Well, Larry doesn't always get it right like the Conference Board does. Which brings us to the big battle of the two major leading indicators, the Conference Board's LEI and the Economic Cycle Research Institute or ECRI. These two have been like two peas in a pod through past economic cycles even though their methods are not the same. But since 2008, they have sharply diverged to the point where ECRI's Lakshman Achuthan has been predicting a new recession since September. I have a theory as to why these two trustworthy indexes have gone their separate ways. I wrote an article on it back on August 22, 2011 "Is 'Zero Hour' Debt Saturation Upon Us?"
Let's look at a map of these two indexes consisting of the debt saturation chart of Marc Faber superimposed on an LEI/ECRI side-by-side comparison from "The Great Leading Indicator Smackdown: New Update" by Doug Short (with some notes added):
The marvelous track record of these two indexes is readily apparent. They both establish pretty clear trends out of a recession, and when they turn out of those trends, you are within a few months of a new recession. Why have they gone separate ways since '08? The make-up of the ECRI index is proprietary, but I think it is simply that the LEI factors in monetary policy much more heavily than the ECRI.
http://seekingalpha....omic-indicators
 0
No replies to this topic
0 user(s) are reading this topic0 members, 0 guests, 0 anonymous users |
|
