April could be considered the peak of the recession we are in (or “slow down” depending on your side of aisle). That’s according to this model, based on the 10Y-3MO T-bond spread:

Recession Probability Track

Recession Probability Track

In the last twenty years, the average length of recessions was around 8-10 months. So by now we should be getting out of it.

But as consumer spending drops, GDP growth is towed mainly by exports, the CPI has its higher year-to-year jump in 17 years, and a new wave of foreclosures is about to arrive as ARMs expire, 8 months is simply not enough.

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