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What phase of the business cycle are you in now?


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Answered 2007-06-18 18:21:19

before answering the question, let's review : The six stages of a typical business cycle

Stage 1 [recession à contraction]

Bonds are bottoming out and start rallying [i are peaking out and start falling]

Stocks are still declining

Commodities are still declining

Stage 2 [recession à contraction]

Bonds are rallying [i are falling]

Stocks are bottoming out and start rallying

Commodities are still declining

Stage 3 [recession à recovery]

Bonds are rallying [i are falling]

Stocks are rallying

Commodities are bottoming out and start rallying [all three assets are rallying now]

Stage 4 [prosperityà expansion]

Bonds are peaking out and start declining [i are bottoming out and start to rise]

Stocks are still rallying

Commodities are still rallying

Stage 5 [prosperity à stability]

Bonds are declining [i are rising]

Stocks are peaking out

Commodities are still rallying

Stage 6 [prosperityà slow down à contraction à recession]

Bonds are declining [i keep rising and are going to peak out]

Stocks are also declining

Commodities are peaking out and start declining [all three assets are declining now] So now we can assess that we are in stage 4 : prosperity [close to maturity]

Bondsare peaking out and start declining [interest ratesare bottoming out and start to rise]

Stocksare still rallying and Commodities are also rallying

Commodities are still rallying

Commodities are still rallying

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