Apparently it will happen sometime within the next 4 qtrs. This is proper economic modelling, not like global warming models, so it's much more sound. And this same model predicted recessions in 1971/80/89/98/07, so it has an excellent track record. And no, I can't give a link because it's private research and copyrighted so I am unable to distribute or reproduce it. But the general gist is: The US economy has dropped below stall speed Corporate bond spreads have widened sharply Falling consumer confidence readings into recession territory Negative terms of trade The only positive is equities, but they could be lagging by going of previous results rather than future forcasts, as they were in 2008. However, there is a small chance that the signals are showing a unique extended period of flat line stagnation which models can't distinguish between. With the Eurozone imploding and the US heading for a double dip recession, the next few years do not look good.
Just tell us what company did the research. I can verify through other means. Are you saying that this probability model was running on an old IBM punchcard machine back in 1970?
I wonder if Obama is working on the speech he will give when he recession decides to double-dip? Maybe he will announce another pivot or something.
To be fair, an economic model could be a couple line algorithm on a cocktail napkin. A computer isn't required. Iterative modeling is where massive computer horsepower comes into play, such as weather. My personal economic model involves the ratio of empty storefronts to total retail storefronts and the percentage of 5 year old or less cars with untended body damage. No napkin required.
4CAST is the company. Pretty widely used amongst the financial sector, though whether the model is theirs or they are simply reporting on it I can't say. And I am assuming that it is more of a mathematical model, so a computer would likely not be required 30+ years ago. The Philly survey released yesterday just hours after my post seems to confirm it. It plunged into recession territory, dropping from +3.2 to -30.7, the lowest in 2 years.
