passing thru writes:
i have seen that "predictions about the future" quote attributed to many people, from neils bohr to mark twain.
passing thru | 03.28.05 - 1:12 pm | #

Fred Boness writes:
Yogi Berra.
Fred Boness | 03.28.05 - 1:22 pm | #

tea writes:
I would'nt put so much stock into the new home sales in february or any other housing data in winter. The data are seasonally adjusted, true. But because the adjustments are large in the winter months, small distortions tend to get magnified a lot.
Also, in looking at trends I would take the South out of the picture and look at home sales. They have been trending down over the last 6 months.
tea | 03.28.05 - 1:30 pm | #

Calculated Risk writes:
The "predictions" quote is (I believe) incorrectly attributed to Berra (although it sounds like something he would say!).

Lamport had the same problem with the English language as Berra, with equally funny results.
Calculated Risk | Homepage | 03.28.05 - 1:30 pm | #

Movie Guy writes:
Another excellent post.

"...my thoughts are free and worth every penny..."

True!
Movie Guy | 03.28.05 - 2:17 pm | #

Movie Guy writes:
I am hopeful that you will keep working through and updating the key indicators. Perhaps your fine effort will encourage blog economists and others to participate in this valuable exercise.

I wonder if it would help if a select group of past recessions' indicator charts could be stacked side by side along with the present data indicator charts. Identifying when the recessions actually began would also help.

I am keeping an eye on U6 unemployment (from alternate measurement under BLS). If it rises significantly, I would be led to believe that we're not far from a recession. But I have never compared previous measures of U6.

Same story for consumer credit totals. As the interest rates rise, will consumer credit levels drop quickly or will there be a slow pullback? I expect slow (excluding mortgages), followed by large scale spikes and then another declining period. I am assuming that any spikes may represent the recession. Of course, I don't know the facts on this point.

Good luck with your analysis.

Many thanks.
Movie Guy | 03.28.05 - 2:34 pm | #

Calculated Risk writes:
MG, thanks for the comments. I checked the U6 unemployment rate - and the BLS only started reporting it in '94 (same with U4 and U5). Good idea, but we can't back test it.

Best Regards!
Calculated Risk | Homepage | 03.28.05 - 3:14 pm | #

JWC writes:
Awesome, I love your charts. Makes things so much easier to understand.

Just what I need, another blog I have to look at every day!!!

Grandma Jo
JWC | 03.28.05 - 4:05 pm | #

David Bennett writes:
Some people at Forbes have also jumped into your game.

http://www.forbes.com/2005/03/ 24..._inl_print.html

I believe there are a lot of pressures that sooner or latter assert themselves, there is a somewhat mechanistic quality to markets.

To paraphrase Keynes this doesn't mean that markets can't remain irrational longer than we think they can, or Buffet: we can have a sense of what will happen without knowing when.

Real estate and stocks seem to me over valued. The "recovery" anemic and artificial, the level of debt exceedingly high coming off a recession. Real fears of inflation with oil and falling dollars, a fed constrained in how much interest raising it can employ without crashing the fragile situation.

Overall I would say that it indicates a failure of most political voices, few if any of our leaders have expressed concern over the situation.
David Bennett | 03.28.05 - 4:30 pm | #

Barry Ritholtz writes:
ECRI (apparently) has a good record forecasting econ turns.

Also, check out Jim Stack's recent recession alert:
http://www.forbes.com/2005/03/ 24..._inl_print.html
Barry Ritholtz | Homepage | 03.28.05 - 5:18 pm | #

battlepanda writes:
I don't know when the next recession will come, but I have a feeling that when it does, it's gonna be a doozy.
battlepanda | 03.28.05 - 6:23 pm | #

Elaine Supkis writes:
Ross Perot won nearly a third of the vote by going on TV and using graphs and charts to talk about the deficts, trade and budget.

Instead of being cautious after balancing the budget, people voted narrowly (Gore won the popular vote) (ahem, a powerful minority wanted to screw the pooch)--put into power a man who told them, "Let's party, dudes" and they collectively threw caution to the winds and went crazy and fixing this mess is going to be close to Herculean.
Elaine Supkis | Homepage | 03.28.05 - 8:20 pm | #

Anonymous writes:
pretty grim data http:// housingbubble.blogspot.co...statistics.html
Anonymous | 03.28.05 - 9:37 pm | #

The Nattering Naybob writes:
Its tough to make predictions, especially about the future....

a Yogism, Yogi Berra
The Nattering Naybob | Homepage | 03.28.05 - 10:48 pm | #

Calculated Risk writes:
Lamport.

Best Regards.
Calculated Risk | Homepage | 03.28.05 - 11:23 pm | #

cm writes:
Movie guy: Never forget that to the extent that numerical indicators are being "managed" (in lieu of the thing being measured), they get decorrelated from the underlying reality. watching them for their (prior) meaning may then become an exercise in futility.

In other words, once word gets out that an indicator means this or that, that usually dilutes it substantially. In my profession (software R&D) that can be seen by "bug count" and other quality indicators -- once something gets measured (and coupled to somebody's incentives), the measure changes its meaning.
cm | 03.29.05 - 1:59 am | #

spencer writes:
I have a thesis that it is impossible for the consensus to forecast a recession.

Recessions occur when the business community makes a poor forecast of final demand and as a consequence ends up with excess inventories or excess capital spending.

So to forecast a recession you have to forecast that the consensus forecast, or business expectations will be wrong. So for the consensus to forecast a recession the consensus has to forecast that the consensus forecast will be wrong.

Think about it.

Moreover, if you try to force one of the major economic models like DRI to generate a recession it is almost impossible. It is because the model has to forecast that firms will deliberately have an unintentional
build of unwanted inventories. No model will create this situation without major add factors.

Economist almost always forecast a major slowdown before every recession, but the consensus never actually forecast a recession because they never forecast an unwanted build of excess inventories or capital spending.
spencer | 03.29.05 - 8:33 pm | #

Calculated Risk writes:
spencer, excellent points! In my case, I am willing to go against the consensus. I don't think a recession is imminent (next 6 months), but I'm starting to watch for the signs. Like you, when the next recession hits, I fully expect the consensus to be that everything is OK, or maybe for a mild slow down.

Heck, a slow down is the consensus right now.

Best Regards!
Calculated Risk | Homepage | 03.29.05 - 8:58 pm | #

DOR writes:
Spencer,
My thesis is that it is impossible for financial sector economists to forecast a recession.

Qualifications required to be a financial sector economist:

(a) optimism;

(b) some knowledge about economics.


(a) is "need to have; (b) is "nice to have".
.
DOR | 03.30.05 - 10:11 pm | #

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real estate | Homepage | 05.02.06 - 7:10 pm | #

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rkmgoi | Homepage | 08.29.07 - 7:07 pm | #

Doug writes:
Today is March 21, 2008. I have watched this bomb tick since 2002. Historical comparisons are being made, right or wrong, between today's situation --- rising commodities (inflation), falling equities and working capital (recession), decreased consumer confidence (long-predicted housing bust) --- and the 1990-1 recession. This blog provides an valuable snapshot of that recession, the time this blog started, and the moment in which I write. To the future reader: Please document what happened next.
Doug | 03.21.08 - 9:23 am | #