Our Track Record

  • 1987Stock Market Crash & Rebound
  • 1990-1991Recession & Kuwait Invasion
  • 1994-1995The Fed & Orange County
  • 1999-2001Popping of Tech Bubble & Recession
  • 2005The Katrina Effect
  • 2006Home Price Bubble Pops
  • 2007-2009The Great Recession & Recovery
  • 2010No Double Dip
  • 2011Slowdown
  • 2012QEternity
 
  • Global Event

    October 19th

    Black Monday

    Stock market crashes, with Dow falling 22% in a day, triggering widespread recession fears.

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  • Global Event

    December 7th

    U.S. Long Leading Index rules out imminent recession

    Even with “more economists... saying that a recession either has recently begun or will do so within the next year”, our Long Leading Index correctly predicted continued growth, according to a story highlighted on the front page of The Wall Street Journal.

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  • Global Event

    Early 1990

    Recession forecast

    On February 6, 1990, Geoffrey H. Moore forecast a recession based on our leading indexes, which began that July. On March 9, 1990, The Wall Street Journal highlights that call: “Geoffrey Moore, who at 75 years of age has had a hand in declaring many modern recessions, noted the...[leading] employment index has begun signaling recession.”

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  • Global Event

    August - October 1990

    Iraq attacks Kuwait

    In retrospect, recession is widely blamed on accompanying oil price spike. NBER recession probability model fails to forecast it. Fed Chairman Greenspan says in August, “those who argue that we are already in a recession I think are reasonably certain to be wrong,” and in October, “[t]he economy has not yet slipped into a recession.”

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  • Global Event

    February 1991

    “Recession's End”

    Geoffrey H. Moore publicly calls the end of recession. That forecast was then featured in The New York Times. Recession ends in March, as officially recognized 21 months later by NBER.

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  • Global Event

    February 4, 1994

    Fed announces surprise rate hike

    Fed hikes rates the same day that we announce that our sharply rising leading inflation index “warns of higher U.S. inflation ahead.” Testifying to Congress, Fed Chairman Greenspan says “anything that Geoffrey Moore does I follow very closely, because he taught me Statistics 1 in college.” As our index keeps rising and the Fed keeps hiking rates the bond market suffers its worst year in history.

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  • Global Event

    December 1994

    Bankruptcy in CA

    Following the rate hikes, Orange County goes bankrupt, having invested in a leveraged portfolio of mostly interest-sensitive securities — a strategy dependent on short-term interest rates staying low.

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  • Global Event

    February 1995

    Fed Chairman Greenspan describes preemptive policy

    During Humphrey-Hawkins testimony on February 22, Fed Chairman Greenspan says, “[b]ecause the effects of monetary policy are felt only slowly and with a lag, policy will have a better chance of contributing to meeting the Nation's macroeconomic objectives if we look forward as we act... Thus, over the past year, we have firmed policy to head off inflation pressures not yet evident in the data. Similarly, there may come a time when we hold our policy stance unchanged, or even ease, despite adverse price data, should we see signs that underlying forces are acting ultimately to reduce inflation pressures.”

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  • Global Event

    April - July 1995

    Falling “inflation pressures”

    On April 10, 1995, we announce: “Leading Inflation Index Decreases Again.” On July 6 the Fed changes direction and announces a rate cut, stating: “As a result of the monetary tightening initiated in early 1994, inflationary pressures have receded enough to accommodate a modest adjustment in monetary conditions.”

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  • ECRI OUTLOOK

    June 1999

    ECRI predicts Japanese upturn — and warns of impact on U.S. growth

    ECRI identifies the Japanese recovery as a critical shift in the factors underlying the long U.S. expansion, noting: “it is critical to monitor [ECRI's Japanese Long Leading Index] as well as the USFIG (ECRI's U.S. Future Inflation Gauge), which is likely to provide the earliest reliable reading of any sharp increase in inflationary pressures.”

    Read June 1999 ECRI Outlook excerpted text

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  • ECRI OUTLOOK

    September 2000

    ECRI U.S. leading indicators closer to forecasting recession than any time in past decade

    ECRI warns of recession ahead: “the U.S. Leading Diffusion Index (USLDI) plunged to its lowest level in the current expansion... in eight out of the ten instances since 1950 in which the USLDI dipped this low, a recession followed.”

