Where Is the Credit Cycle Headed?

Where Is the Credit Cycle Headed? “Typically, once the horse leaves the barn on the domestic credit cycle, there’s no turning back…” We all know that never ends well. Picture source: Hedgeye Risk Management LLC

The Credit Cycle Is Leading the Economic Cycle

The Credit Cycle Is Leading the Economic Cycle This great chart shows that an economic slowdows risk is rising. When delinquency rates on consumer loans reach a low, there’s a high probability of a recession on the horizon. Picture source: Deutsche Bank

Can Small Business Predict the Business Cycle?

Can Small Business Predict the Business Cycle? A widening high-yield spread remains a useful indicator for predicting a coming recession in the current interest rate environment. See also “A Widening of Credit Spreads Is Very Useful to Predict a Recession.“

Yield Curve Inversion

Yield Curve Inversion A yield curve inversion is a necessary condition for a recession, but it is not a sufficient condition. We also need a widening of credit spreads and higher real interest rates. And currently, the long end of the yield curve has a normal upward slope. See “Why the Current Business Cycle Can Continue.”