Investment

» Jas_Jain - How ECRI econ-meisters got totally bamboozled by BAD Data

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Mortgage Applications data is very important component of ECRI's WLI.

Refi apps down from 2879.8 to 1620.9 (down 43.7%) in three weeks! Purchase index down from 472 to 360.8 (down 23.6%) in the same period. The numbers are seasonally adjusted.

All those bad inflated data of Jun-Nov last year are getting corrected. ECRI econ-meisters got totally bamboozled by the bad data when it talked of "stronger housing activity" for the period.

Expect a very bad WLI number tomorrow!

Jas
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http://www.mortgagebankers.org/NewsandMe...

WASHINGTON, D.C. (January 3, 2007) - The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the Christmas holiday shortened week ending December 28, 2007. The Market Composite Index, a measure of mortgage loan application volume, was 533.9, a decrease of 11.6 percent on a seasonally adjusted basis from 603.8 one week earlier. On an unadjusted basis, the Index decreased 47.2 percent compared with the previous week and was down 20 percent compared with the same week one year earlier.
The Refinance Index decreased 15.4 percent to 1620.9 from 1915.3 the previous week and the seasonally adjusted Purchase Index decreased 8.5 percent to 360.8 from 394.5 one week earlier. On an unadjusted basis, the Purchase Index decreased 44.9 percent to 161.2 from 292.3 the previous week. The seasonally adjusted Conventional Index decreased 11.8 percent to 757.4 from 859.1 the previous week, and the seasonally adjusted Government Index decreased 9.6 percent to 161.1 from 178.3 the previous week.

-- posted by Jas_Jain

» Jas_Jain - The Latest ECRI’s WLI Flashing RED

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The latest WLI Data (thanks, Bruce):

Weekly Leading Index 135.1 -6.2 28 Dec 2007

December 24, 2007 press release from ECRI: "The ECRI leading U.S. index's growth rate has hit a 5-year low of -4.8%. Typically a -5% to -6% reading is needed for a recession."

For once and all we shall find out if Lakshman Achuthan of ECRI means what he says if he does not make a recession call based on the latest data (he has claimed countless times that ECRI will forecast recession 6-8 months ahead of time).
Here is what I sent out an hour before I got the data:

Can't Wait For the ECRI's WLI Data For the Week
I expect a very bad report with "growth" rate below the last week and most likely below -6%.
It is going to be very interesting how the bubble-meister Lakshman Achuthan spins this. He wins my E-Con-Turkey award for 2007. His cult followers will, of course, deny recession until the cult leader has no choice but to admit the recession months after it began. The turkey made the leading indicator into a lagging indicator by not figuring out that the "stronger housing activity" was based on KNOWN bad data. But, he stuck to bad data to give a bullish outlook. Amazing.

Jas

-- posted by Jas_Jain

» permabear - The Latest ECRI’s WLI Flashing RED

In response to The Latest ECRI’s WLI Flashing RED posted by Jas_Jain:

Agreed Jas. If Lakshman is true to his numbers and the data, I don't see how he avoids making the recession call. On Bloomberg as was pointed out already, Lakshman says that he is either bullish or bearish, no in between. Up to now he's been upbeat on the economy. With today's data, along with other economic data, leading his indicators into his own defined recession territory, let's see if he pulls the trigger on the recession call.

-- posted by permabear

» Jas_Jain - The Latest ECRI’s WLI Flashing RED

In response to The Latest ECRI’s WLI Flashing RED posted by permabear:

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Thanks, Perma, for keeping to the truth and not getting bamboozled by bubble-meisters.

"let's see if he pulls the trigger on the recession call."

Don't hold your breath! He is a sacrificial lamb to serve the interests of the rich and powerful. He has already collected his rewards for being bullish as long as possible. During depression no one will pay any attention to LA because his cult followers, Kirk & Co., will leave him.

Cycles are all about human behavior. Propagandists have their role in our system. They can't worry about truth or their reputation.

Jas

-- posted by Jas_Jain

» cpa61 - The Latest ECRI’s WLI Flashing RED

In response to The Latest ECRI’s WLI Flashing RED posted by Jas_Jain:

we gotta shift from are we in one to how long and deep will it be. i see 30-40% stock decline over several years?

-- posted by cpa61

» dr_mohan - The Latest ECRI’s WLI Flashing RED

In response to The Latest ECRI’s WLI Flashing RED posted by Jas_Jain:

Sorry Jas, Mr Achuthan stated that the recession could still be averted as the weakness in the components is not pervasive. Read it here http://www.reuters.com/article/bondsNews...

