Posted on 05/18/2011 6:45:13 AM PDT by blam
We Won't Get A Recession Until 2013, Unless One Of These Shocks Happens
Gregory White
May 18, 2011, 7:45 AM
The U.S. economy is set to continue growing through the end of 2013 unless a shock sends us into recession early, according to Societe Generale's Aneta Markowska.
Markowska cites four factors for her long-term outlook on U.S. growth.
The index is comprised of four leading indicators (nonfinancial profit margins, the ISM, equity returns and the yield curve) which are regressed on NBER cycle dates using a probit model. Combined, those indicators currently suggest near-zero odds that the US will experience a recession in the next 12 months. Of course, all models oversimplify reality and we take the results with a grain of salt. We interpret it to mean that probability of a home-grown recession is indeed very low and the risks are largely external.
She also feels that, because of the high level of unemployment in the U.S. right now, a recession may not actually come until 2014, because the slack labor in the market will prevent wage pressures from hitting businesses.
There are, however, some threats lurking. Markowska cites the U.S. fiscal debt crisis and rising commodity prices as two events that could speed up the downturn. We'd add a Chinese hard landing or the European sovereign debt crisis to the list of potential recession accelerators.
Note that right now, the chance of a recession in the next 12-months is rock bottom. But also, previous experience shows that probability can quickly change.
(Excerpt) Read more at businessinsider.com ...
A likely middle-east war this summer will do the trick.
I tend to believe this a lot more than I do some of the crackpot ridiculous “the sky is falling” garbage that see I posted on here.
I take this to mean that since we're now in a depression, a recession would be an improvement.
Not sure which “sky is falling” stuff you are talking about, but academic graphs based on historical trends also miss the point: that we’ve never had a government and several generations of Americans so staggeringly ignorant of and hostile towards business - and maybe never had so many business owners and entrepreneurs so scared or fed up that they are “on strike.”
Obama has successfully done a lot of “fundamental transforming” of this country - meaning the country upon which all of this wonderful academic study is done is irrelevant. New lay of the land now, and it ain’t a good one.
That chart doesn’t look that impressive to me as a predictor. 50% chance before the “great recession”? Plenty of over 50% indicators that were wrong. Just from the chart, 1-2 years growth after a recession is a slam dunk.
Seems pretty weak.
I was thinking the same thing. While it’s probably not as bad as some predict, it’s definately not as “ok” as others predict.
Société Générale started as a bank in France. It’s a global financial services company. Markowska’s report does not include the consumer effort to avoid giving support or the ongoing QE desperations, but it’s good that her business’ clients are believing what they see in it.
There will be rising competition, when the time is right.
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