ECRI’s Lakshman Achuthan has come under substantial fire in the last 9 months for making a recession call that hasn’t been accurate. And he was making the media rounds this morning once again defending his recession call. He says we’re going to see a recession by year-end and that we won’t know it’s here until well after it’s started.
I’ll let the reader pass judgment on this call. As you likely know, I’ve taken the other side of this bet since he came out with the call last year and I continue to fail to see what he’s seeing that makes him so convinced that the recession is on the horizon. Granted, there’s broad weakness in the economy, but that’s normal in a balance sheet recession. Personally, I think the misunderstanding of the balance sheet recession is likely what has resulted in many of the recession calls in recent years. And if you’ve misunderstood the impact of sizable budget deficits and how this interacts with the private sector then you’ve made inaccurate calls regarding Europe, the USA and many other countries….