Lot’s of us think that we’re STILL in recession [ it ended June 2009 ] and many of us don’t see anything getting better any time soon.
But the good news is that it will get better, slowly, and it almost certainly won’t get worse in 2011.
Mark Perry turned me onto an interesting release by the NY Fed. Basically what they are doing is publishing what they feel is the chance of recession in the next 12 months.
Now, while they offer what they feel is the chance, it seems that whenever the value hits 40%, we land in recession. Further, there has even been a recession with that value as low as 30%. Clearly they are understating the chances.
So, I have dug a little deeper into their data and identified what I call stresses within the system.
- If the 6 month average is 25% or more, that is a stress.
- If the 3 month average is 25% or more, that is a stress.
- If the value is rising 6 out of 10 months, that is a stress.
- If the value is rising 2 out of 4 months, that is a stress.
Using these stresses, I get a little bit better of a picture. Still not perfect, but better.
So, with that said, there is only 0.214%. Not even 1%. Further, not one single stress I watch has been triggered.
However, when people are betting real money, they are saying that we have a 16% chance: