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A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

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Reason for Optimism


LOU DOBBS: My next guest sees reason for optimism, pointing to some bullish signals in this economy. And for that, we turn to economist and a regular "MONEYLINE" guest, Lakshman Achuthan. Good to have you.

LAKSHMAN ACHUTHAN, ECONOMIC CYCLE RESEARCH INSTITUTE: Good to be here, Lou.

DOBBS: Let's get to the good news.

ACHUTHAN: Good news. Well, some other weekly numbers in the weekly leading index.

DOBBS: Well, if it's good news, then a trend they do make, right?

ACHUTHAN: Yes. We have got seven weeks moving up. Now, we haven't said that in a long time -- in the weekly leading index.

DOBBS: And tell everybody what these indicators are.

ACHUTHAN: Well, they are things -- some that Kathleen mentioned, job data, commodity prices, credit measures.

We put all these indicators together because all of them can all give us false signals. And together they are showing up that there is some signs for optimism. If it continues, if we get about 10 weeks straight up, then we are going to be looking for recovery in short order.

DOBBS: If seven weeks is enough for you to bring it to our attention, 10 weeks to say you feel pretty comfortable with the direction.

ACHUTHAN: Three P's: How pronounced, how persistent and how pervasive is the rise?

DOBBS: How perfect? (LAUGHTER)

ACHUTHAN: Four P's, there you go.

So, you have got pronounced. You have got pervasive. We're looking for persistence. And we are getting there. If it keeps going, then we are going to be talking about an upturn. Then we have to start talking about what kind of an upturn. And that will be certainly on everybody's mind going forward.

DOBBS: Then once again we can start talking about profit.

ACHUTHAN: Well, hopefully. That will be part of it.

DOBBS: Lakshman, thank you very much. We will be watching very carefully over these next three weeks. We'll be keeping our fingers crossed for your weekly indicators.

ACHUTHAN: Got it.

DOBBS: Thanks.
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