‘A Powerful Signal of Recessions’ Has Wall Street’s Attention

Re:‘A Powerful Signal of Recessions’ Has Wall Street’s Atten... by mtgx on Monday June 25, 2018 @12:17PM (#17393568)

I think that's mostly irrelevant. 2-3 years prediction would actually be quite good. If you have large investments, 2-3 years would give you a good heads-up for what to do with them before the recession arrives.

The reason I say that point is irrelevant is because what matters most is the signs that a recession is about to happen. Once you have the signs, you pretty much know the recession is inevitable, given the fact that the signs are bad enough that you think the recession could happen in a few short years.

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Re:‘A Powerful Signal of Recessions’ Has Wall Street’s Atten... by Bartweiss on Monday June 25, 2018 @12:53PM (#17393835)

2-3 years is a great prediction if that's a stable window. But if the range is 0-3+ years, it's not clear how much benefit there is. The average growth cycle has been 4.7 years since WWII, so blindly predicting recession within the next 3 years will pan out ~60% of the time.

I guess a solid 0-3 prediction would still allow aggressive positions outside that window, and caution or shorting as you come up towards 3 years since the prediction. But precisely because that would be so effective for investors, I assume it can't be that consistent a signal.

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