Confusing Weekly Data with Long Term Predictions

Today's email from Jas Jain is critical of ECRI ( The Economic Cycle Research Institute), a New York-based independent forecasting group. Jas seems to have trouble distinguishing between comments on weekly changes and long term forecasts.

-------- Original Message --------
Subject: ECRI’s Unrelenting Mantra of “stronger housing activity” During 07/06/07-11/16/07
Date: Fri, 28 Dec 2007
From: Jas Jain

ECRI’s Unrelenting Mantra of “stronger housing activity” During 07/06/07-11/16/07

Nov 16, 2007: “The effect of higher rates and jobless claims was partially offset by stronger housing activity and higher stock prices, said Lakshman Achuthan, managing director at ECRI.”

"NEW YORK, Sept 14 (Reuters) - A weekly gauge of future U.S. economic growth edged up due to higher stock prices, lower interest rates and stronger housing activity..."

"NEW YORK, Aug 10 (Reuters)...The fall in the index was partly offset by stronger housing activity, Achuthan said."

“NEW YORK, July 13 (Reuters) - A gauge of future U.S. economic growth rose in the latest week due to measures of stronger housing activity, lower jobless claims and higher stock prices…”

“NEW YORK, July 6 (Reuters) - A gauge of future U.S. economic growth edged up in the latest week due to lower interest rates and stronger housing activity…”

Talk about clueless economists, or dismal scientists. Where they blind to the reality or were they purposely misleading the public?

Jas

It is clear to me ECRI was commenting on what changed over the prior week that caused the weekly index to go up or down. Sadly, this seems completely lost on Jas Jain who has been wrong predicting a depression for the last decade while ECRI has been correct with its predictions on recessions for nearly 20 years that I have data for.

ECRI WLI Growth Rate Falls to Negative 5.2%

Today Jas Jain once again rings the recession bell while being critical of ECRI for saying a recession is still not inevitable.

-------- Original Message --------
Subject: ECRI’s WLI Growth Rate, -5.2%, Falls In the ECRI’s Recession Range of –5% to –6%
Date: Fri, 28 Dec 2007
From: Jas Jain

December 28, 2007 : ECRI’s WLI Growth Rate, -5.2%, Falls In the ECRI’s Recession Range of –5% to –6%

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.”

Latest Data (December 28, 2007):

Weekly Leading Index 135.2 -5.2

So, “the ECRI leading U.S. index's growth rate” has fallen below 5%. One wonders why the ECRI econ-meisters are not issuing the recession forecast now that the data is screaming recession. My analysis of the long-term behavior of the WLI confirms a recession that will end up in depression.

Jas

Jas, obviously there is more to their forecast than the raw numbers. Here is the ECRI press release from today.

Weekly Leading Index Falls (but no recession call)

NEW YORK, Dec 28 (Reuters) - A weekly gauge of future U.S. economic growth fell due to higher jobless claims and lower stock prices, as its annualized growth rate hit a five-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 fell to 135.2 in the week of Dec. 21 from 136.2 in the prior week.

The negative effect of higher claims for unemployment benefits and weaker equities was partially offset by lower interest rates, said Lakshman Achuthan, managing director at ECRI.

WLI annualized growth rate fell to minus 5.2 percent from minus 4.8 percent. It was last that low on Nov. 1, 2002, according to ECRI data.

"With Weekly Leading Index growth fast approaching its worst reading since the 2001 recession, the U.S. growth outlook continues to deteriorate. Nevertheless, it is still premature to predict a recession," Achuthan said.

Jas, you should join our facebook ECRI forum so you can ask questions of Lakshman directly. You have to admit ECRI has been accurate while you have not with your constant calls for a depression.

Request Invitation to FREE facebook discussion group "Investing for the Long Term."

ECRI Further Confirms My recession Call; Shilling and Gross Join

Jas Claims Bill Gross and Gary Shilling now join him in a recession call.

