The prediction by the Economic Cycle Research Institute (ECRI) that the United States is headed into another recession was greeted by a rise in the stock market from 1,074 on the Standard and Poor’s 500 Index on Tuesday, October 4, to 1,238 on Friday, October 21, a gain of 15 percent in just 13 days.
This sudden rise happened in the face of ECRI’s spokesman Laksman Achuthan’s emphatic forecast that “it’s going to get a lot worse … you haven’t seen anything yet.” Furthermore, Achuthan said that there is nothing policymakers can do about it, that the decline is just going to have to run its course.
Jon Markman, a stock market watcher and skeptic who writes for MarketWatch, asked Achuthan if this time his prediction might be wrong. Achuthan isn’t backing off one bit. Noting that his proprietary blend of various leading economic indicators has never failed in the past, he wasn’t surprised at the market’s rise following his company’s announcement, and said that the rise even confirmed his bearish call.
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