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 ...
There will be no recession before next year.
The CMT yield curve, which most analysts MISuse, has never given less than 9 months notice before a recession, and then it takes another 6 months before the NBER can tell that there’s even been a recession.
With any luck, it will be a two-quarter recession in the middle of next year and the economy will have turned around just in time for the 2022 elections.
The dems will be livid! :)
Yeah, they were better off with reading tea leaves...
I guess MIT’s a party school now.
Sorry, they are right assuming one thing....that a democrat takes reins of this country.
Hard to see how we even avoid a depression, considering what is going on in China, and how it will impact us.
Have they checked the entrails of a chicken yet?
As for the 2008 crash, who could not see that one coming? People just refused to believe it could happen.
In 2006 it was obvious that government manipulation of the housing market and mortgage loans was causing a bubble.
It is only folly to project onto the election the conditions that you see today, assume the very worst conditions such as now exist in China and then analyze the electoral possibilities.
That is not to say that those conditions will exist, I only cite the possibility and further note that the downside is potentially catastrophic but the downside of getting in front now is virtually nil. Lag on this issue at our peril at the voting booth.
A few ounces of prevention now…
Nothing to worry about. When a window is broken, it helps the economy by creating business for the glazier. Doesn’t hurt the economy a bit. Everyone knows that . . .
</sarcasm>
“I would not be surprise if the Fed tries to tip the election in their favor by sabotaging the economy right before the 2020 Presidential Election.”
So how, precisely would this be done? Can you give us a few for instances? Then after that explain this. Since these “scientists” have figured out the markets and can actually forecast recessions in advance, why aren’t they all wildly wealthy? Why are they wasting time with forecasting recessions instead of setting up a business which does financial advising?
All that said, if there is a recession, why would it be tied to this president without a cause attributed to his policy? If we have a recession do you believe voters would want a Socialist or worse in charge?
Actually this belongs in The Onion.
Is this satire? I can’t tell.
A recession is always “on the horizon”. It’s called the business cycle.
Yes “Trump” will be blamed, while the same Trump critics don’t “blame” Trump for the current state of the economy, which seems good, now.
Presidents do not control the long term business cycle, no matter how well they may help on the upside sometimes or hurt on the downside sometimes.
I have been saying for months that the current up markets contained just enough “excessive exuberance” to be generating unsustainable highs, reflecting hopes more than financial realities; and would be brought down no later than 2021 if not earlier.
I was on the one hand hoping the downturn would be in 2021, not sooner, and candidly suggested that Trump drop out, let a Dim win in 2020, so everyone could blame the Dim in office in 2021 for a recession - though it’s seeds would have started long before it happened, just as with the 1st recession under GWBush had its seeds laid during the end of Clinton’s term.
What does the GOP do.
The GOP needs to help the public get off that old horse of blaming AND crediting Presidents for all economic outcomes that merely happen while they have the seat in the White House - the Presidents are not as big a factor as they and the public make them out to be. Long term macro economic and financial factors weigh on or lift the economy most.
You’ve given us half of the equation to prove your claim of inflation being higher than reported, But what about the other half such prices coming down on electronics, gasoline etc?
I live in SC and can buy a gallon of whole milk for $1.00 and just bought a 75 inch smart TV for a tad over $800. My take is strong advances in technology will increase production markedly in the near future and this will keep inflation in check.
MIT Sloan has been reduced to using Phrenology. Up next, Trepanning!
And I know a _lot_ of Sloan graduates ;-)
Sounds like a plank for the democrap party to run on. When it blows up in their face it will truly be over.
Are these the same people who told us about Peak Oil? Glaciers being melted by 2020? Parts of New York being underwater by 2015? The same white liberal ‘elites’ who make a name for themselves by saying something extreme?
Those ‘elites’?
That said, if the current bio-attact becomes a pandemic they might be right. But that’s not what they’re saying - they’re saying George Soros and other democrat scum will work to make it happen because they’re hatred is bottomless.
Be thankful you got any increase. I got an increase, but the larger increase in what is deducted for medicare meant that the net check I get went down. This has been the case for the past 10 years. The incredible shrinking SS "benefit".
Are these the same people who told us about Peak Oil? Glaciers being melted by 2020? Parts of New York being underwater by 2015? The same white liberal ‘elites’ who make a name for themselves by saying something extreme?
Those ‘elites’?
That said, if the current bio-attact becomes a pandemic they might be right. But that’s not what they’re saying - they’re saying George Soros and other democrat scum will work to make it happen because their hatred is bottomless.
What I remember leading up to the 2008 crash was HIGH OIL PRICES, nearly $100 per barrel.
“It is only folly to project onto the election the conditions that you see today...”
That is precisely what you are doing when you speculate the virus may be “Trump’s Katrina” and a failed economy to stop his reelection.
Have any of their predictions ever been right, or are they in the league with the global warming predictors?
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