Quote:
Originally Posted by Shazam
The inverted yield curve and a recession following is a recent discovery (post-2008). That is, maybe other people knew about it but it was not as well known as it is now.
It could just be coincidence.
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I disagree though. The inverted yield curve isn’t new at all, and the curve has inverted and we haven’t fallen into recession every time. To me if you get false positives, it’s virtually useless, because there’s no point. You’re back to having to decide based on other things anyway.
I find these “indicators” or whatever really interesting. There are the seasonal methods with the most well known being “sell in May and go away”, the January Effect. One guy wrote a book called the October Method and the list goes on. Then you have the lipstick indicator, white paint, ladies hems and of course the Superbowl indicator. I’m definitely missing some, and as interesting as they all can be and fun to check out, none work. I’ve read some scholarly research on these topics (which I mainly read thinking “they got paid to check this?!) and the conclusions were basically that sometimes it works, and maybe a majority of the time but not always.