Today, we've read nothing but bad economic news. The worst of which came from the Economic Cycle Research Institute, an independent forecasting group.
Lakshman Achuthan, the managing director of ECRI, was on CNBC this morning and he had the hosts cringing. After Achutan said "a vicious circle has started," and that "we're not going to escape" a double-dip recession, one of the anchors said, "A drink?"
But in all seriousness, what ECRI is looking at is a group of what are called leading indicators and they're all pointing toward a U.S. recession. Here is what Achuthan told CNBC:
A recession is a process, and I think a lot of people don't understand that. They're looking for two negative quarters of GDP, but it is a process where sales disappoint, so production falls, employment falls, income falls and then sales fall. That vicious circle circle has started. You're looking at the forward drivers of that which are different indicators. There is no one. Everything's imperfect the weekly leading index people look at and the even that is saying unequivocally this is recession. Long leading index which has a longer lead is saying recession. Service sector indicators, non-financial services where five out of eight americans work, plunging. Manufacturing going into contraction. Exports collapsing. This is a deadly combination. We are not going to escape this. And it is a new recession.
Yup, it really has come to this. Rather than debating if there will be a recession in Europe, economists are now trying to figure what it will look like and how long it will last.
And one more bad sign: Paul Krugman, the Nobel prize winning economist from The New York Times, shares a ven diagram about the possibilities of Europe getting the debt crisis under control: