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  • normlasky normlasky Jan 7, 2012 9:23 AM Flag

    BBT over $30 by end of January ?

    "I think you are smoking something."

    Do you still use ecri as the "bible" for economic forecasting?

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    • Check the Baltic Dry Index - real transactions, real money (not easily manipulated) and tell us what it is telling you. Tell me what the GDI is telling you (it is in the same report as GDP and supposedly measures the same thing). Why the divergence?

      I see that the LEI is being revised (first time since 1996). Makes you say hmmmmm.... The average lead time for the ECRI is about 26 weeks (maybe a little more).

      I look at lots of things and a lot of them like soaring government debt, Europe, slowing emerging markets (ie India) all cast a negative shadow over the economy. Gotta wonder how flat corporate earings projections for 2012 will play out.

      Or if you prefer TA how about the Juglar and Kitchin cycles both down together the first time since 2008-2009.

      I could go on, but just a few of the things I look at.

      • 1 Reply to inlet_boater
      • The baltic dry index has been pounded by the big increase in the supply of new ships. If you want to look at freight volumes, check out the freight stats published by the American Association of Railroads. Both car loads and container volume are up significantly and have been accelerating in the 4th qtr. Recent monthly data shows that freight ton miles are up around 5% vs. last year. Big increase.

        Secondly, gdp and gdi are approximately equivalent. Personal disposable income has trailed gdp because tax payments have increased substantially. One powerful driver of the economy is the big surge in rental income which has increased as I recall by $250 billion or around 170% over last couple of years.

        Yes, there are headwinds but I don't think they're going to upset the general trend going forward. Once construction comes back, there will be a big surge in employment - many millions of new jobs driving unemployment towards a normal level.

        The best data available on our economy is info published by the Federal Reserve - their funds flow data imo provides a great source of general economic trends.

        Imo, the ECRI projections contradict the general economic trends published by the Fed. Do not believe they are a credible source.

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