Advance Warning for the Professional
IMPORTANT DISCLAIMERS: Although many of our models rely heavily on back-testing, optimisation and probability methods, please note that past performance is NO GUARANTEE for future returns. No system devised by man can predict the future, let alone the future of the markets and economies. What we have are sets of mathematical models that use historical data and varying theories to pinpoint places in time when the STATISTICAL LIKELYHOOD of calling the start and end to recessions is the greatest. In the midst of all the best mathematical models, you can have geo-political events, wars, terrorist attacks, natural disasters and even nuclear accidents that tip everything upside down. This is always a risk factor you need to factor in on any recession call no matter how confident you are in a signal. The SuperIndexes are created through mathematical and statistical optimisation techniques that best fit the historical NBER data. There is no guarantee that out-of-sample performance will match that of prior in-sample performance.
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World Economy Update – as at July 2013
These are extracts compiled from our monthly World Economy Report that comes standard with a RecessionALERT annual subscription:
It does not matter which way you look at it – the global economy has rebounded into growth territory from which surely could have been classified as a World Recession a few quarters ago. We can see this from the percentage of countries posting positive quarter-on-quarter GDP growths:
…as well as the percentage of countries with positive Leading Economic Indicator growths:
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When we examine World Economic Activity, compiled from Trade Volume (imports and exports) and Industrial production figures, it appears this is a “Tale of Two Cities” with the Advanced (US, Europe, Japan) economies powering ahead:
…and the Emerging Bloc (Emerging Asia, Central & Eastern Europe, Latin America, Africa & Middle East)seemingly recently sinking into contraction:
Future economic growth indications hint that this condition is likely to persist for a while:
The question here is do the emerging economies pick up from a tailwind created by the growth of the Advanced economies or is this just an unhealthy divergence we are witnessing?
About RecessionALERT
Dwaine has a Bachelor of Science (BSc Hons) university degree majoring in computer science, math & statistics 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.commentary, world update