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A signal of recession flashes for first time since 2007

Grokmaster said:
hurry!! Hurry!! Run away from the mueller report left debacle!!!!


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Why would anyone need to do that, brave Sir Robin?

You don't have a clue what's actually in the report, so your statement above just tells everyone that you don't think for yourself, but simply parrot what you've been instructed to parrot.

Why do you want everyone to know that about you?
 
Bullseye said:
Probably not.
' Simple, it means had the GOP continued to hold the House Trump's plans and programs would have passed through the House much easier than if the Dem, whose only goal in life was to destroy Trump was in control.
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The market has been flat far longer than the election, homie.

That lack of faith was happening for at least a year and a half before the election. Care to take a stab at why?
 
noonereal said:
How could we not have a recession after that over stimulating the economy with the NEEDLESS tax cut?

Obie knew how to bring us steady growth. Trump, boom and bust. Like a casino.
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What do you mean "NEEDLESS tax cut"?

Trump will personally save up to $15m under tax bill, analysis finds
Jared Kushner will save up to $12m, while five other members of Trump’s inner circle will also see benefits worth millions of dollars

Trump really needed it. Now the base can pay for it. Welcome to an idiocracy.
 
jnug said:
Ever heard of a Casino where the house didn't win? Welcome to TrumpWorld.
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Yeah, he surely is a great representative of the base.
 
bullseyelqcs said:
The market has been flat far longer than the election, homie.

That lack of faith was happening for at least a year and a half before the election. Care to take a stab at why?
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Better check your figures B.Elqcs. Market is up 35-40% since Trump was elected. Consumer and business optimism has been growing since Trump took office.


Before you make outlandish claims you really ought to check your numbers.
 
Mircea said:
To which history are you referring?

Did you have a recession in 1966?

Nope.

1959?

Nope.

1970?

Nope.

1974?

That's a trick question. You were already in a recession when the yield inverted, so no.

1979?

Nope.

2000?

Nope.

2006?

Nope.

What were you saying?

Historically reliable? I just debunked that.
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You failed to debunk anything. See Post #15
 
Bullseye said:
The fact is that the potential damage the Dems were capable of doing was obvious since election day.
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Which fact is that? That is not a fact. Its an opinion. Get a dictionary.
 
Xelor said:
I think you should check your assertions about the years in which the US did and didn't experience recessions.
-- List of recessions in the US


You should also read the reference materials linked-to below:
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As some of you know, I am a chart analyst in the Stock market. I have been trading the market since 1977 (42 years) and in the 80's I worked for Merrill Lynch, Dean Witter and Prudential-Bache. For Pur-Bache, I was one of the official tech analysts for the South East. For the past 12 years I have been offering a subscription service in which I offer analysis on the stock indexes as well as on stocks that includes specific entry points, objectives, stop loss placements all based on charts. My track record over the past 12 years has shown an average yearly return of 67%, with 10 years being profitable and only 2 years showing a loss.

Having given you my credentials, let me say that since the big drop seen last December, it has been my chart contention that a top to the 10-year uptrend that started in March 2009 has been found and that a downtrend is about to begin.

In the year 2000, the all-time high in the SPX at 1550 was retested successfully 6 months later with a high at 1530 in a reversal month in which the 6-month high was made and a negative reversal occurred (new multi-month high and a red monthly close), which then brought about a 2-year downtrend that cut the index in half with a low of 768 made in 2002. This year, the all-time high in the SPX was made in October at 2940 (6 months ago) and last week the index got up to 2860 and reversed to close below the previous week's close, suggesting the same thing could be occurring now. The end of the month is this Friday and if the SPX closes below last month's close at 2788, the same negative reversal and retest of the all-time high will occur, just as it occurred in the year 2000.

The SPX closed last Friday at 2800 and that is only 12 points above last months close and right now and based on what happened last week, the probabilities favor the bears accomplishing a negative reversal month that would also likely include a successful retest of the all-time high.

This could suggest that the SPX could be heading lower in a downtrend for at least the next 2 years with a potential drop down to the 1450 level, which would in term mean a recession heading into the 2020 election. It would likely mean that Trump would not be able to claim economic success and that is one of the few things that he has been able to claim success about.
 
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jnug said:
Which fact is that? That is not a fact. Its an opinion. Get a dictionary.
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Because the Dems were so quiet about their goals of repealing Trump's tax cuts and getting on with Medicare for All and a plethora of "free" stuff, right. No hints at all. The Dems plans were easier to read than a First Grade reading book.
 
