We don't. Anyone with any real predictive power over that question had a license to print money
Yes, which is why Ray Dalio has done just that
How we will know when a recession is coming?
41–50 of 128 posts
Re: How we will know when a recession is coming?
#42"The indicator has both correctly signaled a recession 4–5 months following the beginning of the recession and has virtually never called a recession incorrectly since 1970.'
This is more like "how will we know when a recession has already started without waiting for a down GDP for two quarters." That's 6 months in. This signal lets you know 4-5 months in. Not exactly a leading indicator.
Re: How we will know when a recession is coming?
#43You won't.
If you could, you could make an enormous profit off this knowledge.
Re: How we will know when a recession is coming?
#44Why does it have to be just a recession with rebound a few years later? I’d argue many are thinking too positive following 2008 where everything will go back to normal and prices will rally to all time highs. The US economy almost blew up into a full blown depression in 2008. The Fed swooped in to save the day. Can the Fed do that again indefinitely with not only US but potential problems worldwide? The global econom…
> Can the Fed do that again ...? I mean they don't have much to give do they? Unless we're doing negative interest rates this time.
The president asked for negative interest rates this morning.
Re: How we will know when a recession is coming?
#45Will 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!
You make an astute point lost to those trying to time the market.
Re: How we will know when a recession is coming?
#46"The indicator has both correctly signaled a recession 4–5 months following the beginning of the recession and has virtually never called a recession incorrectly since 1970.' This is more like "how will we know when a recession has already started without waiting for a down GDP for two quarters." That's 6 months in. This signal lets you know 4-5 months in. Not exactly a leading indicator.
> has virtually never called a recession incorrectly since 1970.
"virtually never" also sounds like weasel words considering the total number of recessions.
Re: How we will know when a recession is coming?
#47Why does it have to be just a recession with rebound a few years later? I’d argue many are thinking too positive following 2008 where everything will go back to normal and prices will rally to all time highs. The US economy almost blew up into a full blown depression in 2008. The Fed swooped in to save the day. Can the Fed do that again indefinitely with not only US but potential problems worldwide? The global econom…
> Can the Fed do that again ...? I mean they don't have much to give do they? Unless we're doing negative interest rates this time.
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Re: How we will know when a recession is coming?
#48Earlier quoted context omitted.
You're right, but what if revealing the discrepancies wouldn't be beneficial to the company? Many people knew about the subprime mortgages before the 2008 recession and no-one came forward, although some shorted it.
I worked in that industry during that time period and its just not true that no one came forward. As early as 2003 Warren Buffett straight up called them “weapons of financial destruction”. In 2005, the World Bank released a report suggesting that the derivatives the banks were holding could cause a financial crisis. I remember the day the yield curve inverted in 2005 because I was working for a company that made ris…
To underscore the point you are making, part of the drama of the The Big Short was the creative ways people had to find in order to short that particular market (or those markets. I think one group shorted credit spreads and another was shorting an index of derivatives tied to the mortgages? Been so long since I read it).
Re: How we will know when a recession is coming?
#49This is a really interesting metric but I'm going to argue that it doesn't say that much about our current situation given that our current unemployment numbers are highly skewed due to a strong shift towards low quality part time work and a large number of people opting out of the labor search (who are not considered unemployed in these statistics). I could see an argument made that given that this is statistic is r…
I do not have any real numbers, and this is just anecdotal, but in Slovenia (small EU country), a lot of our larger retailers have replaced some posters (basically ads) in their stores with "workers needed" posters, and some have literally advertised that they're looking for workers in their paper ads we get in the mail. Also a car repair shop literally had an radio ad that they're looking for repairmen. It might be…
It is very similar in Germany. Many companies looking for more people. And it's not about highly educated positions, they are looking simply for young labor, there so many old people.
Re: How we will know when a recession is coming?
#50For fun, I put together http://isitrecession.com, in the spirit of https://isitchristmas.com
It just shows the inverted yield curve, pulling down data from the US treasury everyday, and subtracting the 1 year from the 10 year interest rate.