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What to look at to predict recession?

farmerjohn1324
Posts: 1
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9/16/2016 2:12:20 AM
Posted: 2 months ago
What do I look at to begin to try to predict a recession?

What are the statistics that I need to first look at?

If home prices are about to drop dramatically or people are going to lose their jobs all of a sudden, what do I need to look at to predict this?

Unsold inventory? Something like that? I know there is more.

Can anyone explain what they know about the cycle to me?
ColeTrain
Posts: 4,292
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9/16/2016 2:51:59 AM
Posted: 2 months ago
At 9/16/2016 2:12:20 AM, farmerjohn1324 wrote:
What do I look at to begin to try to predict a recession?

What are the statistics that I need to first look at?

If home prices are about to drop dramatically or people are going to lose their jobs all of a sudden, what do I need to look at to predict this?

Unsold inventory? Something like that? I know there is more.

Can anyone explain what they know about the cycle to me?

Follow the WSJ. They report on a lot of economics.
[http://www.wsj.com...]
"The right to 360 noscope noobs shall not be infringed!!!" -- tajshar2k
"So, to start off, I've never committed suicide." -- Vaarka
"I eat glue." -- brontoraptor
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ColeTrain
Posts: 4,292
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9/16/2016 3:01:44 AM
Posted: 2 months ago
At 9/16/2016 2:12:20 AM, farmerjohn1324 wrote:
What do I look at to begin to try to predict a recession?

There's a number of variables, and unless you've got an acute understanding of economics and the market in general, it will be very difficult to accurately predict the direction of the economy.

What are the statistics that I need to first look at?

Housing sales and new construction is a good first place to look, but they still lack stability in terms of how steady they are month to month. Perhaps a better metric to judge the state of the economy is automobile sales. If a consumer purchases a new car, it is in all likelihood indicative they are confident in the economy.

If home prices are about to drop dramatically or people are going to lose their jobs all of a sudden, what do I need to look at to predict this?

Like I said, house sales aren't probably the best way to encompass a judgment on the expectation of economic recession. Something more concrete, such as car sales, help better establish a view for the future.

Unsold inventory? Something like that? I know there is more.

This goes along with house and car sales. If people aren't buying, that's not a good sign.

Can anyone explain what they know about the cycle to me?

I hope the above helps, along with the reading I provided. :)
"The right to 360 noscope noobs shall not be infringed!!!" -- tajshar2k
"So, to start off, I've never committed suicide." -- Vaarka
"I eat glue." -- brontoraptor
"I mean, at this rate, I'd argue for a ham sandwich presidency." -- ResponsiblyIrresponsible
"Overthrow Assad, heil jihad." -- 16kadams when trolling in hangout
"Hillary Clinton is not my favorite person ... and her campaign is as inspiring as a bowl of cottage cheese." -- YYW
Snazzy
Posts: 117
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9/18/2016 12:22:08 AM
Posted: 2 months ago
At 9/16/2016 2:12:20 AM, farmerjohn1324 wrote:
What do I look at to begin to try to predict a recession?

What are the statistics that I need to first look at?

If home prices are about to drop dramatically or people are going to lose their jobs all of a sudden, what do I need to look at to predict this?

Unsold inventory? Something like that? I know there is more.

Can anyone explain what they know about the cycle to me?

There is usually some sort crash every 7 years. Some people attribute it to a Shemitah, but I don't know a whole lot about that. I think it's a Jewish thing, and if I'm wrong someone please correct me.
Disclaimer: This post in no way reflects the views of NBC or any of its affiliates.
Raisor
Posts: 4,459
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9/18/2016 3:42:25 PM
Posted: 2 months ago
At 9/16/2016 2:12:20 AM, farmerjohn1324 wrote:
What do I look at to begin to try to predict a recession?

What are the statistics that I need to first look at?

If home prices are about to drop dramatically or people are going to lose their jobs all of a sudden, what do I need to look at to predict this?

Unsold inventory? Something like that? I know there is more.

Can anyone explain what they know about the cycle to me?

If you could predict recessions, you would be a billionaire. It can't be done.

There are long term economic patterns that suggest we are about due for a recession, but it is a world of difference to know we are likely due for a recession in the next few years and "predicting" a recession.
ColeTrain
Posts: 4,292
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9/19/2016 4:27:35 AM
Posted: 2 months ago
At 9/18/2016 3:42:25 PM, Raisor wrote:
At 9/16/2016 2:12:20 AM, farmerjohn1324 wrote:
What do I look at to begin to try to predict a recession?