Luckyone said:
As some of you know, I am a chart analyst in the Stock market. I have been trading the market since 1977 (42 years) and in the 80's I worked for Merrill Lynch, Dean Witter and Prudential-Bache. For Pur-Bache, I was one of the official tech analysts for the South East. For the past 12 years I have been offering a subscription service in which I offer analysis on the stock indexes as well as on stocks that includes specific entry points, objectives, stop loss placements all based on charts. My track record over the past 12 years has shown an average yearly return of 67%, with 10 years being profitable and only 2 years showing a loss.

Having given you my credentials, let me say that since the big drop seen last December, it has been my chart contention that a top to the 10-year uptrend that started in March 2009 has been found and that a downtrend is about to begin.

In the year 2000, the all-time high in the SPX at 1550 was retested successfully 6 months later with a high at 1530 in a reversal month in which the 6-month high was made and a negative reversal occurred (new multi-month high and a red monthly close), which then brought about a 2-year downtrend that cut the index in half with a low of 768 made in 2002. This year, the all-time high in the SPX was made in October at 2940 (6 months ago) and last week the index got up to 2860 and reversed to close below the previous week's close, suggesting the same thing could be occurring now. The end of the month is this Friday and if the SPX closes below last month's close at 2788, the same negative reversal and retest of the all-time high will occur, just as it occurred in the year 2000.

The SPX closed last Friday at 2800 and that is only 12 points above last months close and right now and based on what happened last week, the probabilities favor the bears accomplishing a negative reversal month that would also likely include a successful retest of the all-time high.

This could suggest that the SPX could be heading lower in a downtrend for at least the next 2 years with a potential drop down to the 1450 level, which would in term mean a recession heading into the 2020 election. It would likely mean that Trump would not be able to claim economic success and that is one of the few things that he has been able to claim success about.
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Recognizing that stock market indicators have temporally predictive validity up to a one-quarter horizon, I'm unsure what be your fundamental, vis-a-vis the onset of a recession. Your citation of the SPX indicator suggests, given the thread's context and the temporal applicability/credibility of stock market indicators, you're of the mind, based on your SPX analysis, the US economy will enter recession within three months. Are you in fact of the mind that the recession will occur so soon?

The reasons for my uncertainty is twofold:
  • Though the thread's discursive context is that recession is coming, you didn't expressly state you think within three (or even six) months is when it will; however, that seems a clear implication of the analysis you've shared.
  • Stock market values (market price) have their own cycle, to say nothing of regressors, within the national economy's cycle, which is part of what moved Levanon et al, for instance, to aggregate stock market indicators with others in what they refer to as the "leading economic index."

FWIW, you wouldn't be alone in predicting such a near term arrival of recession. Though I cannot say what share of them are as bearish as implied by your SPX remarks, 10% of the National Association for Business Economics' surveyed members think recession will arrive in 2019, a quarter of which ends this week. Most members, however, predict a 2020 or 2021 advent.
 
Xelor said:
Recognizing that stock market indicators have temporally predictive validity up to a one-quarter horizon, I'm unsure what be your fundamental, vis-a-vis the onset of a recession. Your citation of the SPX indicator suggests, given the thread's context and the temporal applicability/credibility of stock market indicators, you're of the mind, based on your SPX analysis, the US economy will enter recession within three months. Are you in fact of the mind that the recession will occur so soon?

The reasons for my uncertainty is twofold:
  • Though the thread's discursive context is that recession is coming, you didn't expressly state you think within three (or even six) months is when it will; however, that seems a clear implication of the analysis you've shared.
  • Stock market values (market price) have their own cycle, to say nothing of regressors, within the national economy's cycle, which is part of what moved Levanon et al, for instance, to aggregate stock market indicators with others in what they refer to as the "leading economic index."

FWIW, you wouldn't be alone in predicting such a near term arrival of recession. Though I cannot say what share of them are as bearish as implied by your SPX remarks, 10% of the National Association for Business Economics' surveyed members think recession will arrive in 2019, a quarter of which ends this week. Most members, however, predict a 2020 or 2021 advent.
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I did not give any time frame on a recession starting. What I did say is that a downtrend might be starting and even that would not be confirmed until December's lows are broken. As such, no is my answer as far as a recession starting in 3 months. It will probably take about 1 year before such a word is used.

