There's a 70% Chance Of Recession In The Next Six Months, New Study From MIT And State Street finds

CNBC ^ | 02/05/20 | Pippa Stevens

[Enlightened1]

• A new study from the MIT Sloan School of Management and State Street Associate says there's a 70% chance that a recession will occur in the next six months.
• The researches used a scientific approach initially developed to measure human skulls to determine how the relationship of four factors compares to prior recessions.
• The index currently stands at 76%. Looking at data back to 1916, the researchers found that once the index topped 70%, the likelihood of a recession rose to 70%.

 

There's a 70% chance that a recession will hit in the next six months, according to new research from the MIT Sloan School of Management and State Street Associates.

The researchers created an index comprised of four factors and then used the Mahalanobis distance — a measure initially used to analyze human skulls — to determine how current market conditions compare to prior recessions.

"The Mahalanobis distance was originally conceived to measure the statistical similarity of the values of a set of dimensions for a given skull to the average values of those dimensions for a chosen group of skulls," the researchers explained.

It measures the distance between a point and a certain distribution.

Using this principle, the researchers analyzed four market factors — industrial production, nonfarm payrolls, stock market return and the slope of the yield curve — on a monthly basis. They then measured how the current relationship between the four metrics compares to historical readings.

Looking at data back to 1916, the researchers said that the index was a reliable recession indicator since it rose leading up to every prior recession. They found that when the index topped 70%, the likelihood of a recession in the next six months rose to 70%.

[NonValueAdded]

From everyone hedging or taking profits lest a RAT get elected.

[newzjunkey]

How do you propose he would get in front of this virus? It's up to China to contain it. So far we're doing fine. He's not one to be shy about travel restrictions.

Probably the thing he could do is reduce sanctions if the virus causes major economic disruption in China. On the other hand Trump has made is a priority to buy and hire American and warned against relying too much on foreign production in critical manufacturing areas. Depending on how well that's happened, we might be better set to weather the next recession than expected if it starts abroad. There's no question we'll have a recession, it's just a question of timing and mitigation. Because of the tools overused during the Obama years by the Fed, Trump probably won't have as many options available to him.

We do not need to be talking down the economy but it's expected from the Left because the economy is a huge Trump re-electon strength.

[entropy12]

So long as the artificially low interest rates executed byvthe FED remain in place, the debt bomb is growing, housing bubble is inflating, stock market bubble is in stratosphere.

By artificially low I mean much lower than real inflation in main street economy. I got 1.6% raise in social security for 2020, which is not even close to inflation at grocery stores, car prices, car repairs, utility rates, property taxes, hospital bills, doctor’s bills, prescription drugs, iphones, restaurant menu, etc. CPI at 1.6%? what a freaking cruel joke.

[IronJack]

What interesting timing! Since the market is so dependent on rumor, were one trying to discredit an administration that has envigorated the economy, one could almost certainly damage that administration by circulating rumors of imminent economic collapse.

But that would be fake news. And propaganda. And lies. The media guardians of truth would never indulge such reprehensible behavior, would they?

[bray]

These are the same models that are predicting Global Warming.

[himno hero]

There is a 100% investors are right. They have all weighed in and pushed the values of the markets up in anticipation of continued growth and prosperity.
These are guys who bet with a real assessment of the facts, bet with real money, and their numbers exceed the assholes in the labs.

Where’s Krugman and the rest of the obamanites?

[Diana in Wisconsin]

Well, SOMETHING is up, and I’ll bet the farm on Globalists.

PMs have NEVER been this high in the 15 years I’ve been holding them. Usually when the market is down, PMs are up and vice versa.

These days the stock market goes up and so do my PMs. Not that I’m complaining, but it does not compute. The reason you hold both is for the protection and diversification BOTH provide.

http://www.321gold.com/

Meanwhile, I’ll happily watch my retirement savings grow.

More, Please! :)

On the other hand, one shouldn’t get too cocky:

Poetic Justice Coming For The 1%

To understand just how grim the coming decade is likely to be for the world’s super-rich, let’s start with three premises:

1) Capitalist democracy — defined as free individuals managing their own property and periodically electing new leaders — is the only system of social organization that’s consistent with human nature and is, therefore, sustainable.

2) Capitalism inevitably produces inequality as a few participants — through energy, creativity, and (frequently) luck — do extremely well while the vast majority do okay and a few do very badly.

