Math Tells Me Yes, But My Heart Tells Me No

So there are many indicators I look at that to me would predict a recession, but probably the biggest one I look at (probably more because it was something pointed out to me so long ago) was that housing starts were an excellent leading indicator to the rest of the economy. Usually with a 6-12 month lag, when housing starts tank, recessions usually ensue. And ever since the FRED Database at the St. Louis Federal Reserve started imbedding them there nice slim shaddy (get it, "shaddy" because they're gray, like shade, but with the doubling meaning on the obvious ploy of Eminem's song "Slim Shaddy" huh? Get it? The pun I mean???) to indicate recessions, it helps make it very easy to illustrate my point.



However, it wasn't necessarily the contraction of GDP that tipped me off to the correlation as much as it was how housing starts and unemployment act like a double helix;


Now there are many things that would suggest to me that we're in for a recession. The obvious correlations above. The fact that consumer spending financed by fat-debt-bloated Americans with their addicted home-equity-loan spending has been having an artifical effect on the growth of the economy (and without perpetually increasing property prices this binge will end).


The utter patheticness of Gen X and future generations insisting on majoring in crap. And let's not forget all of this under the umbrella of constant threats from Muslim nutjobs, with a whimper weak retort from American's "leaders," and the impending social security and medicare crisis.

But it just ain't in my blood. I don't "feel" a recession coming on. It's odd, but contrary to all the mathematical evidence I have, I just got this gut feeling that the economy will be doing just fine for the next 12-16 months.

Alas, perhaps I'm one of the few economists that hasn't had the soul of economics kicked out of me and instead of replacing it with advanced econometrics, statistics, mathematics and models that no matter how complex are still finite, I still have a little faith in chaos, gambling and gut reactions.