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Lakshman Achuthan

lines on the record: 138
first: 2014-11-29
most recent: 2014-11-29
sittings or episodes: 1
sources: podcast

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“In the second half of 2013, there is some lift happening to the economy, and we're looking for it to be pronounced pervasive and persistent. Well, so we get pronounced and we get pervasive. We didn't get persistent. And the leading indicators, the forward-looking indicators at the end of last year had all turned down before. Weather got bad. The leading indicators of construction had turned down well before the weather got bad. The leading indicators of home price inflation turned down even before the taper tantrum when Bernanke opened his mouth.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Or a student loan government guaranteed student loan. And you've seen the growth there has been pretty healthy. Massive, yeah. Right. But when you go to just regular consumer credit or other kinds of loans, or if you go through the motions, I think someone putting 20% down, they've got to put 20% down for a house. And it's not terribly easy to get the mortgage. You got to go through a lot of stuff to get it.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“The cash can go out and buy, but most people don't. Most people have to, they can't afford to buy a house outright. And so it's either speculative business or just wealthy people who are doing it or wealthy global people who are doing it. The Chinese are trying to get the money out of China because they said we're going to slow this thing down. So you get your money out. And it's either London, New York, or California. Vancouver or Vancouver, right? Vancouver.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“You can get a mortgage, but they'd rather sell a house to somebody who's paying cash, and a lot of people do pay cash. Just by the way, there's just.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Net income. But a horrible cause is down. Gross Grum is going down. Yeah, exactly. And that's really the only thing that matters to somebody. And your savings rate, people are diving into their savings. It's down at a low, low level. And when you go to credit, the kind of credit you can get is you can get stuff that's collateralized, like a car loan. And you might even have to stretch it out over seven years.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, no, they're both going down. You're working less hours and you're getting paid less, but the hours are falling faster than your pay, so your average hourly earnings go up.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“But it's actually not even true. I mean, it's true that it's going up, but it's going up for a statistically poor reason. The reason it's going up is because the pace at which your hours are being reduced.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“But there's not, and it's not going to move the dial on the big numbers. And what you see is average hourly earnings is going up.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's the thing The energy jobs are high paying mining and energy and these kind of things. And dangerous and dirty, and they don't employ that many people. I mean, yeah, if you can get them, they're interesting and high-paying jobs. Go to North Carolina.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“There was a Dilbert comic a year or two ago where the caption says that the job market is changing quicker than people can evolve. And that's kind of what we're in. And it's displaced a lot of people who will not be able to work. And it's not even just in the US. It's happening in Europe. It's happening in Japan. And you see older people are having to work longer before they retire. And younger people are having a tougher time starting off in a good spot. And that impacts their entire career path for their life. Where they begin. Yeah.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“But breaks them out. But the businesses are not that interested in doing it because the demand is lackluster. It's kind of blah.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, probably a little bit of both, probably a little bit of both. I mean, that's an interesting, I was talking earlier this morning about the policies, low interest rates or a tax break on CapEx. And it's interesting because you're essentially paying businesses to the extent they will invest to invest in something that'll get rid of a job. You know, that's a lot of what they've been doing. And when you look at businesses, you may have seen Larry Fink from BlackRock wrote a letter to his peers. I recall that. And he said, please, please, please start spending your money. Sitting”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“This is a global phenomenon of more developed economies, and it may have demographics. It may have globalization. It certainly, I think, productivity growth is an issue, which has been pretty weak. Now, is it weak?”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. So for policymakers, I mean, I think certainly at the central bank level, there's a lot of interest. I think for longer term... How do we get out of this mess? There's interest, but it's more on a theoretical level because if we are in this low growth, more frequent recession, it does all kinds of things to your budget policy, because you're going to have high long-term unemployment is going to be high, disability payments are going to be high, all these other transfers are going to be high. So your budget issues are. Are there, and there's no clear policy that is going to jerk your trend growth rate up? And this isn't something that's simply about the US. We're seeing it in Europe. We're seeing it in Japan.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that they're, you know, Stegosaurus. There you go. Yeah, no, but if you want to look at what region of the world, what country, stocks and bonds, real estate, commodities, those kinds of asset shifts back and forth, that's stuff that cycle indicators can tell you about the risk of things going one way or another. When you look at businesses, the cyclical businesses, where there's a discretionary spending component, those are the businesses that are really interested in managing cycle risk, manufacturing is very interesting. They're very cyclical. So those kind of companies.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“All three. So for investors, it's largely around an asset allocation decision. It's not a day trader stuff, right? Couldn't really care about our stuff.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Looking at cyclical risk. If you're on the business side, if you're a discretionary type of business, your product is somewhat discretionary, very cyclical. You have to be very sensitive to the cycle. If you sell toilet paper, You know, even in a downturn, you're going to sell toilet paper.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“They're buying. And I think that kind of destruction, that describes what's going on. I mean, and when we talk about who can benefit from...”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“You've seen in the stuff that normal people care about, which is food and energy. The cost of your iPad might go down a little bit, but the food and the energy part that is non-discretionary, that part's going up so that money that's left for discretionary spending, which is very cyclical, is smaller. And so the cyclical piece of your economy, right? When you look at the rebound, the so-called rebound in retail sales that we had in the last print, you'll notice that it's what people need. It's not what they want.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, and I would say from a cycle point of view where I can add something that when the cycle is decelerating, you probably don't want to push it down further. If I had to raise taxes at some point, I'd do it when the cycle was going up, not when it was going down, as they did in 1997. Now, people think Japan has had deflation forever. Actually, no, it didn't start till 98. After this policy mistake where they raised taxes going into a downturn, and that recession that they had, 97-98 was one of the nastiest, most severe recessions they've had. And it brought to that economy. Real persistent deflation. Now in Europe you're fighting disinflation. In the US, you're fighting disinflation. We're not a deflation, but”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Correct. So you bought your bicycle or your air conditioner before, and then you didn't have to pay 5% more in tax. Is that what?”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“No, no, no. They're not necessarily, they don't have to be more shallow. Remember Japan 17 years ago, on April 1st, raised its tax. And this past April 1st, they raised their tax again, sales tax. And it didn't work out well because either time currently it doesn't seem to be working out too well. And last time.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, it's not like everything's broken and it doesn't make any sense. This can happen, but it does suggest that that feeling that you have that it might not end well, there's some precedent for that. And I can't say that tomorrow is going to be bad or whatever. But ultimately, if we don't have stronger economic growth on a sustained basis, that disconnect between some of the expectations and the fundamentals may have to get reconciled.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, and it was built. There was some scams, Ponzi, New York Fedros active, other things. There was different kinds of consumer financing was coming in, all kinds of leverage. Okay. So we're not that. But what that shows you.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, you can imagine if there was no disrespect to Jim Kramer here, but if there was a Jim Kramer there, he would have been saying bye, bye, bye, right? At that moment. And so here we have a recession. It's a full-blown, pronounced pervasive persistent whatever in all the indicators from 26 to 27. Stock market goes up 30%.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“But they said fairly remember. It's so young. It sounds pretty, you know, people were pretty excited, right? And so they had a recession.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's how it should be. And that's where the Fed gets it backwards. Well, typically it does work that way, and that's why in 12 out of the last 15 downturns, you've seen the stock market react. And three of them, they did to the net. The Roaring 20s, it didn't. Now, remember the Roaring 20s? I mean, I don't. I wasn't born, but they sounded.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't know if that's still the case. No, I know. I mean, another way of looking at it is, you know, the Fed takes rates to zero or close to them effectively. And then what are they supposed to do next? Push on a string. So, while they're pushing on a string, but they don't want to admit that. So what they say is, oh, now we're going to do the wealth effect. We're going to make the house price go up. We're going to make the stock price go up. And then you're going to go out and spend, right? And the wealth effect, and you see that's broken. That hasn't happened.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, how could you ever? And so I get the arguments, and I think that there are reasonable arguments for extraordinary intervention at the depths of the Great Recession. I get it. But that was a long time ago, wasn't it? Number one”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“That all of this recession denial or all of the policies designed to kind of like do by hook or by crook to pull some demand from next quarter into this quarter actually is keeping trying to subvert that process, which is actually a very healthy process for a market economy. People point to the UK and say, oh, look, it's growing well. Austerity works well or whatever. They have some argument, right? Actually, they had two recessions, which really squeezed a lot of stuff out and set them up for some growth. Now, I'm sorry to say that that'll fade a little bit at some point, but still these recessions Do set you up for more sustained growth. And when you have a policy which is just so limited to pulling next quarter into this quarter, low interest rates, some tax breaks. Ultra low interest rates, yeah.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“People are binary. We're recession, yes or no? Well, I think people equate recession with the end of the world. Right. Which is always a losing thing. And I don't. You know, I don't. I think a recession as bad as it can be for people who are near the collateral damage, they can be very cathartic. I mean, there's reasons for recessions. It does squeeze out your excesses and sets you up and it'll properly set you up for growth. In the current environment, one could argue.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Pervasive Yeah, except for agriculture, apparently. So it was nearly pervasive. Well, agriculture is not a, I mean, non-farm is where we focus. I mean, the farm industry is not a big component typically of this economy. And then what about pronouncing?”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And if you look underneath and see why, what was the growth? It was a freak outsized contribution of agriculture which never contributes to GDP. It's a rounding error typically, and it made up the bulk of that growth. So the rest of the economy was not in action during that time, right?”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“The epicenter of the weakness of the downturn will be in the fourth quarter. 2012 and in the first quarter where you have annualized GDP growth for that half a year at a fraction of 1%.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Describe 2011 and 2012. Sure, sure, sure. Well, I think in 20, you know, when we look backwards, Time will tell if we were technically correct on our recession call. In 2011. Yeah, it looks like there was a...”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Even go against my gut instinct. But I have a lot of respect for the framework, and that is why sometimes I think I can stand in a room where everybody disagrees and say, well, here's what I think. I feel like I'm framework is. It's not about what some guy whispered to me in a corner somewhere who supposedly knows something. It's what the framework of objective indicators are saying. Are they moving in a pronounced, pervasive, and persistent way, one way or the other? And then it's my job to kind of figure out the story around that, try to explain it.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and they are focused We actually don't even consider ourselves forecasters. We consider ourselves monitorists. We're monitoring a very limited word monitor at that. With an eye. Not with an E. And we're watching these indicators. And so when I say to you, here's what they're saying, it may”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“People behind me, this is not all my work. I have a huge. Oh, so you're not a one man. No, no, no, no. I've been to your offices.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Is that what you're saying? You know, to a degree, I probably, but I think what it is is having a framework. And I mean, Jeffrey Moore, my mentor, Dr. Jeffrey H. Moore, was an interesting guy for the same reason. I don't purport to be as bright as he was, but he was able in academia, which can be a pretty rough environment. You know, you can get stabbed in the back there often. And he went against the grain in terms of forecasting. And he did not go into the model building econometrics, and he instead stayed with the monitoring of cyclical indicators and developing that type of research, which was not in fashion in academia. And that framework that we have there is what I'm taking advantage of today at ECRI with all of our research group. I mean, just to be clear, there's a lot of”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's so easy for people to decide. It'd be really tough. It takes a certain type of person to do this, first off. I mean, and I guess I have some of those abilities, and I don't think there's any small.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think the deleveraging actually is a contributing factor, but I don't think it's causing it. So, what I'm saying is when deleveraging is over, this problem doesn't go away. It doesn't go away.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I still don't want to hear it. You still don't know. Oh, I'm not going to But this isn't fun to hear. Pimco has been talking about the new normal. These are all different angles on this issue.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Slow trend growth, we need to face up to what's going on. Larry Summers at the end of last year went out and talked about secular stagnation and nobody wanted to hear it.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“A much larger. I think they're in version. It's issue number 10 now or something like that. And this was a really big one, the one that they did recently. And they're already slowing. They're in their third decade of weak growth. And Japan famously has been fighting deflation. Europe is very clearly having some price problems, disinflation. And actually, the U.S. is too. I think that we're not that exceptional. I think in this regard, I know, dare I say, hey, I'm a true American here, but I'm saying that on this cyclical count of...”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And then they recover again. And now they're all actually turning down a little bit. So they're seeing more frequent recessions in Europe right now, already. It's not even a forecast anymore that this is currently happening today. Look at Japan. In 21 years for how long. Well, in 21 years, they've had six recessions. They've had Abenomics. They've almost shot everything they can shoot at the economy. The structural stuff is a little bit.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“An extended, a long business cycle, you don't mind that much. And here, the volatility of the cycle comes in. So we have a relatively moderate cycle, not big swings, gentle swings, but our altitude is low. So it feels okay. And in fact, that was a very impressive on many statistical counts expansion. The problem is, if the volatility returns and your altitude at that low level, you're in big trouble. And so let's take a look at Europe or the UK. After the Great Recession, they all recovered for a little bit. And then they went back into recession. Right.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“What does that mean going forward? I think it's very interesting. This is at the core of something that's been concerning us since 2008. And we call it the yo-yo years. We've entered our yo-yo years, which is a period of weaker growth and more frequent recessions. And the Greenspan years are related to that. In a way, they masked it. Trend growth in the United States, no matter how you slice it, has been getting weaker and weaker since the mid-70s. The pace of each recovery since the 70s has been getting weaker and weaker. It's stair stepping down. Now in the 90s, which had relatively low trend growth compared to earlier decades, as long as it's”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“How to make things better, and they have suggestions. But the idea that you can go so far as to get rid of the business cycle is one that has been promoted many times and it's failed many times time and time again. Yeah, Irving Fisher in 29, the plateau.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I am a very empathetic, sympathetic person. I am not saying everybody should just be in trouble at their service after I'm not going there. Liquidate bank. And I understand. I understand everybody from both sides of the policy spectrum. They're trying to figure out.”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“The Fed's been around for maybe half of those. So they've been around when there have been a lot of recessions. So they haven't been able to get rid of them. For sure. Maybe they contributed to some. I don't know. You know, we could argue that too. I don't think that's much of an argument. Okay. So the point is, is like, you know, this is the condition of the environment we're in, that it has this cycle going up and down. And so if things get really bad,”
2014-11-29 · Masters in Business · Masters in Business: COO of ECRI Lakshman Achuthan (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source