An outlook on crisis indicators than and now

Abstract

The longest ever bull market in recent history is finally coming to an end as global recession fears have been steeply rising with the global outbreak of the CoVid-19 pandemic. Needless to say, the stage for another global economic downturn has been in the process of setting, the Russian-Saudi-Arabian oil price war, market uncertainty, high volatility and by far most importantly a global pandemic have created a perfect storm triggering a worldwide economic downturn. Could we have predicted the outcomes of the events that led up to the current liquidity crisis? Could economic indicators potentially forecast recessions? If yes, then what are those indicators, and how exactly should average people interpret them? The research paper is going to focus on gathering a database of all of the possible banking and currency crisis indicators, evaluating their feasibility and, if possible, model their behavior. The contribution of a currency or banking crisis prediction model would be that of an independent forecasting system that would give an estimate of the likelihood of a recession. The research paper analyzes in great detail the timeline of the 2008 financial crisis and the patterns that lead to it, altogether comparing the current financial market’s condition to its condition before the last crisis, highlighting similarities and core differences.. The aim of the research paper is to introduce a few key market indicators capable of forecasting major shifts in macroeconomic business cycels introducing the importance of a close attention to the national treasury bond maturity yield curve