    Read September 2000 ECRI Outlook excerpted text

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  • Consensus View

    September - October 2000

    U.S. recession is distant

    “Sure, economic growth is slowing, but a recession? Forget about it, according to an index assembled by Economy.com, a forecasting firm.” — The Wall Street Journal, Sept. 2000

    “Dozens of analysts, economists, industry CEOs, and technology buyers say a general tech-industry meltdown is highly unlikely.” — Business Week, October 2000

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  • Global Event

    November 2000

    Fed maintains “tightening bias”

    FOMC statement still states: “the risks continue to be weighted mainly toward conditions that may generate heightened inflation pressures in the foreseeable future.”

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  • Global Event

    January 2001

    Fed starts slashing rates

    A month and a half after highlighting “inflation pressures” rather than “economic weakness” as the major risk in its official statement, the Fed starts cutting interest rates aggressively. But ECRI's leading indicators keep falling.

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  • CONSENSUS VIEW

    February 2001

    Latest U.S. economic readings are encouraging

    “[T]he latest readings are encouraging... [T]he Fed's growth projection implies a significant pickup in the second half. ... [C]onsumers are not retrenching in a way that could push the economy into a recession.” - Business Week, Feb. 2001

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  • ECRI Outlook

    March 2001

    ECRI declares: “Recession No Longer Avoidable”

    “The cyclical leading indicators monitored by ECRI are now collectively pointing to a business cycle recession in the U.S. economy.”

    Read March 2001 ECRI Outlook excerpted text

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  • Global Event

    March 2001

    Recession officially begins... largely unrecognized at the time

    “In a survey in March 2001, 95% of American economists said there would not be a recession. One of the few exceptions was the Economic Cycle Research Institute (ECRI), an independent research firm, which that same month correctly forecast, on the basis of its leading economic indicators, that a recession was unavoidable.” The Economist

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  • Global Event

    September 2001

    9/11 terrorist attacks

    Following the attacks, many acknowledge the recession. But, in fact, the recession had begun six months earlier in March 2001, as officially determined in November 2001.

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  • Consensus View

    February 2005

    “Slower Growth”

    “We are forecasting slower growth in 2005 for three reasons. First, our model for forecasting GDP tells us that the 2004 increases in both oil and fed funds will slow growth in 2005. Second, the yield curve's significant flattening suggests slower growth. And third, on balance, the economy seems to be slowing, e.g., real GDP, employment and the svc PMI.” - Major Wall Street firm, Feb. 2005

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  • Global Event

    August 2005

    Hurricane Katrina hits U.S.

    Several top economists now use the term “tipping point” to describe the state of the economy, in effect forecasting recession, as Fed rate hikes and “a massive oil shock” are followed by a major natural disaster.

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  • ECRI Outlook

    September 2005

    “A Shock-Resistant Economy”

    “[T]he drivers of the U.S. business cycle are still configured in a way that makes it difficult for Katrina or other near-term shocks to trigger a new recession.”

    Read September 2005 ECRI Outlook excerpted text

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  • ECRI Outlook

    April 2006

    “Housing Under Pressure”

    ECRI calls “The End of the Housing Boom,” even as markets remain upbeat about homebuilder stocks.

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  • Consensus View

    April 2006

    No housing collapse

    “Home sales unexpectedly rose and U.S. consumer confidence reached a four-year high, allaying concerns about a collapse in housing and pointing to sustained economic growth.” - Bloomberg News, Apr. 2006

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  • ECRI Outlook

    November - December 2007

    Mounting Recession Risks

    “The growing weakness in the growth rates of ECRI's leading indexes is a warning that recessionary weakness could develop. One key danger is a sustained credit crunch, because the credit crisis is clearly not over... [Our] Leading Index[es are] now approaching [their] worst reading[s] since the 2001 recession... Also, the breadth of deterioration evident in the latest data on the components of ECRI's many leading indexes has rarely been seen except near the cusp of a recession.”

    Read November-December 2007 ECRI Outlook excerpted text

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  • Consensus View

    December 2007

    A U.S. recession is unlikely

    “In its fourth quarterly report of 2007, the UCLA Anderson Forecast holds steadfast to the basic tenet of a forecast they have been making throughout the year, that the national economy is not technically in a recession, nor is there a national recession on the economic horizon.” - Business Wire, December 2007

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  • Global Event

    December 2007

    Recession officially begins

    The start of the recession in December 2007 was officially recognized a year later.

