One Of The Best Predictors Of Recessions Is Rapidly Approaching The Here-Comes-A-Recession Level

BI ^ | 1-15-2015 | Myles Udland

[blam]

Myles Udland
January 15, 2015

Here's a word no one wants to hear: "recession."

Headline payroll gains were strong in 2014 and GDP growth has been above 3% in four of the last five quarters.

So everything is good, right?

Well, one indicator that has a perfect record of predicting recessions is creeping towards some uncomfortable levels: the yield curve.

The yield curve, or the interest rate paid on the range of US Treasury bonds, typically ranges from low to high: the shortest duration bills are paid the least interest, with investors earning additional yield for lending the government for longer periods of time.

In an email on Thursday, Deutsche Bank economist Torsten Slok circulated the following chart, showing that the yield curve is close to "inverting," meaning that the yield on shorter-dated paper would exceed that of longer-dated bonds.

(snip)

[djf]

Same principle as gold backwardization...

[blam]

Dr Copper agrees with a down-turn in economic activity in the near-future.

BAML: Dr. Copper Is Shouting 'Sell' Chinese Stocks

[blam]

[TheThirdRuffian]

The drop in oil demand was caused by countries not buying diesel fuel.

Economies run on diesel and weak demand is always a sign that things are literally slowing down -— not being moved.

[cuban leaf]

We never got out of the recession. Look at the size of the food lines today (EBT).

Seriously.

[cuban leaf]

Why is it still a buck more than gasoline?

[faithhopecharity]

any author who isn’t aware we are in a deep recession now.... is not living on Rock Three (or perhaps he’s living in Tx or WashDC?)

anyway, not worth reading (but as long as the Occupancy in our WH continues its anti-business, anti-jobs policies, the economy will keep spiraling downwards.....as the author predicts)

[eyeamok]

Actually a recession would be a positive step up from the Depression we have been in since Obama assumed the position.

[blam]

This thread presently has 191 entries/posts:

Boom Goes The Dynamite: Oil's Price Crash Is Going To Rip The Global Economy To Shreds

[Kartographer]

cuban you must be like me, just a short time back when I posted something like this I was told by a number of FReepers that I must not get out much that there was plenty of jobs, cars and trucks are selling like hot cakes, restaurants are full, flights are full, highways full of traffic, the market was making people money hand over fist so on and so on it was just one PARTY!

[blam]

Another forward looking indicator.

Posted one week ago:

On This Day In History, The Baltic Dry Index Has Never Been Lower

[blam]

"cuban you must be like me, just a short time back when I posted something like this I was told by a number of FReepers that I must not get out much that there was plenty of jobs, cars and trucks are selling like hot cakes, restaurants are full, flights are full, highways full of traffic, the market was making people money hand over fist so on and so on it was just one PARTY!"

Well...my friend, who owns a truck brokerage company, has been telling me for months that he cannot find enough trucks to haul all the orders that he has...so...something is moving.

[Buckeye McFrog]

one indicator that has a perfect record of predicting recessions

My average weekly beer consumption?

[nascarnation]

You ask an interesting question re ULSD vs E10 gas.
I’ve not seen this proportionality in my lifetime.

[Thorliveshere]

Of course, this will fall on the head of the newly elected Republican House and Senate....as per the media/Obama admin.

[txhurl]

What kind of stuff does he move?

[nascarnation]

Cars and trucks are selling well.
Partially due to cheap gas and partially due to abundant subprime credit.
They discovered back in 09 that the repo problem wasn’t much of a big issue, vehicles are pretty easy to repo and turn compared to real estate.

[cuban leaf]

Ha!

I used to predict that it will get worse than the great depression and will be WDII (world depression II), just as the great war became WWI and the second one, much worse, was WWII.

I believe it more now than ever (hence my tag line) but don’t bother prediction it actively.

Then again, I see I repeat myself:
http://www.freerepublic.com/focus/f-news/3111643/posts?page=4#4

http://www.freerepublic.com/focus/f-news/2117389/posts?page=13#13

[cuban leaf]

bTW, my commment in the 2008 one about rioting was assuming McCain won. I honestly did not think there were enough stupid people to get Obama elected. I was so wrong judging people there. I’ve learned from that mistake. Somewhat. ;-)

Interestingly, we’ve actually seen the rioting regarding ferguson, etc. I think we’ll see a lot more soon as, as Gerald Celente used to say people lose everything and have nothing to lose, so they lose it.

My biggest miscalculation was that I honestly had no idea our leaders could kick the can of responsibility and consequences so far. It’s impressive.