Wednesday, December 19, 2007

The Probability of A Recession in 2008

From Intrade, here is the market's wisdom on the latest probability for a U.S. recession in 2008.
Note that it spiked in September, came down in October and then picked up again in late November and has stayed there ever since. Does this pattern sound familiar? Take a look at the below graph.

Non-Profound Conclusion: the economic outlook is tied very closely to the credit market outlook.

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