Posted on 02/16/2020 6:52:19 AM PST by Enlightened1
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%.
(Excerpt) Read more at cnbc.com ...
I find it sad when MIT taints their (well-deserved) reputation with excursions into political gibberish. The omitted caveats underlying this prediction should have prevented them from speaking out in so public a manner.
Note: I am an MIT mathematician. I wrote models for a living, models that had to perform over time periods of a couple months to about a year. And I can see that their work is garbage. Unless this article was written by the shallow end of MIT’s brain pool, they have to see it too.
Dr. Anthony Fauci tells @margbrennan that #Coronavirus is certainly “on the verge” of becoming a pandemic “unless containment is more successful than it is right now.”
http://www.freerepublic.com/focus/f-news/3816993/posts
“That your battle plan? Assume everything will be okay?”
Not a thing I posted hints at that sentiment on my part. I was merely responding to you eagerness to tie it all around Trump’s neck.
I just read a bit about some draconian measures the Chinese government is taking to try to clamp down on the disease.
It may come to that over here, too.
And I did not accuse you of folly, only of being contradictory.
Government can be held accountable for some of what may come, but it was not the Trump administration that turned over the production of antibiotics (over 90 percent) to the Chinese, for example, and no telling what else. Complete insanity.
Come on, any fair reading of my replies leads to only one conclusion: I am trying to protect Trump's neck!
Determine how current market conditions compare to prior recessions.
Never bet on maybes only facts.
This time they got him!
Thank you for this informed explanation, Agatsu77.
Those of us who have worked with statistics in complex systems realize very well that they can be powerful and valuable ... or very misleading.
Examples of the “Very misleading” category of course include all the alarmist global warming garbage spewed out by academia.
How scientific do you have to be in order to measure human skulls? Some sort of tape rule, or calipers, it seems to me, would easily do the trick.
I am medicare age+ and don’t use much gasoline, electronics, clothes, etc. Mostly it is necessities, such as food, healthcare, utilities, property tax, rent, car repairs, etc are where the money goes. And they are all inflating lot faster than 1.6%. Since my car logs only 5000 miles in a year, gasoline is of no consequence. But cars age with time, and I have to buy a new one every 7-8 years. TV’s based on solid state electronics seem to last for ever. I remember my first few color TV’s needed constant replacement of tubes & cards.
There’s a 70% chance that a recession will hit in the next six months,
—-
By definition it can’t. A recession is two consecutive quarters with negative growth. There are not two quarters which will occur and conclude within 6 months.
What kind of car do you drive which needs replacing after 35-40,000 miles? I drive about the same miles as you do and except for normal maintenance which to me is tires and oil changes (I NEVER go back to dealer except for warranty items)I routinely get 150,000 miles on a car and get a new one just because I want to.
I agree healthcare is expensive but I have medicare advantage and being blessed with good health spend almost nothing on Drs and I take no medications as yet.
Property taxes do go up but it all depends on where you live. After living all my life in NJ a MA and paying thru the nose (over $10,000) I moved to SC and live in a brand new home in a beautiful community and pay about $1400 in RE taxes.
My last car was a 2007 Pontiac G5. After it was 9 years old, with only 50,000 miles, I figured it was time to have the coolant changed. Guess what, the dealer’s mechanic left air pockets in the cooling system, and my engine ran 10 degrees hotter and burned out the exhaust valves in just a couple of days of driving. So instead of spending $2750 estimate to repair, I just traded it in.
When I listed items which are inflating, it was not based on my personal situation, it was based on what all 75 million seniors are going through. And yes cost of living here in Florida is so much less than our previous home in Seattle area.
My 80th birthday is coming in just a few weeks, and like you, my medical expenses are just pocket change. I think my good health is due to 30 minutes every other day on a treadmill set 3 degrees up and moving at 22 minutes/mile speed. I follow it up with working 10 lb weights for 15 minutes.
Protect your health with regular exercise!
“I think my good health is due to 30 minutes every other day on a treadmill set 3 degrees up and moving at 22 minutes/mile speed. I follow it up with working 10 lb weights for 15 minutes.
Protect your health with regular exercise!”
I admire you for your exercise regimen and wish I had your patience for more or less stationary exercise (and diet).
My exercise consists of daily walks of at least 2 miles and on this I am truly compulsive not missing a day in over 10 yrs (not kidding) and this means snow, rain you name it. As for diet I eat whatever I want and always have. My favorites are anything Italian and Szechuan Chinese although I don’t dine on those exclusively. I love rich deserts especially Lemon Meringue Pie and or Banana Cream Pie. I’m in bed by 8 PM and up at 3:45 A.M. enjoy a cup of coffee and take my walk.
I’m almost 78 and weigh about 180 @ 6’2”. I used to be 6’4” but shrunk as I got older. Personally I believe fully that good health is in the genes. My wish is that when my time comes I go to bed and never wake up. By the time it has been discovered I’m gone I will have crossed the Rainbow Bridge and be smothered by my 6 German Shepherds who I know will be waiting for me.
From my personal experience, regular exercise will overcome any diet! Keep up the walking routine!
I intend to keep walking. I get my best thinking/organizing done while walk at 5 a.m. and feel as if I have the world to myself.
Plus it is the most beautiful time of the day and I get to see a sunrise almost everyday.
There was a very funny bit in one of Simon R. Green’s books about a proactive phrenologist who would hit people on the head with a hammer to increase various characteristics.
I know what you are talking about. I have vivid memories of teeing off at Forest National golf course before 6am. It is a golf course carved out of a forest preserve in Cook county, IL. It was the baby of county chair George Dunne, himself an avid golfer. Every hole is separated by woods & trees from other holes. There are lots of lakes as well, and very challenging course where no 2 holes look similar, unlike cheap golf courses. The thing was at Forest National, no advance reservations were available, it was strictly first come first served. So our foursome took turns to get in line soon after midnight in cars! When the gates opened, the man walked by each car handing out tickets showing your number in the queue. Then you walked to the club house and purchased any open tee time for that day. And it was only $10 to play 18, which was a bargain even at that time.
We would grab the earliest tee time and the sun was just coming up and birds were busy and greens were coated with dew so you could see the trails of previous putts.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.