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  • ECRI Outlook

    January 2008

    “Self-Reinforcing Downturn Has Already Begun”

    “It is a fact that a self-reinforcing downturn has already begun. If allowed to continue, it will amount to the vicious cycle known as a business cycle recession.” - U.S. Cyclical Outlook, January 2008, Vol. XIII, No. 1

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  • Consensus View

    January 2008

    President Says Economy Will Keep Growing

    “This [stimulus] will keep our economy growing.” - President George W. Bush

    Read More

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  • Consensus View

    January 2008

    Bernanke Doesn't See Recession

    “[W]e're not forecasting recession” - Fed Chairman Bernanke

    Congressional Testimony Video (at two minute mark)

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  • ECRI Outlook

    March 2008

    “An Objective Approach Signals Recession”

    “The U.S. economy is finally set on a recessionary course. This is because recessionary weakness long evident in ECRI's leading indexes for the financial services and construction sectors has now seeped into our leading index for non-financial services, a sector accounting for 62% of jobs. In fact, deterioration in the leading indicators of the U.S. economy has recently become very widespread. It is important to understand that this was not inevitable.” - U.S. Cyclical Outlook, March 2008, Vol. XIII, No. 3

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  • Consensus View

    May 2008

    Not in Recession

    “The data are pretty clear that we are not in a recession… I would be very surprised if the NBER … would date this period as a recession.” - Edward Lazear, Chairman, White House Council of Economic Advisers

    Read More

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  • Consensus View

    June 2008

    Declining Risk of Downturn

    “[T]he risk that the economy has entered a substantial downturn appears to have diminished.” - Fed Chairman Bernanke

    Read More

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  • ECRI Outlook

    August 2008

    Pre-Lehman Forecast: “Worst Global Recession in Three Decades”

    “It has been a long time since the global economy was faced with such concerted contractions... In fact, this may be the most concerted global recession since the oil shocks of the mid-1970s and early 1980s. Even worse, according to the long leading indexes, there is no light yet at the end of the tunnel... In sum, we are on the cusp of the worst global recession in nearly three decades, with no end in sight.”

    Read August 2008 ECRI Outlook excerpted text

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  • Global Event

    September 2008

    Global financial crisis

    Lehman Brothers fails, setting off a global financial crisis.

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  • ECRI Outlook

    November 2008

    “Leading Indexes Fall Off a Cliff”

    “There has hardly ever been such a swift deterioration of an already downbeat economic outlook.” - U.S. Cyclical Outlook, November 2008, Vol. XIII, No. 11

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  • Global Event

    November 2008

    Fed announces $600 billion in MBS purchases

    In November 2008, soon after Warren Buffett declared that he was buying stocks, the Fed publicly announced its plan to buy $600 billion in Mortgage-Backed Securities (MBS).

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  • Global Event

    March 2009

    Buffett: Economy “Has Fallen Off a Cliff”

    During a CNBC interview Warren Buffett says that the economy “has fallen off a cliff.” A strikingly different tone than the one he struck a few months earlier in a New York Times op-ed titled, “Buy American. I Am,” concluding: “my money and my mouth both say equities.”

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  • ECRI Outlook

    March 2009

    U.S. Growth Rate Cycle Upturn Call

    “[Such upticks in leading index growth] have always been followed by a growth rate cycle upturn” - U.S. Cyclical Outlook, March 2009, Vol. XIV, No. 3

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  • ECRI Outlook

    April 2009

    ECRI calls end of recession by summer 2009

    “[T]he timing of the USLLI upturn, along with a nascent upturn in the WLI, suggests that the current recession will end in the second half of the year, probably by this summer...

    [Yet, as] A. C. Pigou [wrote] in 1920, 'The error of optimism dies in the crisis but in dying it “gives birth to an error of pessimism. This new error is born, not an infant, but a giant.'”... Following the latest crisis, the 'giant error of pessimism' is now rampant. This is why today many are skeptical that we have the first clear signs that the recession will end in the coming months.”

    Read April 2009 ECRI Outlook excerpted text

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  • Consensus View

    April 2009

    No reason to think that the recession will end in spring/summer

    “There's no reason to think that this recession is going to end any time this spring or this summer.” - Ken Goldstein, Conference Board, April 20, 2009

    Read More

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  • Global Event

    June 2009

    U.S. recession ends

    The June 2009 recession end date is officially recognized in September 2010.

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  • ECRI Outlook

    January 2010

    Deceleration in U.S. Growth

    “U.S. economic growth will begin to decelerate by mid-year.” - U.S. Cyclical Outlook, January 2010, Vol. XV, No. 1

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  • ECRI Outlook

    February 2010

    ECRI issues public warning of slowdown

    ECRI's U.S. “Long Leading Index... has a longer lead over the business cycle than equities, which are a short leading indicator, and in recent months its growth has been pulling back, pointing to slower growth in the economy starting ... by mid-year... [But] there's no double-dip imminent.”

