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>> Vanguard tracks data to predict the likelihood of a recession at certain points in the future. Having read nearly the entire literary output of one Nassim T

>> Vanguard tracks data to predict the likelihood of a recession at certain points in the future. Having read nearly the entire literary output of one Nassim Taleb, I'd like to see the results of past predictions on this one. I'm pretty sure it will show that this "tracking" carries no actual predictive power.

Apocryphon 8y ago
Aren't we near the end of a 7-10 year cycle regardless?
- h4b4n3r0 8y ago
  “Cycle” is a myth. There is no guarantee that any pattern you have seen in the past will repeat in any shape or form in the future.
  - mistermann 8y ago
    That it's not a guarantee of the future in no way nullifies the existence of business cycles. They exist, or they do not.
    - rosser 8y ago
      The presence of a cycle and its periodicity or predictability are not remotely the same thing.
      - mistermann 8y ago
        I completely agree, although maybe it wasn't clear.
- nur0n 8y ago
  Based on historical data, how accurate would it be to say that a recession happens every 7-10 years? What percent of recessions(for some definition of recession) follow this pattern? Are there different patterns for different kinds of economic/political environments? Does anyone know of a good analysis that a layman could understand?
  - dragonwriter 8y ago
    > Based on historical data, how accurate would it be to say that a recession happens every 7-10 years? Starting with the Great Recession and working backwards to and including the Great Depression, the gap from the previous US recession for each recession has been: 6y, 1 m 10y 7y, 8m 1y 4y, 10m 3y 8y, 10m 2y 3y, 3m 3y, 9m 3y, 1m 6y, 8m 4y, 2m 1y, 9m Only 3 of 14 of those gaps were in the 7-10 year range, and all of the rest are shorter.
curuinor 8y ago
By the very nature of vanguard, except for its tiny, tiny managed funds, vanguard doesn't ever do shit with this knowledge. Just continues following the index.
- tanderson92 8y ago
  Over 25% of Vanguard AUM are not in indexed products.
whack 8y ago
Didn't Taleb himself predict the past recession, although using very different methodologies. https://www.globalresearch.ca/risk-experts-who-predicted-2008-financial-crash-believe-gmos-to-be-riskier-than-2008-crash/5465011 https://www.globalresearch.ca/risk-experts-who-predicted-200...
- redisman 8y ago
  Anyone who goes into the prediction game is gonna lose. Funny how these big name economist never seem to learn.
  - h4b4n3r0 8y ago
    Taleb says exactly this in nearly every chapter.
panarky 8y ago
They're not making a prediction. "We don’t make any actual predictions about where things are going next month or, in the markets, next year. The stock market could rise a lot, short-term. We don’t know." Vanguard's model says the probability of a recession by late 2020 is between 30% and 40%, which is higher than normal. That also means that the probability of no recession by late 2020 is between 60% and 70%, which is lower than normal.
- h4b4n3r0 8y ago
  I don’t know how to say this any more plainly: anyone who predicts such things is 100% full of shit. It’s a random process. Anyone able to predict this with a significant degree of certainty would quickly become a multi-trillionaire. Insanely huge financial institutions employing thousands of PhDs were not able to predict the last big one and many of them would have collapsed without government’s help. What makes you think anyone has the foggiest clue as to the timing and severity of the next black swan event?
  - katzgrau 8y ago
    Agreed. There are an unlimited number of variables that cannot all be accounted for, and even the most insignificant of them have the ability impact the future in dramatic ways. There is absolutely no saying what the likelihood of a recession is.
    - lucisferre 8y ago
      Both of you seem to be confusing estimating the likelihood of a random event with predicting the event’a occurrence. These are not remotely the same.
      - h4b4n3r0 8y ago
        No, it’s the downvoters who are confused. :-)
    - st26 8y ago
aptwebapps 8y ago
>> In recent years, the company has put the probability of a recession six months out at close to 10 percent. Now, Vanguard says the chances of one by late 2020 are between 30 and 40 percent. That’s Vanguard’s highest-ever estimate for that time frame, Mr. Davis said. (A six-month forecast reported a greater than 40 percent probability before the recession that started in December 2007.) The parenthetical was the interesting part to me. I would love to see some long-term data on their forecasts.

