Posts filed under “Economy”

Recession Predictions

Calculated Risk has a nice discussion going on about the difficulty of predicting recessions.

One of the more interesting charts is the SPX, pre-1990-91 Recession. If markets truly had forecasting abilities, then one would presume they would have sold off in advance of the recession.

click for larger graphic

1990sp500

Instead, this chart shows the index rallied right into the start of the contraction. That is hardly predictive. In this instance, the markets acted coincidentally to the recession, instead of predictively. The beginnings and ends of recessions are marked by The National Bureau of Economic Research, and are based on quantitative data.

Calculated Risk declares recession forecasting a "mug’s game" — but also agrees to play.  He does not see a recession as imminent. That’s consistent with my own expectations for  a contraction  in 2006/07 time frame.

Other sources have had some success with recession forecasting. As one commentor here noted, ECRI has a good record forecasting economic turns.

Yesterday, I linked to Jim Stack (InvesTech Research) recent recession alert, which was reproduced at Forbes. I’ve been a subscriber, and I find Stack’s research very interesting, his track record good, and its costs relatively inexpensive.

Category: Economy, Markets

Aussie Home Prices Plunge

Category: Economy

Parsing The Fed

Category: Economy

Household Debt At Historical High

Category: Economy

Chart of the Week: Leading Indicators Trend Downwards

Category: Economy, Markets

Risk is on the Rise

Category: Economy, Markets

Is the Consumer’s Ability to Keep Spending in Danger?

Category: Economy

No Goldilocks Economy

Category: Economy, Markets

Be Wary of Anything approaching 140% of GDP

Category: Economy, Investing, Markets

262k!

Category: Economy