Come & Gone

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Here is a chart we haven’t looked at in a very long time. The symbol is FR:T10Y3M in SlopeCharts, and it shows the 10 year rate minus the 3 month rate, which has been a flawless predictor of recessions. We watched it as we approached the “trigger line”, although little did we know precisely what would be to blame for the ensuing recession that did, in fact, take place.

slopechart FR T Y M

The thing about these major recessions is that they are followed months or even a couple of years later by a rock ’em sock ’em bear market. I’ve marked prior “trigger instances” below. So the question is – – did the literally 3-week bear market we had early in 2020 constitute the post-recession plunge, or are we still waiting? They say it’s never “different this time”, but things sure do seem “different” by just about any measure.