Apocryphon 8y ago

Aren't we near the end of a 7-10 year cycle regardless?

h4b4n3r0 8y ago
“Cycle” is a myth. There is no guarantee that any pattern you have seen in the past will repeat in any shape or form in the future.
- mistermann 8y ago
  That it's not a guarantee of the future in no way nullifies the existence of business cycles. They exist, or they do not.
  - rosser 8y ago
    The presence of a cycle and its periodicity or predictability are not remotely the same thing.
    - mistermann 8y ago
      I completely agree, although maybe it wasn't clear.
nur0n 8y ago
Based on historical data, how accurate would it be to say that a recession happens every 7-10 years? What percent of recessions(for some definition of recession) follow this pattern? Are there different patterns for different kinds of economic/political environments? Does anyone know of a good analysis that a layman could understand?
- dragonwriter 8y ago
  > Based on historical data, how accurate would it be to say that a recession happens every 7-10 years? Starting with the Great Recession and working backwards to and including the Great Depression, the gap from the previous US recession for each recession has been: 6y, 1 m 10y 7y, 8m 1y 4y, 10m 3y 8y, 10m 2y 3y, 3m 3y, 9m 3y, 1m 6y, 8m 4y, 2m 1y, 9m Only 3 of 14 of those gaps were in the 7-10 year range, and all of the rest are shorter.

curuinor 8y ago

By the very nature of vanguard, except for its tiny, tiny managed funds, vanguard doesn't ever do shit with this knowledge. Just continues following the index.

tanderson92 8y ago
Over 25% of Vanguard AUM are not in indexed products.

whack 8y ago

Didn't Taleb himself predict the past recession, although using very different methodologies. https://www.globalresearch.ca/risk-experts-who-predicted-2008-financial-crash-believe-gmos-to-be-riskier-than-2008-crash/5465011 https://www.globalresearch.ca/risk-experts-who-predicted-200...

redisman 8y ago
Anyone who goes into the prediction game is gonna lose. Funny how these big name economist never seem to learn.
- h4b4n3r0 8y ago
  Taleb says exactly this in nearly every chapter.

panarky 8y ago

They're not making a prediction. "We don’t make any actual predictions about where things are going next month or, in the markets, next year. The stock market could rise a lot, short-term. We don’t know." Vanguard's model says the probability of a recession by late 2020 is between 30% and 40%, which is higher than normal. That also means that the probability of no recession by late 2020 is between 60% and 70%, which is lower than normal.

h4b4n3r0 8y ago
I don’t know how to say this any more plainly: anyone who predicts such things is 100% full of shit. It’s a random process. Anyone able to predict this with a significant degree of certainty would quickly become a multi-trillionaire. Insanely huge financial institutions employing thousands of PhDs were not able to predict the last big one and many of them would have collapsed without government’s help. What makes you think anyone has the foggiest clue as to the timing and severity of the next black swan event?
- katzgrau 8y ago
  Agreed. There are an unlimited number of variables that cannot all be accounted for, and even the most insignificant of them have the ability impact the future in dramatic ways. There is absolutely no saying what the likelihood of a recession is.
  - lucisferre 8y ago
    Both of you seem to be confusing estimating the likelihood of a random event with predicting the event’a occurrence. These are not remotely the same.
    - h4b4n3r0 8y ago
      No, it’s the downvoters who are confused. :-)
  - st26 8y ago

aptwebapps 8y ago

>> In recent years, the company has put the probability of a recession six months out at close to 10 percent. Now, Vanguard says the chances of one by late 2020 are between 30 and 40 percent. That’s Vanguard’s highest-ever estimate for that time frame, Mr. Davis said. (A six-month forecast reported a greater than 40 percent probability before the recession that started in December 2007.) The parenthetical was the interesting part to me. I would love to see some long-term data on their forecasts.