Nonetheless, traders in the market are always anticipating what happens 9 months down the line and they may start to anticipate it now but not become a reality for 9 to 12 months.

In my opinion, and though I am not alone in this as there are many analysts that disagree, what little I know about the fundamentals is that the entire world economy is slowing down and that will also affect us. In addition, nothing is being done here and anywhere, to prevent a slow down. The trade war is certainly one of the culprits but we also have been in a growth period that has lasted 10 years and that is rare of itself. Usually growth and recessionary periods last about 5 years so it is certainly time for a recessionary period to occur.

In addition, if there was someone else in the presidency that would be doing things to stimulate more growth, such as an infrastructure plan and at the same time cutting debt, the recession coming could be delayed. Nonetheless, this president tries to do everything with words and words don't mean anything when it comes to actual requirements to stimulate growth by the populace. Feeding the rich, for example, does not stimulate growth given that it is the middle and lower classes that need to generate money to buy product and keep profits coming in. The tax cut that helped mostly the rich is not enough to help the middle class keep buying, especially when those tax cuts expire in 6 years and things will be worse than they were before the tax cut.

This is what traders and investors are seeing and expecting.
 
Rogue Valley said:
You failed to debunk anything. See Post #15
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Post #15 is a massive fail.

Xelor said:
I think you should check your assertions about the years in which the US did and didn't experience recessions.
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So you quote Pukipedia? My, what a scholar you are.

You did not have recessions in the years I listed and NBER proves there weren't any recessions. Any knowledgeable and reputable poster would use NBER here:

https://www.nber.org/cycles.html
 
Mircea said:
Post #15 is a massive fail.



So you quote Pukipedia? My, what a scholar you are.

You did not have recessions in the years I listed and NBER proves there weren't any recessions. Any knowledgeable and reputable poster would use NBER here:

https://www.nber.org/cycles.html
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Red:

First:
First, smart and knowledgeable people know better than to attack the source of information/data. Such people don't do that because they know an assertion's accuracy, most especially assertions about observable and measurable historical phenomena, is existential.


Second:
Regardless of the source one cites -- Wiki, NBER, or another one -- anyone who expects to be seen as credible would at least read it, as well as understand what's actually being discussed.


Third:
The inverted yield curve indicator predicts recession will occur within two years. (Had you bothered to read the reference materials to which I linked in my post to which your first above quoted post is a reply, you'd know that.) That doesn't mean "two years from the inversion's initiation," it means sometime during the two years following the inversion. Also, the inversion does not predict the end of a recession; it foretells the arrival of one.

From Yield Curve Inversions Since 1968



032519_SP%201968%20YC%20Inversion.png



032519_%20SP%201978%201980%20YC%20Inversions.png



032519_%20SP%201978%201980%20YC%20Inversions.png

And what did you post? This:

Mircea said:
To which history are you referring?

Did you have a recession in [...]

1970? Nope.

1974?

That's a trick question. You were already in a recession when the yield inverted, so no.

1979? Nope.

[...]

...What were you saying?

Historically reliable? I just debunked that.
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And what does the NBER say? It says the a business cycle peaked in December 1969 whereafter it declined (entered recession) to its nadir, which it reached in November 1970. Thus for most of 1970, we were in a recession.

Given germane range of temporal applicability of the inverted yield curve harbinger, the thing to look for is whether an economy entered a recession two years or less after the inversion.
  • Was there, two years or less after the Dec 1968 inversion, a recession? Yes.
  • Was there, two years or less after the April 1973 inversion, a recession? Yes.
  • Was there, two years or less after the Nov 1978 inversion, a recession? Yes.



Aside:
  • For readers who don't know or hadn't already deduced as much:

    "An inverted yield curve is an interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the same credit quality."

    To envision what that means, think of long term (LTR) and short term (STR) bond yields plotted in a Cartesian plane where the x-axis is time and the y-axis is yield rates. When the curve showing long term yield rates over time crosses the one showing short term yield rates, the yield curve is said to be inverted.

    One can add a third curve to the chart, the bond yield curve itself, which is merely the difference (or "spread," if one prefers the jargon of finance) between LTR and STR (y = LTR - STR), over time. Whereas the LTR and STR curves will move up and down in the first quadrant, the bond yield curve line will move back and forth between the first and fourth quadrant. One can see that depicted in the chart in the OP.
 
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