Can Markets Actually Predict Recessions?

The famous economist Paul Samuelson said, "Stocks have predicted 9 out of the last 5 recessions." So the folks at CNBC took at look at how good a recessionary predictor are stocks. Turns out the markets have predicted 13 of the past 7 recessions, for a 53% success rate. Not too bad. However, it might just be that bear markets not only predict recessions, but they may also help cause them.