GDP did not shrink in last quarter. Looks like economy may not shrink in the first quarter.

-- posted by dr_mohan

» Jas_Jain - FWC: US leading index growth rate lowest since 2001 recession-EC

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We know that next week's WLI, for period ending January 04, 2008, will be much worse than the one released today for the period ending in December 28, 2007. The Scam market performance this week alone will take the index down big next week. The only wildcard is Mortgage Applications that have been plagued by very bad data for the past 8 moths.

Bubble-meister Achuthan of ECRI has already equivocated. Therefore, his comments on recession are worthless. My analysis of long-term WLI not only confirms that recession had already begun but that the depression is highly likely.

Jas

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http://www.reuters.com/article/bondsNews...

US leading index growth rate lowest since 2001 recession-ECRI

NEW YORK, Jan 4 (Reuters) - A weekly gauge of future U.S. economic growth rose slightly, bolstered by higher industrial commodity prices and lower jobless claims, but its annualized growth rate continued to fall and is now at a more than six-year low, a research group said on Friday.
The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index inched up to to 135.1 in the week of Dec. 28 from 135.0 in the prior week, revised from 135.2.
The positive effect of higher industrial commodity prices and lower jobless claims was almost fully offset by weaker housing activity, said Lakshman Achuthan, managing director at ECRI.
WLI annualized growth rate fell to minus 6.2 percent from minus 5.2 percent. It was last that low on Nov. 16, 2001, when it hit negative 7.1 percent according to ECRI data.
"WLI growth is now at its worst reading since the 2001 recession. However, the WLI's recent decline is not based on pervasive weakness among its components, suggesting that a recession could still be averted," Achuthan said. (Reporting by Rodrigo Campos; Editing by Theodore d'Afflisio)

-- posted by Jas_Jain

» Jas_Jain - Re: The Latest ECRI’s WLI Flashing RED

In response to The Latest ECRI’s WLI Flashing RED posted by dr_mohan:

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Hello Dr. Mohan,

2007Q4 WILL have negative growth and 2007Q4-2008Q1 combined WILL also have negative growth. That satisfies the historical criterion for a recession.

Now we have to wait for the end of the February to get the preliminary reading on 2007Q4 GDP reading (the advanced that is released in January is subject to big revisions).

Best regards,

Jas

-- posted by Jas_Jain

» permabear - The Latest ECRI’s WLI Flashing RED

In response to The Latest ECRI's WLI Flashing RED posted by dr_mohan:

For as long as I've been reading these boards and seeing Lakshman on CNBC and Bloomberg, the guy has always had a positive take on things. As I've pointed out before, everyone has a bias. When you watch the financial media, you can almost always predict which way some analyst is going to come out based on previous analyses. My bias as a permabear is very obvious and I'm the first to admit it. Some common analysts like Jason Trenert and Larry Kudlow are hyper permabulls. And folks like Garry Shilling and Herb Greenberg always seem to take the glass is half empty view. I put Lakshman in with the permabulls. He's always put the positive spin on developments, especially in the past year and a half as the housing and credit crisis has evolved. All along he's downplayed the severity of the housing crisis and the effects on the larger economy. Well I believe that the chickens are coming home to roost now as the housing market is clearly having a profound effect on the economy, beginning with the credit market and the banks and now passing on to retail sales and employment.

-- posted by permabear

» Jas_Jain - Re: The Latest ECRI’s WLI Flashing RED

In response to The Latest ECRI’s WLI Flashing RED posted by permabear:

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Right, Perma.

The soap opera continues.

On 12/24/07 Bubble-meister Achuthan said: "Typically a -5% to -6% reading [in WLI growth rate] is needed for a recession."

The growth rate today, for period ending 12/28/07 was -6.2%.

Few days ago Bubble-meister Achuthan said on Bloomberg: "We only make forecast of recession being highly unlikely or very likely," but today he said "that a recession could still be averted." So, he is making a different forecast than the ones he claimed he makes. Funny part is he has made some 40 different forecasts for the economy! It is impossible to tell the truth when one is in propaganda business. Keep changing the language to create ambiguity? In other cases keep repeating the same thing, usually a lie. Propagandist have many tools to draw from.

THERE IS LESS AND LESS ROOM FOR LAKSHMAN TO MANEUVER! He has been cornered and he will be caught.

Jas

-- posted by Jas_Jain