Comments on: ECRI WLI: Slowdown or double-dip recession?

By: ERCI leading indicator: The debate continues … | FavStocks

ERCI leading indicator: The debate continues … | FavStocks — Mon, 02 Aug 2010 09:54:35 +0000

[...] 08/02/2010 – 2:54 am PDTLeave a Comment I have had numerous comments on my previous article ECRI WLI: Slowdown or double-dip recession. They all centred on the [...]

By: Georg Vrba

Georg Vrba — Fri, 30 Jul 2010 19:13:02 +0000

You suggest in this article that the ECRI WLI is correlated to the Yield on US 10-year note. There is absolutely no correlation before 1998. In fact they diverge from each other. The yield line has on average a downward slope, whereas the WLI has an upward slope similar to the S&P500 index. I found that your article conveyed no useful information.

It is naive to suggest that just because the WLIgrowth has declined to a certain level that a recession is imminent. The present very steep yield curve between the 2- and 10 year yields is at a level never seen in the period from 1965 to now and does not support a recession prediction. Obviously more information is required to make a recession prediction which the ECRI has done admirably well in the past.

By: James C.

James C. — Tue, 27 Jul 2010 14:34:43 +0000

“THE ECRI HAS NEVER BEEN HERE WITHOUT AN ENSUING RECESSION”
Chart of Gluskin-Sheff’s David Rosenberg
http://i30.tinypic.com/351664p.png

ECRI: Is It Really Different This Time?
http://seekingalpha.com/article/216468-ecri-is-it-really-different-this-time

By: Prieur du Plessis

Prieur du Plessis — Tue, 27 Jul 2010 06:54:28 +0000

@ James: I said “… it can be expected that the smoothed annualized growth rate of the ECRI WLI will also lead the 52-week percentage change of the S&P 500.” My 7th graph looks almost identical to yours.

By: Frank Wick@fastmail.net

Frank Wick@fastmail.net — Tue, 27 Jul 2010 01:41:22 +0000

After examining the charts, it appears to me that the ECRI WLI does what most investors think it does, namely lead the S&P 500 by a significant period of time. I found this article to be very informative and useful.

By: James C.

James C. — Tue, 27 Jul 2010 00:23:32 +0000

Actually, ECRI is leading the S&P (your charts incorrectly show the two as coincident, but in fact ECRI is leading S&P)
http://i32.tinypic.com/16090d1.png

By: David

David — Mon, 26 Jul 2010 12:07:28 +0000

Great article. Many thanks.

There is mention of the ‘U.S. Long Leading Index’. Is it worth an article on this too?

By: Harvan

Harvan — Mon, 26 Jul 2010 10:30:25 +0000

A significant number of pundits focus on the ECRI Weekly Leading Index (WLI) in their quest to make sense of the stock market’s most likely direction, whereas some advisors and economists are highly critical of the measure.

Actually a significant number of perma bears bolggers focus on ECRI. Last invention for bearish cam. Never heard of ECRI, now it’s all over the place.

Go DJIA GO S&P.