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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: Paul Shread who wrote (14309)	8/17/2002 3:45:30 PM
From: Killswitch	Respond to of 19219

Yes... more comments from Bob. The problem may be that the guy they had on CNBC was Mr. Achuthan, while I think the guy that does the research reports is Anirvan Banerji. "Well, just like when the "first" recession started, ECRI is changing their "no double-dip" tune just before it becomes obvious - see their latest commentary below. It will be interesting to see how Lakshman Achuthan changes his mind this time (explained further below in the reposting of my last week's post for background on this point)." ... "Yesterday, at 11:57 AM EST in a CNBC interview, Lakshman Achuthan said in part, "...mortgage applications for new purchases - they're soaring!" This is factually wrong, as the they are more than 8% below their previous month's high, but it reflects - as I've pointed out before - how the keeper of data often get it wrong. Although Achuthan is the managing director for ECRI, he's not nearly as experienced or analytically proficient as their director of research, Anirvan Banerji, who was the co-director of research for many years with the now deceased ECRI founder and 30-year leader at the National Bureau of Economic Research, Geoffrey Moore. Moore, along with his predecessor as head of the Bureau of Labor Statistics, Julius Shiskin, developed the leading, coincident and lagging economic indicators, and individual diffusion indices, that the Commerce Department ultimately adopted as their own. Nice guy that Achuthan may be, he is not in their business cycle analysis league. I bring this analysis competency issue up because Achuthan is seeking the attention of being the leader of the no-second-dip economic thesis that is - on a fundamental basis- partially driving this summer rally, along with the possibility of the Fed lowering rates next Tuesday, which is only two more business days from now. Achuthan is too interested in publicity, and not sufficiently interested in getting the analysis right, which may be appropriate from a marketing point of view, but caveat emptor. In yesterday's CNBC interview, Achuthan said that the latest recession is "just like" the brief and mild one in 1990-1. No, it certainly is not, and anyone drawing that parallel is not a very competent business cycle analyst, even if he's the managing director of ECRI. For example, look at our second attached .gif file chart and see the obvious time series pattern distinctions in the WLI, then and now. See the complete retracement and new high in 1991 before pulling back slightly versus only a partial retracement and sharper reversal today, especially when their index is corrected for ignoring the NASDAQ. He commented that the two recessions retracement, or stall, patterns were very similar. No, they certainly are not. And this doesn't even consider technical and fundamental analysis of the inter- and intra-component indicators, which much be thoroughly understood to effectively use an otherwise very simple tool. Of course, his biggest obstacle for getting it right is his lack of understanding of the K-cycle influences, or what we have quantified as BAAC Supercycle periods, the deflationary bear market periods of which, always include more complex and severe recessions."