By Adam Lass

I told you it was coming, and I told you that the market would hate it: Today the Commerce Department informs us that the most trusted of leading indicators, durable goods demand, fell 8.3% in October, led by a 44% drop in aviation orders.

However (and this is critical), even if you factor out the admittedly volatile and probably categorically ill-placed aviation figures, durable goods demand was still down 1.7%.

Now we must face the facts: Three out the last four months have come in flat or down. This signal has now shifted from mere yellow to blinking red. Can a recession be far behind?

Maybe, maybe not, but three things are for sure: If (when?) a recession does occur, the spin squad will deny its existence until it is over, blame it on the other party, and finally, claim credit for “beating” it.

And how will they beat it? Cheap cash via a series of quarter-point drops in the Fed rate.

Is this a good thing?

In the long run, probably not, as it will (by definition) stimulate inflation. But in the short run, it is probably the only viable option on the table.