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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 s

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
  There is absolutely no saying what the likelihood of a recession is. Agreed, unlike every other random event that exists in the universe, recessions are the one thing whose likelyhood cannot possibly be expressed.
  - chrisco255 8y ago
    Problem here is it's not a repeatable experiment. The sample size is 1 world economy.
    - lucisferre 8y ago
      This is a fair comment and I'm not sure why you were downvoted. However it is not a single random event either. A continuous random process with memory would probably be the most appropriate model, and this would be what Vanguard and others use to make estimations of likelihood.
panarky 8y ago
Any student of Taleb should know that "black swan" events are rare, unexpected, extreme outliers. Economic recessions are none of these. They are common, expected, and well within the experience of most adults. Booms and busts have been recurring semi-regularly since the beginning of market economies. While it would be foolish to predict with any great certainty the date or duration of the next downturn, we can say with high confidence that a downturn will occur. It doesn't seem unreasonable to observe that recessions are more likely when the yield curve is flat and valuations are historically high than when the yield curve is steep and valuations are more moderate.

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
There is absolutely no saying what the likelihood of a recession is. Agreed, unlike every other random event that exists in the universe, recessions are the one thing whose likelyhood cannot possibly be expressed.
- chrisco255 8y ago
  Problem here is it's not a repeatable experiment. The sample size is 1 world economy.
  - lucisferre 8y ago
    This is a fair comment and I'm not sure why you were downvoted. However it is not a single random event either. A continuous random process with memory would probably be the most appropriate model, and this would be what Vanguard and others use to make estimations of likelihood.

panarky 8y ago

Any student of Taleb should know that "black swan" events are rare, unexpected, extreme outliers. Economic recessions are none of these. They are common, expected, and well within the experience of most adults. Booms and busts have been recurring semi-regularly since the beginning of market economies. While it would be foolish to predict with any great certainty the date or duration of the next downturn, we can say with high confidence that a downturn will occur. It doesn't seem unreasonable to observe that recessions are more likely when the yield curve is flat and valuations are historically high than when the yield curve is steep and valuations are more moderate.