Here is the video of Lakshman Achuthan(no change in recession call):
http://video.cnbc.com/gallery/?video=3000055854
yes. and nothing that has transpired changes our view. we forecast recessions and nothing that has transpired in the interim has changed our view. what indicators are you looking at? the same ones that we always do. give us one that shows -- weekly leading index, it's at a highly negative growth rate. however it's not jus one index. this is not a precise science. it's the contagion among the forward looking indicators. the big drivers of the economy ar are profits, confidence, credit and inventories and all of thieves different things. things you're talking about. but what's undeniable is the contagion in the forward looking indicators. that has not changed. and the consensus which disagreed with us last spring when we said that there was a cyclical slowdown, they said it would be a temporary soft patch, they came around and then some to our view by the fall and now they've diverged again. and when you're talking about something cyclical, which is something i'd like to talk aboue likely resolved by consensus coming around to our view. a lot of people got happy let's say over gdp numbers. first to be clear in september when we made our call, we knew that you would have a couple percent growth and we made the call anyway. why some because we also know that in the past century, i'm not talking anything short lived, in the past century, the vast majority of all recessions have begun in a quarter that showed positive gdp growth. you're looking in to your caldron and you're turning it around -- it's not that mmystical. why don't the other street banks, street economists, see these same indicators? the technical reason is because they're looking at models. they're looking at they have physics and they're looking at models that are fitting the data, including gdp and retail sales. kind of like the cockroach theory. but what's in your -- it doesn't matter. i don't get that. i'm afraid you speak to too much economists because what you're looking for is some specific ingredient -- we've had retail sales doing better, the jobs numbers are not rolling over. coincident. hang on, steve. you have to finish -- it's the contagion in the forward looking index. it means it's a pervasive decline, it's not simply one thing. but give me one thing. is it the jobless claims number? i'm not going to give you -- this is not the point. you're missing the forest for the trees. it is the contagion among the forward looking -- is there lime oil? stop. you don't want to hear it, so you're -- the last day you were here was on the last day of september. can we get a chart of the s&p for the past month? i just want to show it because clearly the market has gone the exact opposite direction. which is normal. let's assume you are correct. look at '08, 01 ['01, same t happened. if you are correct, my question is what is the market already baking in and where is the market going? give us a real prediction. i'm not going to make a market prediction, but i will answer 90% of what you want. the market is looking at coincident and maybe at best short leading indicators. and betting everything on that. so when you have -- so they're good at now casting. now casting is not how you forecast a recession. you have to look at forward looking indicators, not gdp which is in the rear view mirror. in august of 2008, we're over and i had months inside of a recession, and the latest vintage of gdp data shows no negative gdp behind you and then you get gdp data to -- if i'm an investor listening to you talk, i'm supposed to believe that the market will go where and when? down? if it's in a recession, it's going down. i understand that, but the question is -- way down. now you're dealing with the psychology component of economics where it's difficult to know as a group. how quick are we going recognize stuff? on age, it's about six months inside of a recession that people realize there's a recession. in the last recession, it didn't happen until lee plan hit people on top of the head that they actually realized it. when gdp came out in august, you had negative q4. nobody cared. the market went up 200 points on that day. i'm just telling you that the market -- we still don't know original recipe colonel sanders. and we'll never know. or the recipe for coke. so it's impossible. we got go. the music is playing. thanks a lot. s |