    Watch CNBC Interview

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  • ECRI Outlook

    March 2010

    ECRI warns of global industrial slowdown

    “We are on the cusp of a new global industrial slowdown.”

    Read March 2010 ECRI Outlook excerpted text

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  • ECRI Outlook

    May 2010

    The Pain in Spain

    “[R]enewed weakness in ECRI’s Spanish leading indexes underscores the increasing vulnerability of the Spanish economy.”

    Read May 2010 ECRI Outlook excerpted text

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  • Global Event

    June 2010

    A Summer Revival?

    Administration Kicks Off “Recovery Summer”

    Read More

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  • ECRI Outlook

    June 2010

    Inflation Danger in Non-Japan Asia

    “With inflation a growing concern, [Chinese] policy makers will be forced to take stronger action – even though a global slowdown is taking hold.” In any case, “[w]ith growth in ECRI's Chinese Leading Home Price Index remaining in a clear cyclical downturn, the pace of home price inflation is likely to moderate in the months ahead.”

    Read June 2010 ECRI Outlook excerpted text

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  • Global Event

    June - October 2010

    Double-Dip Hysteria, Deflation Concerns

    “[W]e can safely say that this barometer [from ECRI] is now signaling an 80% chance of a double-dip recession... Keep your eye on the -10 threshold, for at that level, the economy has gone into recession... only 100% of the time.” - David Rosenberg, June 2010

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  • ECRI Outlook

    June - October 2010

    Pundits misconstrue ECRI's public data, ECRI rebuts misconceptions:

    “When there really is danger of an imminent recession, [we will signal it]. But that hasn't happened yet.”

    Read More

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  • ECRI Outlook

    July 2010

    Global industrial growth to turn up by year-end

    “[G]lobal industrial growth will [turn up]…, possibly around the end of 2010 or early 2011. [Thus,] a reacceleration in global industrial growth may well begin in a couple of quarters.” - International Cyclical Outlook, July 2010, Vol. XV, No. 7

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  • Global Event

    August 2010

    Bernanke announces QE2 at Jackson Hole

    At the end of August 2010, Chairman Bernanke belatedly announced a second round of QE (QE2) at Jackson Hole.

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  • ECRI Outlook

    October 2010

    Veering Away From Recession Track

    The U.S. “is unmistakably veering away from the recession track.”

    Read October 2010 ECRI Outlook excerpted text

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  • ECRI Outlook

    January 2011

    Clouds gather on horizon

    “Global industrial growth is likely to start slowing by summer.”

    Read January 2011 ECRI Outlook excerpted text

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  • ECRI Outlook

    February 2011

    Inflation Cycle Risks in China, India and Western Economies

    “The recent rise in international inflation is being driven increasingly by more than food and energy. This is the message from a set of alternative future inflation gauges not only for the major Western economies, but also for India and China.

    [The Chinese future inflation gauge] still suggests that Chinese inflation will stay in a cyclical upswing for the time being.”

    Read February 2011 ECRI Outlook excerpted text

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  • ECRI Outlook

    March 2011

    Youth Unemployment to Surge

    “The global recession's harshest legacy may be the staggering level of youth unemployment in most developed economies.

    Yet, the real policy risk today is the potential for cyclical timing errors that could end up fostering boom-bust cycles, and therefore result in shorter expansions that doom millions of youth to a lifetime of frustration.”

    Read March 2011 ECRI Outlook excerpted text

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  • Global Event

    April 2011

    Good Job Growth Prospects?

    “There's finally some good news about jobs. The economy is creating more than 200,000 new jobs per month.”

    Read More

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  • ECRI Outlook

    April/May 2011

    U.S. slowdown ahead

    “[O]ur U.S. leading indexes may be pointing to an approaching economic slowdown.” - U.S. Cyclical Outlook, April 2011, Vol. XVI, No. 4

    “Quite simply, following a brief revival, U.S. economic growth is set to slow again... The downside risks to U.S. economic growth have risen decisively.” - U.S. Cyclical Outlook, May 2011, Vol. XVI, No. 5

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  • Consensus View

    June 2011

    Chinese Inflation Tiger

    China Expects Inflation to Keep Climbing

    Read More

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  • ECRI Outlook

    June 2011

    Chinese inflation to ebb

    “Chinese inflation is likely to start easing in the next few months.”

