ECRI: WLI Edges Up

This week I have a problem with the ECRI WLI, but read the weekly verdict first (my emphasis):

April 03, 2009
(Reuters) - NEW YORK, April 3 (Reuters) - A measure of future U.S. economic growth edged up and its annualized growth rate reached a 23-week high though it was still in negative territory, suggesting clearer signs of economic recovery, a research group said on Friday.

The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index climbed to 106.7 for the week ending March 27 from 106.2 in the previous week, which was revised down from 106.3.

The index's annualized growth rate resumed its recent upswing and was at negative 22.2 percent, up from the prior week's rate of negative 23.2 percent. The growth rate was at its highest reading since mid-October.

"With WLI growth rising to a 23-week high, an upturn in the U.S. growth rate cycle is now in clear sight," said Lakshman Achuthan, managing director at ECRI.

The weekly index rose due to higher stock prices and stronger housing activity, and was partly offset by higher interest rates and claims for state jobless benefits, Achuthan said.

Achuthan was seen at CNBC today, and writes now at The Big Picture ...

Where is my problem? First, the suspicion of skew in February data... If the skewed housing data are causing some fun in equities, this appears like vicious circle ... All the bulls around marking-to-bankers-dreams are fundamentally flawed, as mark-to-market is not the cause, but just reveals the problem. Change in accounting rules do not change cash flows... Well, whatever is the appraisal of changes in accounting or "Geithner Put", every dollar given to banks is taken from plumber Joe ... At the end of the day, it is a consumption crisis, caused by credit crisis due to mounting debts, and not the shortage of corporate capacity.

Any cyclical upswing may be like in 1931, at best?