What are the statistics that I need to first look at?

If home prices are about to drop dramatically or people are going to lose their jobs all of a sudden, what do I need to look at to predict this?

Unsold inventory? Something like that? I know there is more.

Can anyone explain what they know about the cycle to me?

If you could predict recessions, you would be a billionaire. It can't be done.

Exactly.
"The right to 360 noscope noobs shall not be infringed!!!" -- tajshar2k
"So, to start off, I've never committed suicide." -- Vaarka
"I eat glue." -- brontoraptor
"I mean, at this rate, I'd argue for a ham sandwich presidency." -- ResponsiblyIrresponsible
"Overthrow Assad, heil jihad." -- 16kadams when trolling in hangout
"Hillary Clinton is not my favorite person ... and her campaign is as inspiring as a bowl of cottage cheese." -- YYW
twocupcakes
Posts: 2,748
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9/23/2016 1:14:59 AM
Posted: 2 months ago
At 9/16/2016 2:12:20 AM, farmerjohn1324 wrote:
What do I look at to begin to try to predict a recession?

What are the statistics that I need to first look at?

If home prices are about to drop dramatically or people are going to lose their jobs all of a sudden, what do I need to look at to predict this?

Unsold inventory? Something like that? I know there is more.

Can anyone explain what they know about the cycle to me?

A downward sloping yield curve could mean a recession.

Also, when everyone thinks no recession could happen, it means a recession could happen.
ptarkington
Posts: 17
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10/3/2016 8:52:01 AM
Posted: 2 months ago
At 9/16/2016 2:12:20 AM, farmerjohn1324 wrote:
What do I look at to begin to try to predict a recession?

What are the statistics that I need to first look at?

If home prices are about to drop dramatically or people are going to lose their jobs all of a sudden, what do I need to look at to predict this?

Unsold inventory? Something like that? I know there is more.

Can anyone explain what they know about the cycle to me?

Capital Investment is significant as it shows if companies are expanding their production capacity. As was said, things like loan issuance for cars and homes can be significant. Inventory quantities for businesses are significant because it shows consumer expenditures and whether that company will need to cut back on production in the future which can lead to reducing/expanding their employment numbers. Interest rate forecasts are significant because they tell you whether financial products are more or less attractive than investing in capital that produce consumer goods and provide jobs, reduce unemployment, and raise incomes.

The very true and sad answer is, predicting recessions with certainty requires a collection of information that is too great to really fully interpret. It can be done, and has been. The issue is being able to do it consistently with a high degree of certainty. A task which, for anything short of possession of a divine power is near impossible.
"Capitalism is the belief the wickedest of men, will engage in the wickedest of dealings, for the greater good of all of us." -Keynes
oronil
Posts: 4
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11/14/2016 10:20:54 PM
Posted: 2 weeks ago
At 9/16/2016 2:12:20 AM, farmerjohn1324 wrote:
What do I look at to begin to try to predict a recession?

What are the statistics that I need to first look at?

If home prices are about to drop dramatically or people are going to lose their jobs all of a sudden, what do I need to look at to predict this?

Unsold inventory? Something like that? I know there is more.

Can anyone explain what they know about the cycle to me?

The best way to predict a Recession is to take a look at the Yield Curve. If the Yield Curve appears to be inverted (downwards) which is very rare then there is probably going to be a recession soon. Here is a link so you can understand what the Yield Curve is: http://www.investopedia.com....

Obviously there are other economic indicators that can help analyst forecast major recessions but the inverted Yield Curve is a fast, visual a certain indicator of an upcoming recession because it almost never happens, the last time it quickly appeared was before de 2008 Recession.
BillSPrestonEsq
Posts: 134
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11/20/2016 1:52:22 PM
Posted: 2 weeks ago
At 9/16/2016 2:12:20 AM, farmerjohn1324 wrote:
What do I look at to begin to try to predict a recession?

What are the statistics that I need to first look at?

If home prices are about to drop dramatically or people are going to lose their jobs all of a sudden, what do I need to look at to predict this?

Unsold inventory? Something like that? I know there is more.

Can anyone explain what they know about the cycle to me?

The good indicator in my opinion is watching the Fed funds rate. I accept monetarist theory on boom and bust cycles, so naturally this is important to me. it would seem to me by looking at a chart like this https://en.wikipedia.org...
that it's sort of obvious. It's also a very logical outcome of contracting the money supply. It's figuring out when exactly there will be a sharp downturn that is very difficult. But you can tell that once the fed starts really raising interest rates, that the party is over.