- by New Deal democrat
I haven't had the time to post my beta testing in the last few weeks, but I did want to note before the time of its release that I expect this week's WLI to be significantly negative. Only one component - corporate bond prices - increased. Everything else - credit spreads, real M2, initial jobless claims, the JoC ECRI commodities index, the S&P 500, and purchase mortgage applications - decreased.
That being said, the WLI growth index may increase anyway, since last April the index was beginning a sharp decline, so a lesser rate of decline this week may be recorded as a net positive, and also because the general trend for the last few months in the weekly data has been positive, and this is apparently especially weighted in the growth index.
Wednesday Watch
1 hour ago
1 comment:
You were correct on the ECRI WLI.
My interpretation of the ECRI call on the recession is that the data last year was skewed by Greek crisis which impacted the underlying data which they based their call on. When the Greek debt crisis was "resolved" and LTRO came in the numbers changed courses. Lachtman fell for the inital fake out and made his recession call which does not look like it is on target.
The recent decline in the WLI is now about the Spain crisis. We know the playbook, more LTRO, ECB purchases and now the IMF & G20 are putting up more funds.
American consumer confidence is much less concerned about Spain & Italy debt woes.
Retail sales this month were awesome. The GDI (Gross Domestic Income) figures will show much stronger growth and GDP revisions and estimates will go to the upside.
Yes there will be minor disappointments along the way, but 3% GDP for the year is possible and in my opinion more feasible than the their recession call. And anywhere above 2% is most probable.
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