Lakshman Achuthan of the ECRI has been ticking people off with his unwavering call for the mother of all recessions just around the corner.
Particularly frustrating is that on Sep 30 when Achuthan first publicly unveiled his recession call, he stated that the ECRI's publicly published Weekly Leading Index (WLI) was unequivocally predicting a recession.
But more recently when the WLI began turning up, Achuthan seemed to hedge that call -- explaining that in reality it is strictly the ECRI's "paying customers only" US Long Leading Index that is used to predict recessions.
Part of being a markets bull is tapping into the intrinsic quality of most humans to remain optimistic about the future. And when the breaking economic numbers seem to reinforce that optimism, it is difficult to not become emotional about those who declare it a false dawn.
However, as a trader/investor making an objective evaluation of reward/risk, it is crucial to keep in mind Achuthan's key point that in the midst of a cyclical downturn it is often the case that a short-cycle economic surge temporarily falsely masks-out longer-term decay series that are just reaching critical mass and which will in time produce severe malaise.
With the large majority of the world's bourses now clearly in bear markets, I for one am willing to give Lakshman and the ECRI some leash for awhile longer.
The ECRI doubters may in fact be reading from an ECRI script !
