I did a quick search and have not come up with any studies that investigated savings rates as predictors of recessions. From a purely anecdotal POV, it seems like bull/bear cycle tracks somewhat closely to consumer savings rates. Coming out of a recession, you would expect to see the savings rate fairly high and as an expansion occurs the savings rate will slowly fall until there is no more money available for significant purchases. Once a certain level of leverage is observed across the board, the recession is around the corner. I get that the last recession was based on a banking crisis; however, the typical boom/bust cycle appears to be linked to consumer spending habits since 2/3rds of the economy is dependent upon consumer spending.

https://www.wsj.com/articles/u-s-consume...1517233281

Quote:WASHINGTON—Americans’ rate of saving dropped to a 12-year low last month as consumers spent more, reflecting their modestly higher incomes as well as rising stock and real-estate prices.

The 2.4% saving rate in December hit a new low for this expansion, as high asset prices and the prospect of lower taxes enticed consumers to spend more.

Personal-consumption expenditures, a measure of household spending on everything from cellphones to groceries, increased a seasonally adjusted 0.4% in December from the prior month, the Commerce Department said Monday.

Personal income—reflecting Americans’ pretax earnings from salaries, investments and other sources—rose 0.4% in December. Economists surveyed by The Wall Street Journal had forecast a 0.5% rise in spending and a 0.3% rise in incomes.

Low unemployment, the prospect of lower taxes and the rising values of houses and stocks have made households feel more financially secure and willing to spend in recent months. November’s spending was revised up to a 0.8% increase from a previously reported 0.6% gain. Spending rose 0.3% in October.

Americans’ rate of saving is at its lowest since September 2005. The personal saving rate, which measures the difference between what households earn and what they spend on goods, services and repaying loans, was 2.4% in December, down from a revised 2.5% in November.

Quote:While a low saving rate suggests consumers feel optimistic enough about their financial prospects to put aside less for a rainy day, it also means households have a smaller financial cushion should an economic downturn hit. The rate of household saving was 6.6% when the recession ended in June 2009.

People have short memories.

(01-29-2018 03:54 PM)NIU007 Wrote:  People have short memories.

like you were actually saving....

I would normally agree if this didn't have the metrics behind it.....

the rest were not transparent until too late.....

but you don't see that....

oh yeah....I am on record I would've put in a 30 day short position when I thought the #swamp would stonewall the tax cuts and was much younger......

you don't remember that one either and how I easily admitted when I was dead wrong, do ya????

keep on with team over your cuntry.....it's not lost in translation....