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To: Win-Lose-Draw who wrote (127925)	1/11/2006 1:04:38 AM
From: mishedlo	Read Replies (1) \| Respond to of 209892

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. Well that is false Going back to 1940 there have been 11 recessions. Lets see 11/65 which is about 1 in 5.9 not one in 4. Want a different timeframe? 1965 to 2005 Let's see... Hmmm 6 recessions in 40 years 1 in 6.7 years 1980 to 2005 Let's see that is 4 recessions in 25 years I see that as 1 in 6.25 If I cherry pick a timeframe 1970-1983 I can get 4 in 14 years but cherry picking 1961 to 1970 I can get 0 in 9 years So It seems to be about 1 in 6. Q: Is that ramdom or did an inverted yield curve precede every one of them. A: every one of them so that would suggest the correlation is far from a random coin toss. Now the reason I asked for a chart going back to 1960 was because I thought you might or someone might have one. The idea that such a chart is easy to produce is false, at least with any data that I have. BTW my numbers of recessions comes from economagic.com Finally, the notion you proposed earlier that the 10 year yield would have to drop to 3 is just plain silly. We had a recession where the inversion was a mere 11 bps. Mish