Monday, September 21, 2009

Follow The Leader: Index of Leading Economic Indicators August 2009

Today’s results of the Conference Board’s Leading Economic Indicators showed another significant monthly increase climbing .6% compared to July bringing the annual increase to 1.89% and leaving the index at a level of 102.5.

On the face of it this is clearly a Bullish “Green Shoots” development as this series (an aggregate of 10 component leading indices) is signaling a clear shift from leading contraction to expansion though the leading index is strongly influenced by stocks (i.e. the inclusion of the S&P 500 as one of the leading indicators) and the pronounced “V”-shaped bounce coming directly on the back of such a dramatic period of decline appears suspicious.

Could we be headed into a second dip (… similar to mid-1981) as the government’s Keynesian chicanery shows itself to have only propped demand but failed to encourage real “organic” demand?

Only time will tell…

1 comment:

  1. I love bears they need to just stop making all these power plants that kill our environment...

    ReplyDelete