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If frustratingly slow economic growth is hard to reconcile with a record-high Dow Jones industrial average, what do you do with a recessionary call?

The Dow, of course, blew past its 2007 high on Tuesday and hasn't looked back since. On Thursday afternoon, it was on pace to turn in its third straight record high. And while the gains follow some upbeat U.S. economic news – initial jobless claims heading down and the housing sector showing improvement – no one has yet sounded the all-clear signal on the economy.

In fact, as we pointed out earlier, Lakshman Achuthan of the Economic Cycle Research Institute, is sticking to his call that the U.S. economy is already in recession. That's a gutsy call given that the National Bureau of Economic Research didn't officially label the last recession until 11 months after it began and Federal Reserve chairman Ben Bernanke believed in 2008 that the U.S. would avoid recession – even though, with hindsight, we now know that it had already begun.

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Mr. Achuthan made an appearance on Bloomberg TV on Thursday, speaking with Tom Keene. The whole thing is worth watching. But here's our transcript of what Mr. Achuthan had to say about recessions and stock prices.

Keene: Lakshman, we have a stock market going straight up. How can we be miserable like you when equities go to record highs?

Achuthan: I'm not miserable. But I would say that you're right. Here's the thing: In 80 per cent of the last 15 recessions, you've had an associated bear market. So that's why, if you hear the word 'recession,' you say 'Oh my gosh, we've got to run for the hills on the equity market.'

But in three of those 15 recessions, we had stock prices rise through the recession. You didn't have an associated bear market. So that's 1980, which was a pretty short recession; 1945, which was coming out of World War Two; and 1926-1927, which was smack-dab in the middle of the Roaring '20s.

A very different economy, a very different market. But to say that stock prices cannot rise during a recession is not true, empirically. ...

Let's be clear. The Fed has told you they are targeting financial assets as part of their monetary policy. They have specifically called out people's 401(k)s as something they are looking to target. So I submit that perhaps some of the market prices, as they pertain to economic fundamentals, may be a little wacky.

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