Tuesday, April 12, 2005

The Mug's Game Challenge: Predict the Start of the Next Recession

by Bill McBride on 4/12/2005 05:47:00 PM

A recession is probably not imminent, but there are reasons to be concerned. General Glut ventured this today:

The "hard versus soft" landing debate is stale. The real question now is only "how hard?"
The next question is: When?

The Mug's Game Challenge

Here is a simple contest to predict the start of the next recession. The rules:

1) Enter a month and a year in the comments at any time right up to the recession being announced (one entry per person). Please feel free to state your reasons. I will feature those comments for the winners.

NOTE: You do not need to enter now. I am still waiting before I make my prediction. But early entries will be rewarded. I will update the contest every month as a reminder.

2) Scoring:

A) The Starting Month: The official starting month will be determined by the NBER. This usually occurs several months after the recession starts.

B) A pick will be considered correct if it is within +/- 2 months of the NBER determination (a 5 month window centered on the month picked). It is VERY difficult to pick the exact month, and being within a couple of months is quite an achievement.

C) All correct picks will be ranked by the number of months prior to the recession that the pick was entered. As an example, say the recession starts in Oct 2005: If someone correctly picks any month August 2005 through December 2005 (+/- 2 months) during April 2005, they will be rated a "6". This rewards picking the recession early.

All correct picks will be featured when the recession is announced and ranked by earliest picks.

Earlier I offered some thoughts on leading indicators for recessions. Several people have suggested other leading indicators to me. No one wants a recession, but we might as well have some fun!

Good luck to all!

UPDATE: Prize? The winners get their names mentioned, their comments featured, the admiration of their peers, and a free subscription to Calculated Risk!

UPDATE 2&3&4: Elaine is already a winner! Here are the picks so far (updates in bold):
Aug 2005 Kirk Spencer, wharf rat
Sep 2005 Vernon Bush
Oct 2005 BE, David Bennett
Nov 2005 David Yaseen, Fernando Margueirat, steve kyle, Nguyen Khuu
Jan 2006 Yusef Asabiyah, dryfly, Frank, redfish
Feb 2006 Mish, E.Robinson
Mar 2006 Colin H, ChasHeath, Alan Greenspend, Movie Guy, F.Hagan
Apr 2006 battlepanda
May 2006 Ken Houghton, navin
Jun 2006 DOR
Aug 2006 Jason Wright
Mar 2008 dilbert dogbert
Jul 2008 jl
Nov 2008 Elaine Supkis
March, 2011 Paul
NEVER Larry Kudlow's doppelganger

Posters can take the same month.