|Official portrait of Federal Reserve Chairman Ben Bernanke. (Photo credit: Wikipedia)|
It’s Christmas- time and FedEx shipments are falling faster than GDP according to economic forecaster Lakshman Acuthan, whom I had lunch with today at our favorite place. At least 5% faster than the latest economic statistics for the whole economy.
“FedEx shipments track well to GDP,” the CEO of ECRI Forecasting told me. This latest factoid adds weight to Acuthan’s judgement that we are already in a recession, one that, in fact probably began over the summer months. If he’s right, it means the GDP numbers, which are constantly updated and restated, must be negative, not showing growth of 1-2%.
Why does he say that? Because his statistical charts show industrial production, household income and manufacturing and trade sales peaked some time ago– leaving only employment to peak to fully confirm his judgement. A judgement by the way that does not appear to be the view of giant financial institutions like J.P. Morgan and Goldman Sachs.
“If you take out financials profit growth in the U.S. is negative,” says Acuthan. “If the world had not delivered $11 trillion in liquidity the past 4 years– $4 trillion of it in the U.S., we’d be in a depression,” the highly respected economic forecaster added for emphasis. By the way, he shocked me by insisting that “the entire G-7 nations are contracting economically– as well as all the BRICS but for China, which is flat,” he claims. “Japan is in QE 10, and has gotten nowhere. That’s why I’m worried about Fed chairman Bernanke being all in” on QE4.