by Jeff Miller (OLDPROF)
My respect for Dr. Robert Dieli rests on his unbiased use of data. His current mission is important and widely-shared – finding the trough in the new economic cycle. The challenge is how to use the data. Some plod along with their old methods. Others believe that the data tell us nothing. Here is Bob’s analysis of the data problem:
The current situation has two components. The first is the cyclical environment described by the model over the past several years. To wit, the transition from the Boom phase of the cycle to the Recession phase of the cycle. Those conditions were in place before the pandemic, and remain in place now. The second is the pandemic and its effects on economic activity. The pandemic is not a cyclical event any more than the polar vortex or the Greek debt crisis (remember that?) were cyclical events. The main difference between the pandemic and other events is its scale. We have never had an event of this magnitude and it is no wonder that our measurement devices are overwhelmed. Hence my mention of a Pandemic Adjusted EAS. This is not a replacement for the EAS, it is an effort to separate the pandemic effects from the cyclical events. And, more importantly, it is an effort to see how the pandemic effects are adding to the problems associated with the cyclical events. More on this in a moment.
He also sees a “W” in our future, but with pure economic reasoning. He is an expert on logistics and second-order effects. These will be coming. Any serious investor or manager should be reading Bob’s reports. Try a few and compare them to what you current depend upon. You will soon see the difference.
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