3) Since the big winners — now commonly known as the 1% — are vastly outnumbered by the rest of society, they can only keep their exulted position if they convince the 99% to let them be. If the rich fail to make their case, everyone else will simply vote to expropriate the most visible fortunes.

If you accept these assertions, it follows that enlightened elites would be all about fostering upward mobility, because when people on the lower rungs of the economic ladder know that by working hard and following the rules they can move their families to the next higher rung in a reasonable amount of time, they focus on their on improving prospects and don’t much care if a few billionaires live like princes and kings.

https://www.dollarcollapse.com/poetic-justice-1/

Goes on to show how a Socialist President, ala Bernie, could easily destroy the wealth of the 1% set (of which I am NOT a member!)

[VideoDoctor]

There is always a POSSIBILITY of recession at nearly ANY time.

This is a CNBC news article which tells me there is a 100% possibility chance of “fake news!”

[richardtavor]

Magicians trick. Watch the hand that I am waving while the other transfers the coin. Skull measurements and the Stock Market? Seriously?

[Kickass Conservative]

Meanwhile, Devout Catholic Nancy Pelosi will be Praying the Rosary on the Stage at the DNC Convention to make it so.

[fireman15]

The democrats are likely actively seeding our nation with coronavirus as we chat.

To adequately protect the nation from the current coronavirus threat we need secure boarders. Because of Democrats we do not have secure boarders. Many of them probably would actively seed the nation with coronavirus given the opportunity, but all they have to do to put our nation at risk is to continue what they already are doing.

[nathanbedford]

You are speaking very reasonably in a lull before a storm but entirely irrelevant to mothers of dying babies and fathers out of work.

The president must not only get in front of this virus, he must be seen to have got in front of this virus.

Here is one of my first warnings from February 10:

Coronavirus is a double-edged threat that can bring down the Trump administration and forfeit any Republican control of Congress if the president does not get in front of this potential plague.

One sharp edge of the threat: massive deaths as the system is first overwhelmed then disintegrates. Steve Bannon now reads reports that the actual death rate is 15%. If this is even remotely true we are looking at a calamity of Spanish flu proportions, given the RO that this virus has achieved in Wuhan.

The second sharp edge: the end of the Trump Economic Era and the creation of a crisis which, once again, the left will not let go to waste. Expect the stock market, which anticipates at least six months in advance, to crash as and when the world's second largest economy appears to be shutting down and in anticipation of a coming recession. Expect our automobile industry to shut down as automakers in Korea already have reportedly done. I have read that the Chinese have ceased importing copper, without which no industrial economy proceeds. One of the foundational pillars of Trump's claim to reelection is the economy.

I believe the president has made a mistake in reporting favorably on his phone call with Pres. Su of China. I believe Homeland Security is not sufficiently reactive to be able to avoid Democrat's slogan that coronavirus was Trump's Hurricane Katrina.

Far better to overreact and look somewhat foolish as the threat is contained than to underreact and explain to grieving mothers and out of work fathers why he did not do more.

[redfreedom]

Predictions, polling, weather reports, climate change, stock market tips = all BS.

Of the gazillion predictions about whatever issued each year, only a small fragment come true.

This scare tactic may cause some to wet their pants, but mine will remain dry.

[FLT-bird]

The usual completely obvious politically motivated fear mongering.

[fuzzylogic]

Agree. Anything that interrupts the supply chain is going to be a drain on the economy. It is definitely an issue of national security, especially for the manufacture of drugs.

[Starboard]

Are these guys selling everything then?

****************

Exactly. If they believe their own forecasts their endowments should be heavily shorting the market.

Instead I bet they are just the opposite.

[Starboard]

That’s what they will be telling when they get back in power. And this time they intend to STAY in power. They are never going to allow us to vote for the likes of Trump again.

[odawg]

“...because a failing economy is the only thing that can deny him reelection.”

A failing economy did not deny Obama his reelection.

I don’t think open border democrats that want to allow diseased persons easy entry into the United States and democrat candidates pining for health care for ALL illegal border jumpers can rally any energy against the Trump administration for a disease that is new on the earth.

[Starcitizen]

Trump warned us. Divest businesses from the brutal Chinese Communist dictatorship and its PLA-run factories.

Time to send Communist China back to pre-Nixon times.

[Starboard]

What is it with these elitist universities?

*****************

No theory is too absurd as long as it supports the liberal agenda in some way.