ECRI still calling for a mid-year recession.

ECRI still calling for a mid-year recession.

Recession call made September 2011, forecasting a recession by mid-2012.  You won't know you are in one until about 6 months later.

Definitive data show no recovery, indeed things are getting worse:
-Annualized GDP peaked in Q3 2010.  By Q2 2011 it fell to 1.5%.  The last read was 1.6%.  Since the peak it has flat-lined at 1.5%.
-Personal Income is down.
-Overall sales are down (recall the inventory surge in Q4 2011 GDP number?)
-Industrial Production is at a 22 month low.

This pushed the Coincident Index to a 21 month low.  In the last 50 years this has equaled a recession.

Why is sentiment up?  Central Banks have printed trillions in currency.  As I discussed last week, that is why we have had the economic lift we have had.  Not stimulus, not real growth, just extra money.

Money Velocity:  Trillions of dollars out there but velocity is at a record low in the US and near record lows in China and Europe.  The money is not getting used but going into the financial markets just as it did in, for example, 1999 when the Fed pumped all that Y2K money into the economy and it was put in the stock market.

Personal disposable income: Negative for the past five months!!