About Dwaine Van Vuuren

Dwaine has a Bachelor of Science honors degree and is a full-time trader and investor. His passion for numbers and keen research & analytic ability has helped grow RecessionALERT into a company used by hundreds of hedge funds, brokerage firms and financial advisers around the world.
Author Archive | Dwaine Van Vuuren

Estimating recession probabilities using Gross Domestic Product & Income

Download article as PDF ” The NBER does not define a recession in terms of two consecutive quarters of decline in real GDP. Rather, a recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail […]

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Coincident data not playing nice with the bears

Download article as PDF Over the last two months we had Real Retail Sales, Industrial Production, Personal Incomes and Non-Farm payrolls all pushing new expansion highs. The only data not in for December now is Real Incomes. In addition we have noted upward revisions as opposed to the downward revisions promised by the recession-is-here camp. […]

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Structural distortions hazardous to recession forecasting

Download article as PDF Very few people realise just how close we came to a recession in the past 12 months, purely on an economic indicators perspective and not counting external risks such as the Fiscal Cliff debate. However, many traditional long leading indicators based on for example the yield curve and the unemployment rate, […]

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Launch of new Recession Analytics Tool

Download article as PDF We are pleased to announce the revamp of our historical time-series data file, which is published quarterly, with the following new additions: Addition of  Labor Market Index historical data Addition of Long Leading Index historical data Addition of RAVI historical data for 1/2/3/5/10 year forecasts New analytic tool & charting visualisations RFE+ which […]

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100% Recession risks – a follow on

Download article as PDF Professor Piger updated his recession probability model that caused so much attention early November (See “Debunking 100% probability of recession“). As we forecast last month, the probability index undertook a “revision” of epic proportions as displayed below (01-Dec-12 vintage): This is a classic real-world rendition as to why you cannot make […]

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On the cliff’s edge

Download article as PDF Industrial Production was slowed by hurricane Sandy and its growth rate is now in recession territory. Bear in mind, for our “NBER Recession Model of last resort” we use a much faster smoothed growth here than the standard 12-month rate of change and therefore many other studies you observe on Industrial […]

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Debunking 100% probabilities of recession calls

Download article as PDF The latest buzz on the internet is a FRED chart published by the Federal Reserve of St. Louis of Chauvet and Piger’s dynamic factor Markov recession probability index. Its currently jumped from less than 1% to 18%. Inferences are being made that recessions have always been underway or occurred very shortly […]

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On the brink of Global Recession

Download article as PDF The Global Economy is on the brink of a recession with 58% of 29 OECD countries experiencing business cycle contractions. The chart below shows OECD defined global contractions (grey shaded areas) together with the percentage of 29 OECD member countries experiencing slowdowns. It is evident that whenever 50% or more of […]

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Retail sales data not supportive of recession

Download article as PDF The September RETAIL SALES component (RSAFS) of the NBER Recession Model was in today. It surprised to the upside as well as had an upward revision on the prior month. For the most part, this series has been revised downwards over time of late, but this does not necessarily equate to […]

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Effects of Revisions on Recession Forecasting

Download article as PDF Economic time series used in measuring business cycles and forecasting recessions are subject to revisions and re-benchmarking. Over time, more up-to-date and accurate data become available and time series are revised to reflect the updates. Some economic time series are subject to more drastic revisions than others. For example, the unemployment […]

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50 State Co-incident update : No Recession

Download article as PDF A while back we published an interesting project (Predicting US Recessions with State co-incident data) to see if we could get some advance recession warning  from the co-incident indices of the 50 US states. We built a composite economic index of 50 U.S states as published by the Philadelphia Federal Reserve, […]

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CFNAI- revisions and recessions

Download article as PDF The latest CFNAI-MA3 reading came in at -0.47 from last weeks -0.26 (revised down from -0.21). This downward jump (and downward revision)  naturally has everyone on edge. We are not yet concerned with this reading as it is not being corroborated by any leading indicators. However with the perma-bears now being […]

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Judging Recession Forecasting Accuracy

Download article as PDF In August 2011, ECRI declared a recession was upon us. If you spend enough time examining their initial proclamations it was literally that a recession was imminent, saying “It’s either just begun, or it’s right in front of us.” Subsequently they revised their call, saying the recession would hit “by mid year” 2012. At […]

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The NBER co-incident Recession Model – “confirmation of last resort”

Download article as PDF NOTE : AFTER READING THIS, ALSO TAKE A LOOK AT : “The effect of data revisions on the NBER recession model” and “Estimating Recession Probabilities using GDP/GDI” The National Buro for Economic Research (NBER) are the final arbiters of recession dating in the U.S. They take forever to proclaim specific starts and […]

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Recession Forecasting Ensemble (RFE) and market timing

Download article as PDF The Recession Forecasting Ensemble (RFE) is a collection of 6 powerful diversified recession forecasting methodologies that differ in data, mechanics, approach and theory to offer us an over-arching recession dating and forecasting methodology that is resilient to individual “model risk”. There is no “one size fits all” mathematical model that performs well in […]

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Here we go again…

Download article as PDF WE DON’T SEE IMMINENT RECESSION & NEITHER SHOULD THE NBER We find ourselves in the 3rd “summer slowdown scare”, just like 2010 and in August 2011. During this time the perma-bears crank up the alarm bells and we are bombarded with a cacophony of ill tidings that spell the doom of […]

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The SP-500 Great Trough Detector Project

Download article as PDF The SP-500 Great Trough Project is a technique where we deploy market breadth to determine favorable points in time for investors to “buy on the dips” on the U.S stock markets, more specifically the SP-500. We make reference to a “Great Trough” as rare, large correction reversals on the SP-500, normally spawning a new bull-market […]

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On standby for a Great Trough

Download article as PDF 13 June 2012 UPDATE: This Great Trough is not done yet, we may well re-test prior lows in the bottom-making process. The breadth- index head-faked and fell below 26% yesterday meaning the countdown timer will be reset. We now await for the index to rise above 26 again and attempt a second strike […]

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Can the U.S skirt global recession?

Download article as PDF With many parts of the Euro-zone entering or already in recession, and the OECD recently putting Australia, Germany and Italy into recession, one has to wonder if the feeble U.S recovery can skirt a global recession. Many mainstream pundits have been pointing to countries around the globe slipping into recession as a reason […]

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ECRI WLI Growth Conundrum

Download article as PDF More recently, ECRI has switched from the use of smoothed 6-month growth rates (as calculated by their WLIg growth metric) to  annual (52-week) growth numbers of its Weekly Leading Index (WLI) to prop up a recession scenario. The reason cited is “…a wide­spread sea­sonal adjust­ment prob­lem that  econ­o­mists have known about for some time.”  […]

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