Transparent Distortions and GDP?

A Naybob of Financial Advice asks....

"do you think we need an inverted curve to forecast a recession or do you think things have gotten so distorted that it may be possible before that occurs?"

As always we endeavor to answer our friends FORECASTING question with our Nattering. What type of distortions does our friend allude to? When one utilizes falsity in econometrics in an effort to "firmly anchor expectations" of the public and market participants? 

When one engages in less than transparent market interventions through monetary policy [QE, ZIRP, IOER], which alter and distort asset valuations, price discovery and economic consequences as a whole?  Perhaps the fruit of those poisonous trees? 

[Mixed Economic Signalling?] The Fed has in fact perverted and degraded the assumed magical signalling quality of those markets (equity and bond) it mistakenly deems to be reflective of the real economy. 

Consequently, the Fed has made decisions based upon what is now, due to their own interference or lack of transparency, a tainted or bad signal.  

All that flows from the fruit of the poisonous tree (bad sensor, corrupted telemetry signal) can yield nothing short of erroneous decision making and result in systemic misguidance. - Davos: Black Swan Lake?

When the incoming field data, sonar or radar is corrupted, rendering the captain and crew effectively blindfolded in a fog of mis and dis information, how can one accurately steer the ship? Ask Captain Edward John Smith how that worked out for him? Moving West...

Although yield curve inversions have highly positive correlation with recessions, they are not a prerequisite condition.  Given current conditions and the level of distortion, we have been and are already in something far worse than a recession.

"Were it not for the GDP accounting chicanery of excess inventory and regulatory healthcare insurance payments being counted as a positive, 

and the phantom accounting of owner occupied "rent" equivalent as productive economic activity (the largest single component of services GDP and total GDP), 

advertised GDP would already have been negative for a majority of quarters since the crisis, already putting us in a recession." - Bull Economy 2

Say it isn't so oh Nattering One!!! There is always more than meets the eye, or what lies beneath viz. the Devil can always be found in the details.

Economic theorists, much like Ancient Astronaut theorists, are just that, theorists who dabble in a speculative postulation based upon assumptions, presumptions, estimates, guesses and in some cases self serving data, bias and falsehoods. 

Empirical evidence can be deceiving, especially from a biased source. When or why would the government or financial sector ever find it necessary to lie to the public? That would never happen, would it? 

"There are three types of lies - lies, damn lies, and statistics" - Mark Twain or Disraeli. - The Emperor's New Clothes Or Econometric Misperception?

More to come as we finish answering our friends question in Yield Curve Inversion: Recession? Stay tuned, no flippin.

Suggested Reading:
Bull Economy 2 - Jan 2016
Davos: Black Swan Lake - Jan 2016
The Emperor's New Clothes Or Econometric Misperception? - May 2015