Skip to comments.John Hussman: It's Official, The Data Says Another Recession Is Coming
Posted on 06/28/2010 10:47:11 AM PDT by blam
John Hussman: It's Official, The Data Says Another Recession Is Coming
Jun. 28, 2010, 12:48 PM
Fund manager John Hussman (via PragCap), who's been bearish for awhile, says it's now clear that a double-dip is coming.
Based on evidence that has always and only been observed during or immediately prior to U.S. recessions, the U.S. economy appears headed into a second leg of an unusually challenging downturn.
A few weeks ago, I noted that our recession warning composite was on the brink of a signal that has always and only occurred during or immediately prior to U.S. recessions, the last signal being the warning I reported in the November 12, 2007 weekly comment Expecting A Recession. While the set of criteria I noted then would still require a decline in the ISM Purchasing Managers Index to 54 or less to complete a recession warning, what prompts my immediate concern is that the growth rate of the ECRI Weekly Leading Index has now declined to -6.9%. The WLI growth rate has historically demonstrated a strong correlation with the ISM Purchasing Managers Index, with the correlation being highest at a lead time of 13 weeks.
Taking the growth rate of the WLI as a single indicator, the only instance when a level of -6.9% was not associated with an actual recession was a single observation in 1988. But as I've long noted, recession evidence is best taken as a syndrome of multiple conditions, including the behavior of the yield curve, credit spreads, stock prices, and employment growth. Given that the WLI growth rate leads the PMI by about 13 weeks, I substituted the WLI growth rate for the PMI criterion in condition 4 of our recession warning composite.
(Excerpt) Read more at businessinsider.com ...
KRUGMAN:"WAAAAAaaaaa!!! Keep spending money....WAAAAaaaa...That's it, if you don't keep spending money I'm going to go home and write an article that tells of the coming depression...."
Thank you for posting. I’ve been a fan of John Hussman for many years. My idea of a good time, sadly, is reading this lengthy piece. :)
“a double-dip is coming.”....
Thanks to the Double-Dip in the White House!...
Its clear from the chart that we need more debt, said Mr. Skittles.
Paul Krugman takes it where the sun never shines.
Batten down the hatches! Taxes a plenty next year.
Bush’s fault, obviously.
Methinks we’ve been in a recession a lot longer than the White House wants to admit.
Of course, it’s all Bush’s fault.
A lot of unemployed people would be surprised to discover that we’ve bubbled out of the recession we are dipping back into, and soon they will have more company to share their grief.
This is unexpected...
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