Aussie technical analyst did a good job today (www.incrediblecharts.com) showing a chart that speaks to the type of economic landing that can be expected in the U.S. It's all about the Yield Curve and the Wright Model.

By way of background, Twiggs states:

Jonathan Wright, a research economist at the Federal Reserve, in his paper titled The Yield Curve and Predicting Recessions, tested the ability of various models to predict recessions. While his study confirmed a significant and relatively stable relationship between the yield differential (or spread) and subsequent recessions, Wright found an important second variable that substantially improved predictive ability. When the federal funds rate is low, Wright's model showed that chances of recession are significantly less than when the funds rate is high, even if the yield differential is negative. This is best illustrated by comparing output from the model with the fed funds rate set at 3.5% and at 5.5%. The spread is calculated as the difference between ten-year and three-month US Treasury securities.

So, it is important to watch the U.S. Treasury yield spread. Every week in the Week In Review, I show the spread between 30-year T-Bonds and 3-month T-Bills, between 10-year and 2-year Treasury Notes, and between 2-year and 3-month Treasuries.

As these spreads narrowed and then inverted over the past year, I continued to say: The U.S. economy is not healthy, and that banks are not is the financial health to the extent their share prices indicate.

To me the words "soft or hard landing" are rather ambiguous, but the single word "landing" is not. It implies a fall. The fall (or decline) in U.S. GDP growth could turn ugly. Anything's possible.

All I say is that what is happening today was obvious many months ago but was purposefully ignored by media personalities working for vested interests.

Not to put too fine a point on it, but the same "personalities" will soon be telling you that they had it right all along, yada yada.

That is a reason I call these people clowns. They obviously don't take things as seriously as the rest of us, especially Colin Twiggs whose work from "Down Under" should not be under-rated.