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Tuesday, June 28, 2011 12:33:51 PM
U.S. Double Dip: Checklist
* Tuesday, June 28, 2011
Forecasting the probability of a recession involves a high degree of subjectivity, but there are numerous signposts that help make the assessment more objective.
Copper prices have been sliding since February 2011, but are not collapsing. This is consistent with a slowdown, but not contraction, in the world economy. Our Boom-Bust indicator is also pointing to a period of growth moderation, but not contraction. Moreover, even though corporate spreads have backed up along with falling share prices, the spike has been modest and is not consistent with a major flare up in anticipated corporate default rates. Finally, our Recession Gauge suggests the probability of another recession is still low. Overall, a few spots warn of financial and economic vulnerability, but, by and large, most of our market-based signposts are not suggesting the elevated risk of a “double dip.”
http://www.bcaresearch.com/public/story.asp?pre=PRE-20110628.GIF
George.
Click on "In reply to", for Authors past commentaries.
* Tuesday, June 28, 2011
Forecasting the probability of a recession involves a high degree of subjectivity, but there are numerous signposts that help make the assessment more objective.
Copper prices have been sliding since February 2011, but are not collapsing. This is consistent with a slowdown, but not contraction, in the world economy. Our Boom-Bust indicator is also pointing to a period of growth moderation, but not contraction. Moreover, even though corporate spreads have backed up along with falling share prices, the spike has been modest and is not consistent with a major flare up in anticipated corporate default rates. Finally, our Recession Gauge suggests the probability of another recession is still low. Overall, a few spots warn of financial and economic vulnerability, but, by and large, most of our market-based signposts are not suggesting the elevated risk of a “double dip.”
http://www.bcaresearch.com/public/story.asp?pre=PRE-20110628.GIF
George.
Click on "In reply to", for Authors past commentaries.
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