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One of the surest signs to a recession one can find.
by gigatexal 7y ago
One of the surest signs to a recession one can find.
- eloff 7y agoIt's right about half the time historically iirc. Which is better than most indicators, but still just flipping a coin.
- odonnellryan 7y agoHasn't it been right 7/8 of the last recessions?
- gravelc 7y agoAs the joke often goes, it predicted 14 of the last 8 recessions.
- TheCondor 7y agoIs that for just inversions? I thought the indicator was that it needed to invert for a full quarter.
- anonymousJim12 7y agoHas it ever inverted but then a near term recession never followed?
- gzu 7y agoNo https://fred.stlouisfed.org/series/T10Y2Y/ https://fred.stlouisfed.org/series/T10Y2Y/
- freehunter 7y agoWe had one close call in the mid 90s, about 1995-1996. I don't think it actually inverted but it was within less than one percentage point away from inverting. Luckily, 1995-1996 was the start of the Dotcom bubble, which gave us a few more years before the recession of 2001 hit. We could stave off the coming recession if we had another Dotcom-type bubble, but market corrections are inevitable so it would just be a delay.
- mrep 7y ago> We could stave off the coming recession if we had another Dotcom-type bubble, but market corrections are inevitable so it would just be a delay. Recessions aren't some magical part of economies that are required to happen every so often. As freddie_mercury pointed out yesterday [0], Australia, has gone 27 years without a recession, Japan had no recession from 1961-1993 (32 years), and the Netherlands had no recession from 1981-2008 (27 years). [0]: https://news.ycombinator.com/item?id=20692043 https://news.ycombinator.com/item?id=20692043
- freehunter 7y agoIf there are bubbles, there will be corrections. And the more "bubbly" the economy, the more often there will be corrections. It's hard to quote other, wildly different economies as examples of why market corrections are not inevitable, but Australia, Japan, and Netherlands are not the same economies as the US. >Recessions aren't some magical part of economies that are required to happen every so often Correct, but they do seem to be some magical part of America's economy that is required to happen as often as bubbles happen. They're not regular and you can't set your watch to them, but as sure as there is expansion, there will be contraction. And the bigger the expansion, the bigger the contraction.
- frankbreetz 7y ago"As recession signals go, this so-called inversion in the yield curve has a solid track record as a predictor of recessions. But it can take as long as two years for a recession to follow a yield curve inversion." https://www.reuters.com/article/us-usa-economy-watchlist-graphic/predicting-the-next-u-s-recession-idUSKCN1V31JE https://www.reuters.com/article/us-usa-economy-watchlist-gra...
- SketchySeaBeast 7y agoJust in time for someone else to come into power and have to deal with the mess.
- doubleunplussed 7y agoIf it's so sure, why isn't it priced in already? I can't help but notice my investments are only down a couple of percent recently, well within the range of normal fluctuations.