To: Henry J Costanzo who wrote (123710 ) 9/6/2005 9:54:41 PM From: skinowski Respond to Interesting FA read from John Hussman:Recession risk shows up in more subtle measures that tell you about internal turbulence. Among the most important are credit spreads (the difference between the yield on risky corporate debt and default free Treasuries). After a few months of relative stability, these widened significantly last week. Other indicators include the ISM figures, which showed a substantial drop in production and new orders last month. The Purchasing Managers Index dropped to 53.6 not even including the impact of Katrina. Stock prices are also important, especially when we observe a lack of uniformity. As I've noted in recent weeks, we're seeing increasing evidence of large cap distribution, with growing dispersion in the market action of various industry and capitalization groups. Finally, flat or inverted yield curves are typically signals of economic risk, particularly when the yield curve is rising at the short end. hussmanfunds.com
