In response to a question about the recent modest data improvement, Lakshman Achuthan sent this video from 2008 (comments are not his, but one of his readers):
The ECRI made it’s last recession call in March 2008,when the S&P was somewhere around 1300.
The following interview occurred on 4/2/08 after the market shot up and some thought the economy was showing signs of recovery. The market made it up to 1426 by 5/20 before it fell and then kept falling to 1251 PRE-LEHMAN and continued down to the 666 3/9/09 Low. As he notes a similar situation happened following their recession call in 2001. I’m not looking back at those numbers but we know the market didn’t bottom until late 2002 with a final retest on 3/10/2003 at S&P 800.
I don’t think there’s enough data to make a short term market prediction following an ECRI recession call. What I am very confident of is their recession calls have all been correct and the recession will lead to a new bear market and given all the complicating factors like Europe causing wild gyration in the market I’m content with what I’m confident of which is we will be in recession and will be in a bear and that should start playing out between now and the next few months. Since I don’t know when we’ll turn down into a bear, it could be tomorrow or a couple of months from now, I want to be out of the way.
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A look ahead of todays trading, with Lakshman Acuthan, Economic Cycle Research and David Joy, Riversource Investments
Date: 4/2/08
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