The experts at Weiss Research first warned of the risk of a double-dip recession on Money and Markets TV about two months ago. At that point, it was clear that the labor market was not recovering, and a report had just shown a steep decline in pending home sales. Even more troubling, the Economic Cycle Research Institute’s closely watched Weekly Leading Index had fallen to -7.7%, its lowest level in more than a year.
Despite these warning signs, economists, policy-makers and traders on Wall Street stayed bullish on the economy and the markets.
Since then, things have only gotten worse. The crash in the housing market that the May pending home sales report portended has finally hit home, with July new and existing home sales falling off a cliff. The latest employment reports continue to show persistent unemployment and a lack of job creation. And the ECRI weekly leading index has now dropped to around -10%, a level that has always indicated a recession in the past.
So will the so-called experts pay attention this time? It seems as if the Fed, for one, is finally taking notice, saying it’s open to more aggressive actions to stimulate the economy. But Wall Street seems as myopic as ever, trading on every piece of data and ignoring the big picture. That’s why at Money and Markets TV, we see it as our duty to take the long view, and tell investors how to protect themselves, and even profit, from the coming recession.
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