    Read June 2011 ECRI Outlook excerpted text

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  • ECRI Outlook

    September 2011

    Silver Lining Within Threat of New Global Recession

    “The only silver lining is that the long leading index of global industrial growth that enabled us to forecast the current global industrial slowdown far in advance, troughed in April 2011, and has now rebounded to a one-year high… [predicting] an upturn [in global industrial growth that] is at least one quarter away.” - International Cyclical Outlook, September 2011, Vol. XVI, No. 9

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  • ECRI Outlook

    September 2011

    Economy on Recession Track

    “The jury is in, and the verdict is recession.” - U.S. Cyclical Outlook, September 2011, Vol. XVI, No. 9

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  • Global Event

    September 2011

    Recession Call; Operation Twist Announced on Same Day

    The very same day that ECRI makes a recession call, the Fed announces Operation Twist, boosting inflation expectations but not real interest rates, which continued to languish in negative territory.

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  • ECRI Outlook

    September 2011

    Italy: Recessionary Outlook

    “The Eurozone is increasingly vulnerable to shocks, with some economies already tipping into recession. A case in point is Italy, where the pronounced, pervasive and persistent decline in the Italian Long Leading Index makes it evident that recession is imminent.” - International Cyclical Outlook, September 2011, Vol. XVI, No. 9

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  • ECRI Outlook

    December 2011

    U.S. recession likely to begin by around mid-2012

    “[T]he current alignment of ECRI's leading indexes of economic activity points to a recession starting as early as the current quarter, but more likely sometime between the first and third quarters of 2012. But even after the U.S. economy begins to contract, it is apt to take several more months before GDP growth numbers turn negative and the broader consensus acknowledges the reality of a recession.”

    Read December 2011 ECRI Outlook excerpted text

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  • ECRI Outlook

    December 2011

    G7 Economies to See More Frequent Recessions

    “Due to falling trend growth and higher volatility, shorter business cycle expansions may become the norm in most major developed economies.

    Building on our 2008 work for the U.S.,… [ECRI's] analysis reveals a fairly pervasive pattern of long-term declines in the trend growth rates of GDP for most G7 economies… with higher cycle volatility,] [t]his … virtually dictates more frequent recessions in the G7 economies.”

    Read December 2011 ECRI Outlook excerpted text

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  • ECRI Outlook

    January 2012

    Economy Stays on Course for Recession

    “This does not mean that equity prices must soon tumble. After all, the world's major central banks are flooding the financial system with liquidity, and monetary easing is often greeted with bullish moves in risk assets. Also, please recall that, in the early stages of the last two recessions, those markets rallied following policy actions that were widely perceived to be sufficient to head off any recession threat.” - U.S. Cyclical Outlook, January 2012, Vol. XVII, No. 1

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  • ECRI Outlook

    January 2012

    Global Growth to Worsen

    “The global economy is in a deepening downturn from which the U.S. cannot easily decouple.”

    Read January 2012 ECRI Outlook excerpted text

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  • Consensus View

    February 2012

    Wall Street Fantasizing About More QE

    “There will be no QE3 … I think it's a fantasy of Wall Street — it's not going to happen, it's not necessary.” - Dallas Fed President Richard Fisher

    Read More

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  • ECRI Outlook

    April 2012

    Rising Risks to Global Industrial Growth

    “The looming global industrial downturn heightens the dangers to Eurozone fiscal stability.” - International Cyclical Outlook, April 2012, Vol. XVII, No. 4

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  • ECRI Outlook

    April 2012

    Leading Home Price Index Points to Improved Home Price Growth Outlook

    “[T]the current pattern exhibited by the growth rates of the USLHPI [U.S. Leading Home Price Index] and its components points to a cyclical upturn in home price growth. We arrive at this conclusion by examining the three P's to determine whether the upturns in the growth rates of the USLHPI and its components are as pronounced, pervasive and persistent as in past cyclical upturns in home price growth.” - U.S. Cyclical Outlook, April 2012, Vol. XVII, No. 4

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  • ECRI Outlook

    July 2012

    Recession Here

    “It takes time to realize that a recession has already begun.”

    “I think we're in recession already.”

    Watch Bloomberg TV Interview

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  • Global Event

    August 2012

    Bernanke's Jackson Hole speech lays groundwork for QEternity

    Rather, following ECRI's observation in August 2012 that “the economy’s cyclical vulnerability continues to mount,” [real interest rates] kept sliding. On the other hand, inflation expectations, after a “spring swoon,” began to rise, jerking up at Mr. Bernanke's announcement of QEternity, but then drifting down, along with real interest rates.

    View April 2013 ECRI Outlook excerpted chart

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