Is it here yet?

From the Wall Street Journal:

Most Economists Say Recession Has Arrived as Outlook Darkens
March 13, 2008

The U.S. has finally slid into recession, according to the majority of economists in the latest Wall Street Journal economic-forecasting survey, a view that was reinforced by new data showing a sharp drop in retail sales last month.

“The evidence is now beyond a reasonable doubt,” said Scott Anderson of Wells Fargo & Co., who was among the 71% of 51 respondents to say that the economy is now in a recession.

The Commerce Department said Thursday that retail sales tumbled 0.6% in February; sales excluding volatile auto and parts decreased 0.2%. The decline reflected a sharp slowdown in consumer spending, the primary driver of U.S. economic growth, as Americans grapple with high gasoline prices and the credit crunch, as well as drops in home values and other asset prices.

The survey, conducted March 7 through March 11, marked a precipitous shift to the negative from the previous survey conducted five weeks earlier. For example, the economists now expect nonfarm payrolls to grow by an average of only 9,000 jobs a month for the next 12 months — down from an expected 48,500 in the previous survey. Twenty economists now expect payrolls to shrink outright. And the average forecast for the unemployment rate was raised to 5.5% by December from 4.8% in the previous survey.

Much of the gloom stemmed from last Friday’s employment report, which showed a loss of 63,000 jobs in February, the second consecutive monthly decline. “My recession call comes from the employment data,” said Stephen Stanley of RBS Greenwich Capital. “It struck me as a recessionary number.”

Twenty-nine of 55 respondents said they expect the economy to contract in the current quarter and 25 expect it to do so in the second. The average of all the forecasts is for meager growth — just 0.1% at an annual rate in the current quarter and 0.4% in the second.

The economists also expressed growing concerns that a 2008 recession could be worse than both the 2001 and 1990-91 downturns. They put the odds of a deeper downturn at an average 48%, up from 39% in the previous survey. Mark Nielson of MacroEcon Global Advisors said that “we recognize the previous two recessions were mild and, if a recession does occur, it is likely to be slightly worse than the previous two.”

One thing is clear: The darkening economic outlook has made Ben Bernanke’s job less secure, especially with a new president about to enter the White House. The economists gave the Fed chairman just a 59% chance of being reappointed in 2010. “If a Democrat is elected he won’t be reappointed, and [presumptive Republican presidential nominee John] McCain may opt for another, too,” said David Resler of Nomura Securities. “The problems occurred on his watch,” added Ram Bhagavatula of Combinatorics Capital.

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30 Responses to Is it here yet?

  1. bi says:

    any insisgt on the impact of this new COAH rules?


  2. njpatient says:


    I knew it was a field trip day!!

  3. njpatient says:

    Apologies for having bored everyone with JLB’s old, stale, hysterically funny predictions. I wish I could do that with Chris Matthews and Tim Russert, etc.

  4. chicagofinance says:

    here ya’ go boyeeeeeeeee

  5. JLB says:

    #3 Patient: Oh that’s okay I wasn’t bored at all! The only thing I would suggest is that you base something you say on fact and stop trying to shout everyone down as it is not very constructive.

  6. njpatient says:

    #5 = irony.

  7. njpatient says:


    That’s pretty rich. In those threads I was quoting from, I left behind all the posts in which you insulted 3b, bairen, skep-tic, chicagofinance, and even grim.

    I must have missed your substantive, fact-based posts.

  8. grim says:

    #362 Grim: Well, you should feel different about owning one and renting one. You get tax benefits and possible capital gain when you sell it vs. the one you rent

    Tax benefits? Sorry, those don’t apply.

  9. lisoosh says:

    patient – must have taken a while to track down all those posts.

    Jill – That Fort Washington sound great! In Bucks? I love Persian food and have become addicted to my local Wawa, great cheap coffee.

    Is it me or are a large number of the people on this board who show up speaking down from the lofty perch of their “top train towns” absolute and utter putz’s?

  10. lisoosh says:

    Should point out that the last sentence was my 2 cents regarding the long debate in the other thread.

  11. JLB says:

    #7: I did not see any insults just a different opinion. But I’ve noticed something in your posts…it seems you like to bully anyone who disagrees with you. I happen to think it is okay to buy a home and that people have many different reasons and timeframes, is that really such a horrible opinion?

  12. JLB says:

    #8 grim: what do you mean?
    #9 lisoosh: oh great another one that can’t accept a differing opinion and resorts to name calling.

  13. JLB says:

    By the way, on topic, usually when you realize you are in a recession you are on your way out of it.

  14. victorian says:

    JLB for Prez!!

    He spreads more hope than Obama!

  15. njpatient says:

    grim 8

    Apparently, when you sleep in your rental it stunts your kids’ growth. Or something.

