End of Recession in 2009

[GG]

http://seekingalpha.com/article/118339-end-of-the-recession-in-2009

When will the recession end? Sometime mid-year, according to Fed models that have accurately predicted the past 7 recessions

According to the New York Fed, "Research beginning in the late 1980s documents the empirical regularity that the slope of the yield curve is a reliable predictor of future real economic activity."

Monday, the New York Fed released its latest "Probability of U.S. Recession Predicted by Treasury Spread," with data through January 2009 and its recession probability forecast through 2010 (see chart above, click to enlarge). The NY Fed's model uses the difference between 10-year and 3-month Treasury rates to calculate the probability of a recession in the United States twelve months ahead (see chart below of the Treasury spread).

The Fed's data show that the recession probability peaked during the October 2007 to April 2008 period at around 35-40%, and has been declining since then to less than 10% for December 2008 and January 2009. Looking forward through 2009, the Fed's model shows a recession probability of only about 1% on average through the next 12 months, and below 1% by the end of the year (.82% by January 2010). The Treasury spread has been above 2% for the last 11 months, a pattern consistent with the economic recoveries after the 1990-1991 and 2001 recessions.

Here's a graph above with a "closer look" at the recession probabilities from January 2000 to January 2010 (data here). The shaded area on the left is the 2001 recession (March-November) and the right shaded area is the period from when the current recession started (Dec. 2007) and January 2009.

As the data and graph suggest, there is almost no possibility that the economy will be in recession by the middle of this year according to the Fed's model, which has accurately predicted the last 7 recessions, back to 1960.

Bottom Line: The New York Fed's Treasury spread model predicts the end of the recession in 2009.

[Hometown]

Thank God.  Things weren't so great anyway then we got this nasty surprise.  I'll take a Recession ending in 2009 over a Depression any day.  When will the stock market come back?  The market looks ahead so maybe there will be some improvement there in 2009.

If Tulsa lags I would quess we are going to see some further slumping here unless energy prices get back on track very soon.  What a pain.

[sgrizzle]

Can we call off the bailouts then?

[Hometown]

If we don't have any more Republican Presidents for a while.

[MDepr2007]

Anyone connected to the markets is not truely believable at this time. The market is tanking and more people are starting to panic, causing them to pull out. Stories will come out to try to spin a positive (which might be a good thing if it worked) to save their azz