Leading Economist Says: "New Recession Is Unavoidable, U.S. Economy About To Get MUCH Worse"

Source - Tech Ticker

Weakness in leading economic indicators has become so pervasive the Economic Cycle Research Institute now predicts a new recession is unavoidable.

"The vicious cycle is starting where lower sales, lower production, lower employment and lower income [leads] back to lower sales," co-founder Lakshman Achuthan declares in the accompanying video.

Whereas Achuthan said the jury is still out in late August, the weakness in leading economic indicators — and ECRI uses a dozen for the U.S. alone, he notes — has become a "contagion" that is spreading like "wildfire."

Although the recovery has been "subpar" by nearly every measure, Achuthan refutes the idea the economy never got out of recession in the first place. "Just because it looks and feels a certain way doesn't mean it's a recession," he says. "You haven't seen anything yet. It's going to get a lot worse."

It's too soon to predict just how bad it's going to get, but he expects another spike in unemployment and further expansion of the federal government's $1 trillion deficit. This forecast has huge ramifications for the 2012 election and the already struggling U.S. consumer and Achuthan says a "mild" recession is the best-case scenario.

By now you may be wondering what separates ECRI's recession call from the myriad other recession calls out there. First, ECRI's primary raison d'etre is predicting recession and recovery calls. Second, and more importantly, The Economist reports ECRI has never issued a "false alarm" on a recession call, meaning many of the Chicken Littles currently declaring "the sky is falling" might actually be right this time around.

Comments

[TR]

Kunstler
"The financial gangrene (thank you Zero Hedge) is not just seeping anymore, it's blowing through the arteries of the money underworld like fracking fluid."


http://kunstler.com/blog/2011/10/here-come-the-owsers.html

[TR]

Denninger

http://market-ticker.org/akcs-www?post=195324

[No JUJU]

What a moron--the expert guru believes today's unemployment rate is single degit. America is living on borrowed money--wait when there is no money for issueing food stamps--remember Americans have the most guns per person in the world. Guy thinks when unemployment hits double degits--recession. Me think DEPRESSION is about to hit us. Every 3 years cycles? B.S--this ain't the same--look around--folks are getting madder than hell :^(

[S. Gompers]

Can anyone even really tell the difference between one recession and the next anymore? Whatever happened to periods of prosperity in between them...

[Dr. Pitchfork]

Gomp, Wall St. bonuses were at near-record levels last year. What are you talking about? ;-)

Yep, this was nothing but a perception-management recovery.

[S. Gompers]

Wall Street gets paid no matter what Dr, P., lol. They just dip into the suckers accounts, sell junk, or beg from the government and then return the favor partially as campaign contributions on the next election cycle...

[DailyBail]

Recession. It is now becoming clearer, even to the mainstream media, that the "Big 'R'" is rapidly approaching, or already upon us.

http://www.zerohedge.com/news/guest-post-yield-spread-confirming-recession-call

[DailyBail]

Michael ‘Climategate’ Mann Suffers Three Legal Blows in Court Escapade

http://co2insanity.com/2011/10/04/michael-%E2%80%98climategate%E2%80%99-mann-suffers-three-legal-blows-in-court-escapade/

[DailyBail]

(Reuters) - New Jersey Governor Chris Christie dashed hopes on Tuesday that he might make a late leap into the 2012 Republican presidential race.

http://www.reuters.com/article/2011/10/04/us-usa-campaign-christie-idUSTRE78T5E520111004

[DailyBail]

(Reuters) - European finance ministers agreed on Tuesday to safeguard their banks as doubts grew about whether a planned second bailout package for debt-laden Greece would go ahead.

Hours earlier French-Belgian municipal lender Dexia SA became the first European bank to have to be bailed out due to the euro zone's sovereign debt crisis.

"Everyone said the big concern is that worrying developments on the financial markets will escalate into a banking crisis," German Finance Minister Wolfgang Schaeuble told a news conference after EU ministers met in Luxembourg.

http://www.reuters.com/article/2011/10/04/us-eurozone-idUSTRE79211720111004

This story is why the markets rallied so strongly at the end of the day.

[DailyBail]

Detroit— A federal judge today accused the state of "sleight of hand," and halted plans to end welfare benefits to nearly 41,000 Michigan residents.

From The Detroit News: http://detnews.com/article/20111004/METRO/110040423/Judge-halts-welfare-cuts-for-41-000-Michigan-residents#ixzz1ZrRhbna8

[LAdy Susu]

Well at least the decorators in Greenwich and Palm Beach will be gainfully employed and receiving federal taxpayer money as they redecorate all the banksters first, second and weekend homes....

[Texas Dar]

In 2010 I said 2011 was going to be the start of going into the toilet. 2012 will be when the shit hits the bottom of the septic-tank. Maby I knew what I was talking about..........

I'll be OK guys, I baught the Tidey Bowl mans boat n trailer.....................