using the acronym or stock symbol thereafter?

Sorry for being so grumpy on this beautiful Sunday morning in Tucson, Arizona. I'm really just asking for clearer communication, please.

Tom
I guess you figured out ECRI is Economic Cycle Research Institute. I linked a couple of their articles in my post above which would have answered some of your questions and here is their many website if you want to learn more about them. ECRI | Home. In fact, the first instance of WLI in this thread is in a link to their article that give the full phrase - WLI is their acronym for "Weekly Leading Index".

But quite frankly I won't be spelling out that many acronyms on here and I imagine few of our other posters will either. For stock and mutual funds and well known government institutions it's just too much work and many readers on this forum DO know many acronyms. As you delve into finance you'll learn many of these like the back of your hand plus it's so very easy to google acronyms on the internet.

Audrey
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Old 04-05-2009, 10:04 AM   #14
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But quite frankly I won't be spelling out that many acronyms on here and I imagine few of our other posters will either. For stock and mutual funds and well known government institutions it's just too much work and many readers on this forum DO know many acronyms. As you delve into finance you'll learn many of these like the back of your hand plus it's so very easy to google acronyms on the internet.
Plus, we have this handy guide in our FAQ section: * Acronyms and Slang Frequently Used on the Forum *
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Old 04-05-2009, 12:04 PM   #15
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Sorry, should have kept my thoughts to myself, as is often the case in life. I'm a man who knows when to stand down. Still a very beautiful morning here in Tucson.
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