Bloomberg: The next recession will come in the next 12 to 18 months

The recession model of Bloomberg, which is believed to work with a high probability, starts to signal that in the next 12 to 18 months we can expect the next recession in the markets. The model is a neural network that accepts different market rates and tries to predict when the next recession will occur. As can be seen in the main chart, the likelihood that the next recession will occur over the next 12 months is booming despite the growth of markets. At the same time, the likelihood of the next recession happening over the next 12 to 24 months is declining, which causes analysts to believe that the collapse will occur somewhere between the two expectations - 12 to 18 months.

This seems a pretty crazy scenario in view of strong growth, but remember that 18 months before the recession in 2007, GDP grew by 3.1% on an annual basis; 12 months before the recession in 2000, GDP grew by 4.2%. At the same time, the trend in global indexes seems irony.

At the moment, the indices seem to have nothing to worry about, except for the trade dispute between the US and China and the temporary political scandals around Trump. The market reaction totally ignores Trump's problems and eventually deepening the trade war. The SP500 mark is close to All Time High, and given positivism among market participants, I expect the bullish trend to stay.

Source: Bloomberg Finance L.P.

Charts: Used with permission of Bloomberg Finance L.P.

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