-------- Original Message --------
Subject: ECRI Further Confirms My recession Call; Shilling and Gross Join
Date: Fri, 21 Dec 2007 08:27:03 -0800
From: Jas Jain

December 21, 2007

ECRI Further Confirms My recession Call; (Gary) Shilling and (Bill) Gross Join

ECRI’s Weekly Leading Indicator (WLI):

Date Index WLI
. Level Growth

23-Apr-04 136.0 +9.4
8-Jun-07 143.7 +6.7
14-Dec-07 136.1 -4.8

Please note that WLI is a growing series, over time, like the real GDP. For the index to be at the same level as 3.6 years ago is extremely negative, almost forecasting a depression rather than a recession. Also, note the two growth rates when index was at the same levels. Please don’t expect the econ-meisters at ECRI to forecast a recession until several months into the recession. Their evasive and vague language is the best proof of their motive. They have never heard of the term probability (have never used it in connection with recession).

Bill Gross and Gary Shilling also say that the economy is in recession. In recessions forecasting there are few leaders and lots of followers among the economists. Economists suffer from the herd mentality more than most professionals. They feel secure in the herd!

Jas--

Morgan Stanley David Dorsch Says Q1 and Q2 to Have Negative GDP Growth

-------- Original Message --------
Subject: Morgan Stanley Chief Strategist Says Q1 and Q2 to Have Negative GDP Growth & More
Date: Mon, 17 Dec 2007 04:34:41 -0800
From: Jas Jain

December 17, 2007

Morgan Stanley Chief Strategist Says Q1 and Q2 to Have Negative GDP Growth

David Dorsch (sp?) appeared on Boob-berg early this morning. He said that we would have a recession during the first half of 2008. I am assuming that he is reflecting the conclusion of MS Chief Economist. If one of the top Wall Street firm sees recession to begin in 2008Q1 we can be fairly confident that the recession has already begun during 2007Q4. Also, David Rosenberg of Merrill Lynch more or less says that the recession is here. Another Wall Streeter appeared on Boob-berg who said that his firm is not calling for a recession but he sees one.

ECRI weekly data (and not the ECRI econ-meisters) also confirm my recession call (thanks, Bruce):

Weekly Leading Index 138.0 -3.8 7 Dec 2007

Confirmations for recession just keep on coming, even from Wall Street.

Jas--

Abby Joseph Coen's New S&P Earnings Estimate

Jas Jain sent this email comment about Abby Joseph Coen's S&P500 earnings estimate for 2008.

Original Message --------
Subject: Wealth Street’s Unholy Cow Cuts Earnings Estimates and Moves SPX Targets
Date: Tue, 4 Dec 2007 06:33:59
From: Jas Jain

December 04, 2007

Wealth Street’s Unholy Cow Cuts Earnings Estimates and Moves SPX Targets

Abby Joseph Cow, unholy cow employed by the un-holiest of firms, Goldchain Silverknife, cut her earnings estimates on S&P 500. Only 3-4 months ago she had raised her S&P500 target for 2007 from 1,600 to 1,650. Now, she has raised S&P500 target to 1,675 but for “next year.” Recently, her firm cut Freddie Mac from $71 (the Scam peaked just below $70!) to $24 and within days raised to $27.

Still doubt that these people are “raised in a culture of fraud?” Deception and manipulation is their primary game plan with occasional fraud.

Her goal is to keep people into Scams all the time by promising 10-15 gains in a year. Thank God that she is a barren (unproductive) cow. She wouldn’t be raising fraudsters.

Jas

Someday Jas will learn to communicate without the name calling.

There Is a Bubble Forming In the [US Treasury] Bond Market!

Jas Jain writes:

Subject: “There Is a Bubble Forming In the [US Treasury] Bond Market”!
Date: Tue, 4 Dec 2007 06:52:07
From: Jas Jain
--

“There Is a Bubble Forming In the [US Treasury] Bond Market”!

That is the opinion of a boob on Boob-berg. These boobs can’t identify bubbles in Scams, or housing, but they can identify bubble in the bond market? Amazing.

Scam Lovers must get their daily dose of bull poop.

Jas

Jas doesn't hold back.

Predicts NASDAQ to Fall 50% (to 1319)

Subject: Alan Sinai: “We Will See Cutbacks In Technology... As Soon As Q4 and In 2008”
Date: Mon, 3 Dec 2007
From: Jas Jain

December 03, 2007

Alan Sinai: “We Will See Cutbacks In Technology & Computers “Without a Doubt” as Soon As Q4 and In 2008”

He appeared on Boob-berg. He was emphatic about companies cutting back on computers, etc., “without a doubt” in the face of weakening economy.

The economy is in recession already and NASTYQ! will go down more than 50% within a year.

Jas

Today the NASDAQ closed at 2,637.13