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To: mishedlo who wrote (127923)	1/10/2006 11:33:53 PM
From: The Freep	Respond to of 209892

Mish -- can you post a chart from 1970 forward that disproves the claim? I'm fascinated how many of us (self included at times) on the boards ask others to do the work when we could just as easily prove/disprove ourselves. In this case, you seem sure that WLD is wrong. I have no idea, but why can't you just post the chart that shows he is???? the freep

To: mishedlo who wrote (127923)	1/10/2006 11:47:03 PM
From: Win-Lose-Draw	Read Replies (1) \| Respond to of 209892

Care to show a chart going back to say 1970 forward that proves your claim. It's not my claim - it's the claim from the very people who did the study you've been citing!!! Haven't you read Estrella's and Mishkin's work? It's in the probability table every yield-curve blogger on the internet has been quoting for the past month. Simple inversion -> one in four chance of recession is the same thing as saying simple inversion -> three in four chances of the bond market being on drugs ( 1 - 1/4 = 3/4). Estrella put it most succintly a couple of years later: "too many false signals". There is also the huge red flag that their coincident indicator does NOT work for many, many first-world economies. Frankly, that's beyond a red flag, that's a latex slap across both cheeks. BTW, the 1 in 4 from the original study, coupled with the hugely wide windows of their study, amounts to the equivalent of a coin toss. Why? Because the odds of a recession appearing in a random 12-18 month window are - you guessed it - about 1 in 4.