HaHa said:
Audrey, do you subscribe to one of their services? I took their low end service for individuals for a year, and liked it. But they upped rates to $169 I think, so I didn't re-up.
Still, if they do accurately tell you when to expect a recession, it would be cheap at even a higher price.
Ha
No - I do the freebie stuff and keep track of the weekly/monthly numbers myself. Then I read the press quotes which usually give away their outlook pretty clearly. They used to provide more stuff for free. I actually would be willing to pay up to say $10 bucks a month, but I find their fees just too steep. So I glean what I can, and so far it's been OK.
I like real high level macro stuff and make very few investing decisions each year, so they are a good match for me.
Anirivan Banerji occasionally posts an essay on
www.thestreet.com and it's made available to the free section in a timely manner. This is usually the best stuff as it gives a lot of background/context. He only posts 2 or 3 times a year.
These guys nailed the 2001 recession cold. In late 1999, spring 2000 they warned that the US economy was vulnerable to shocks, that the Fed had raised interest rates too far, and that the current spike in oil prices looked like it would shock the economy. It was just amazing to watch it unfold afterwards.
They proclaimed loudly last year that Katrina and Rita would NOT cause problems for the US economy, and they were right on the money. It was a good investing opportunity.
Right now they are forecasting a definite slowdown (and prolonged), but don't yet see a recession (and don't feel one is imminent). They are forecasting heightened inflation pressures, but that inflation pressures have eased somewhat. They say too early to tell which way inflation will go. It's certainly not out of control or anything, but still elevated.
Their outlook colors my macro view more than anyone else and I usually act on it when I do my occasional rebalancing or when I have some extra cash to put to work. For example, if the market is ramping up, but ECRI says a slowdown is imminent, I get much more conservative in my investing. Conversely, if the market is selling off in anticipation of a recession, but ECRI says not to expect one, I know it's a great buying opportunity.
They've been forecasting the slowdown for quite a while and that inflation pressures had already peaked (for the near future - although they are starting to creep up again). For that reason, this spring when bonds sold off really bad, after waiting almost two years I felt safe bringing my bond allocation up to where is should be for the long term. So far (knock on wood) that's been a winning move.
I'm now hoping the market will get scared about a recession soon so that I can have another equity buying (rebalancing) opportunity.
Right now it doesn't seem as if the market is taking this slowdown very seriously. The bond market sure is, but the stock market hasn't sold off like you would expect. At some point the stock market is very likely to catch the flu - I guess it's just a matter of waiting.
The fact that ECRI can only "see" out 6 months is important to understand. Any prediction they issue means "within the next 6 months". The world might change completely 12 months out, etc.
Well, anyway, I hope these are some good real world examples from me.
Audrey
Interestingly, he admits that he is a terrible timer, even as he makes his timing recommendations.
