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How we will know when a recession is coming?

brookings.edu

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Re: How we will know when a recession is coming?

#121

Post by novaRom »

bhouston wrote: post #84
tinktank wrote: post #45

Earlier quoted context omitted.

You make an astute point lost to those trying to time the market.

I decided to be mostly cash now rather than stocks. I just can not buy stocks when they are this high as I worry what is the upside. Stock markets fall the most as soon as we enter into a recession and they recover fast so I want to be prepared. I am likely too soon though...

How do you define it's high? P/E ratio of most value stocks is not much higher than ever. Don't exclude technological advancements, they really contribute a lot to economical growth.

Re: How we will know when a recession is coming?

#122

Post by novaRom »

joeyrideout wrote: post #22

It baffles me how financial analysts can try to answer such a question by only focusing on the domestic economy. Economies are so interconnected, the next recession is likely to be a global recession. Alarm bells are currently ringing all over the world, but the U.S. is isolated to some extent due to its currency status and relatively stable markets. It's like standing in a room on the top floor of the Titanic and me…

>Alarm bells are currently ringing all over the world

This is not true. Please be more specific with 'all over the world' statement. Do you speak about 5% or 7% of world economy?

Re: How we will know when a recession is coming?

#123

Post by aeternum »

benj111 wrote: post #92
SeeDave wrote: post #3

Will the US economy experience a recession in the next... 100 years? Yes!!!! 50 years? Yes!!! 25 years? Yes!! 12.5 years? Yes! 6.25 years? Yes 3.125 years? Yes? 1.5625 years? Maybe .78125 years? Maybe? .390625 years? No? 0.1953125 years? No 0.09765625 years? No!

People have been calling the next recession for more than 3 years, it'll be fun to return to this prediction when we actually do have a recession, as you think it's likely within 3 years. By the way, a recession is technically 2 quarters of negative growth, so assuming we start from when we actually know we're in recession, it's a minimum of 6 months from now before we are in recession so ".390625 years" would be a d…

The market is level two chaotic system, meaning it reacts to predictions about it.

The predictions may have been correct if it weren't for the fact that the predictions themselves perturbed the system.

Re: How we will know when a recession is coming?

#124

Post by novaRom »

outside1234 wrote: post #8

The current odds of a recession are the same as just before the big recession of 2008. Also, concerningly, the real estate market is just as leveraged and bubbled as then as well. https://www.forbes.com/sites/jessecolombo/2019/06/30/current...

This analyst writes about that bubble and that it will burst since many years. What is the point? You simply cannot predict future exactly based on historical data. Times are different, technology is different, human behavior is changing, demography is changing, etc.

Re: How we will know when a recession is coming?

#125

Post by novaRom »

iamwil wrote: post #114
nodesocket wrote: post #106

Earlier quoted context omitted.

Can you also plot the S&P 500 (SPY) either overlayed or below the yield curve graph. Would be interesting to correlate.

Will do.

You can also add frequency of words like 'recession', 'downturn', etc. You may count them on different news sites. I did it like 15 years ago, it was a lot of fun.

Re: How we will know when a recession is coming?

#126

Post by tempguy9999 »

dev_dull wrote: post #95
tempguy9999 wrote: post #76

Earlier quoted context omitted.

This is pure fear spreading. Why are you doing it - is the future really so terrifying?

What fear am I spreading? I think the market is more volatile that many people believe, but more importantly the source of that risk might stem from a source they might not expect.

From this post, nebulous statements of dread

"You can sense a desperation"

"make people desperate, and desperate people are willing to try desperate solutions"

"such as radical wealth redistribution, or government/centrally planned economies (socialism) [already happened, no?] or ...?" (or = unstated fear)

"radical wealth redistribution, or government/centrally planned economies (socialism)" (oh noes, the horror!)

Your prior posts go the same way. Pretty good way of stirring up dread. Basic question then: what have you done about any of it? Or, what should we do about it, specifically?

" think the market is more volatile that many people believe" - I think anyone with half a brain is aware there's a crash coming. For real concern, a carrington event or global warning are likely much more dangerous. So do something.

Re: How we will know when a recession is coming?

#127

Post by navigatesol »

MegaButts wrote: post #23

Out of curiosity, how reliable are all of the metrics we use for measuring economic health? For instance, how reliable is the unemployment rate when it is a highly political number with lots of incentives to misrepresent (ie the chronically unemployed are excluded from the count)? Beyond that, how much are these indicators just fudged or straight-up lied about? Everybody is happy to agree with me when I say that Chin…

>the chronically unemployed are excluded from the count

This is untrue. There are various measures of unemployment, each of which includes/excludes different factors. Believe it or not, some people actually use this data for work, and sometimes not including, say, people who aren't even looking for work, makes sense depending on what you're analyzing.

>Everybody is happy to agree with me when I say that China fudges their numbers, but when I say other countries are capable of the same thing they tell me I'm crazy

I know folks who work for StatsCan and the BLS. You should provide evidence before accusing hard-working people of corruption. There's nothing intellectual about pointing to random things and saying, "could be a conspiracy!" Yeah, anything could be.

Re: How we will know when a recession is coming?

#128

Post by webninja »

MegaButts wrote: post #23

Out of curiosity, how reliable are all of the metrics we use for measuring economic health? For instance, how reliable is the unemployment rate when it is a highly political number with lots of incentives to misrepresent (ie the chronically unemployed are excluded from the count)? Beyond that, how much are these indicators just fudged or straight-up lied about? Everybody is happy to agree with me when I say that Chin…

There are rumors that the unemployment rate is now skewed by counting people with 3 jobs as “3 jobs”. They simply divide the total number of jobs by the total number of people to get the unemployment rate. This would explain the unusual growth in restaurant and hospitality jobs. I don’t know if this is true or not but any metric that becomes a target ceases to be a good metric.
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