Tags: Credit | Suisse | Double | Dip | Recession

Credit Suisse: Double-Dip Recession Isn’t in the Cards

By    |   Tuesday, 03 Aug 2010 09:23 AM

The U.S. economy isn’t at risk of a double-dip recession, according to economists at Credit Suisse.

In a report obtained by the Pragmatic Capitalism website, they say that four conditions which have preceded every U.S. recession since 1960 aren’t in place.

• A flat or inverted yield curve. The yield curve in this case measures the difference between three-month Treasury bill yields and 10-year Treasury yields.

• Positive short-term interest rates after adjustment for inflation. In this case, that’s the three-month T-bill yield minus core inflation, which excludes food and energy.

• Above-trend inventory levels.

• Zero growth in the Conference Board index of leading indicators.

There hasn’t been one recession since 1960 when:

• The yield curve was steeper than 0.7 percent, compared to 2.8 percent now;

• Real short-term rates were lower than minus 0.3 percent — now minus 0.8 percent;

• Inventories were more than 3 percent below trend — now 17 percent below;

• The index of leading indicators rose more than 1.6 percent on a six-month basis in the six months before recession — now 3.9 percent.

So, Credit Suisse says: “The preconditions for a double-dip in the U.S. are not in place.”

Yale economist Robert Shiller isn’t so optimistic.

"For me a double dip is another recession before we've healed from this recession,” he told Reuters. “The probability of that kind of double dip is more than 50 percent. I actually expect it."

© 2017 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
StreetTalk
The U.S. economy isn t at risk of a double-dip recession, according to economists at Credit Suisse. In a report obtained by the Pragmatic Capitalism website, they say that four conditions which have preceded every U.S. recession since 1960 aren t in place. • A flat...
Credit,Suisse,Double,Dip,Recession
236
2010-23-03
Tuesday, 03 Aug 2010 09:23 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved