71% Worry About Economy "A Great Deal"

On March 21, Gallup released results from an annual survey in which they gathered information on American's concerns about 14 major national issues.

The survey responses indicated that the economy was the top-ranking concern, with 71% indicating they worry about the economy "a great deal."

Here is an excerpt from the Press Release that I find particularly notable:

"Americans' economic anxiety has not abated over the past year, as 7 in 10 Americans continue to tell Gallup they personally worry a great deal about the economy. This has ranked as Americans' top concern on this measure since 2008. Healthcare led the list from 2002 through 2007 and remains among the top five today.

This year's additions reveal that federal spending and the budget deficit worry Americans nearly as much as the economy. The interesting distinction is that all three party groups worry about the economy, while the deficit concerns far more Republicans and independents than Democrats."

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1288.71 as this post is written

Recent ECRI Statements

In this post I would like to highlight ECRI and some of its recent statements, after which I will make comments.

From a recent (7/14/09) Newsweek story, quoting ECRI, found here:

http://www.businesscycle.com/news/press/1481/

"From our vantage point, every week and every month our call is getting stronger, not weaker, including over the last few weeks," says Achuthan. "The recession is ending somewhere this summer."

I found the following phrase on this ECRI site link to be interesting:

http://www.businesscycle.com/about/approach/

"The emphasis is on the development of leading indexes that hold up in spite of structural changes..."

And finally, this is interesting from the ECRI website:

http://www.businesscycle.com/

"In fact, over the last 75 years, growth rate cycle upturns during every recession were followed zero to four months later by the end of the recession itself. No exceptions."

"Actually, there’s been only one solitary exception in the data we have examined, which go back well over a century. This was the growth rate cycle upturn of 1930-31, which gave way to a renewed downturn. But, when this growth rate cycle upturn was beginning at the end of 1930, USLLI growth was turning back down, warning that the firming in growth would soon be reversed, effectively opening the door to depression. That’s not the case today."

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My comments: There is a lot I could say regarding my views on ECRI's methodologies and current views.

For now, I will say that as previously stated on this blog, I believe (and my analysis indicates) that we are in a "new (economic) environment." Whether ECRI's methodologies yield the correct interpretation of our current economic environment will of course play out with time. This is something that I plan on watching closely...

As an aside, I've been wondering about the following...If a (U.S.) central banker or other main policymaker were to wholeheartedly believe in the methods and long-term predictive ability of ECRI's methodology, wouldn't it make sense, especially under a very stressful, uncertain economic situation, to try to craft policy in line with that which would promote strong ECRI leading (WLI & USLLI) growth - under the assumption that economic recovery would follow?

SPX at 927.66 as this post is written


Copyright 2009 by Ted Kavadas

Various Characteristics of Today's Economy

I would like to mention an article in today's Wall Street Journal, titled "The Economy Is Even Worse Than You Think."

http://online.wsj.com/article/SB124753066246235811.html

I found the article does a good job of highlighting certain characteristics of this period of economic weakness.

These characteristics reinforce a theme mentioned previously on this blog, that we are in a "new (economic) environment."

SPX at 901.06 as this post is written


Copyright 2009 by Ted Kavadas

Article of Note

Article of Note
Thursday, June 25th, 2009

I would like to call attention to an article written a few months ago by Scott S. Powell titled “‘The Road to Sefdom’ - Revisited.” Although I don’t entirely agree with all of its points, it presents several themes and points that I believe to be very important and worthy of serious contemplation.

Here is the link:

http://www.washingtontimes.com/news/2009/mar/26/the-road-to-serfdom-revisited/

SPX at 906.45 as this post is written