    “JLB Says:
    July 26th, 2007 at 1:28 pm
    The most interesting question raised in this whole debate of working vs. nonworking parents is the comment that you are doing your child a disservice if you rent. Is that true, are you cheating your child if you don’t own a home?”

  16. njpatient says:

    11 JLB
    “it seems you like to bully anyone who disagrees with you.”

    you mean like this?

    “JLB Says:
    July 26th, 2007 at 2:07 pm
    #249 NJGAL: isn’t it a little sad that in your response is your judgement on your mother?”

  17. BC Bob says:



    Do as I say or as I do??

  18. JLB says:

    “When the wife does not focus in on the needs and the feelings sexually, personally, to make him feel like a man, to make him feel like a success, to make him feel like our hero, he’s very susceptible to the charm of some other woman making him feel what he needs.”
    Dr. Laura on Spitzer
    HO NO!

  19. JLB says:

    #15 Patient: Gosh I’m starting to feel like Obama’s pastor…taken out of context…I didn’t say it was detrimental for children to rent, someone else did and I asked do people actually believe that.

  20. JLB says:

    Patient you are addicted to me and my wisdom filled posts..bring it baby…

  21. grim says:

    From Reuters:

    Mortgage broker, lender plan too little too late

    The latest U.S. federal plan to restore confidence in U.S. mortgage bond and housing markets, promising strict home lender and mortgage broker standards, might thwart the next crisis but does little to quell this one.

    U.S. Treasury Secretary Henry Paulson unveiled the President’s Working Group plan on Thursday, recommending “strong nationwide licensing standards” for brokers and tougher oversight of all mortgage originators.

    Slack lending practices that fostered record U.S. home price appreciation earlier in the decade are faulted for the housing bubble and its subsequent bursting.

    Thursday’s federal proposal, however, provides no relief to banks and investors currently overloaded with bad mortgages and loans backed by those loans.

    With home mortgage foreclosures escalating, there is a dearth of investor demand for bonds backed by many mortgages. In addition, lenders are rejecting many more borrowers and house prices are falling in what is seen as the worst housing market since the Great Depression.

    “The horse is out of the barn on this cycle and recession,” said Phil Immel, broker at Prudential California Realty in Dana Point, California, and founder of

    Paulson’s proposals “may be good for the next down-cycle in real estate, which happens every seven to 10 years, but it shouldn’t have much impact of calming any markets, real estate or Wall Street, for years to come,” said Immel.

    Some analysts say the Paulson proposals may deepen the housing crisis, and may not even help prevent the next one.

    “The goal is to prevent the next housing crisis, but in the short term, it will make this crisis worse,” said Chris Low, chief economist at FTN Financial in New York.

    “You are taking marginal home buyers right out of the market” by stiffening lending practices even further and choking off access to credit for more borrowers, he said.

  22. njpatient says:

    19 jlb
    you sure did. You asked it several times, in case anybody missed it the first time.

  23. victorian says:

    This is funny:

    “The investment bank CEOs clamored and said Master, we have liquidity needs being demanded from all of these people. They have come to us and we can not meet their requirements. We only have illiquid investments ! How will we provide this large crowd with the liquidity they need. They may turn on us. What shall we do ?
    Ben took a deep sigh and told his disciples. Gather up your illiquid investments in these baskets and pass them around.
    Ben’s banking disciples said. Master, they are not liquid how can we pass them around and provide them the liquidity they need. One of his disciples said just do as he says. So the disciples passed around the baskets and to the amazement of the crowds and the disciples, the illiquid investments had been transformed into liquidity. The disciples and the crowds marvelled at one they had seen. For indeed, Ben had performed another financial miracle before their eyes.”

  24. BC Bob says:

    “The President’s Working Group”


    Mo, Larry and Curley?

  25. Clotpoll says:

    BC (24)-

    Gartman looked like a man who’s very confident in his read on things. I like that.

  26. lisoosh says:

    #9 lisoosh: oh great another one that can’t accept a differing opinion and resorts to name calling.

    Probably not. But Oh the Joy of discovering the people I disagree with on housing and economics and pretentiousness and politics and race are all rolled into one easy to distinguish package. Much simpler when you know what you are dealing with.

  27. Clotpoll says:

    BC (24)-

    That’s an insult to the Stooges.

  28. BC Bob says:


    Gartman has it pegged. The absolute best.

    The President’s Group? As soon as they open their mouth, the world starts to sell. When the heat is on, we resort to emergency cuts, increase the size of the window, extend repo’s and turn a blind eye to trash. Coincidence? Always announced an hour before the NYSE open? Crush the shorts, futures, and carry the futures momentum into the cash opening. No, that would wreak of manipulation.

    Hopefully, Kristen demanded Euros, gold or grains for her hard work.

  29. BC Bob says:


    “5. In Bull Markets One Can Only Be Long or Neutral, and in bear markets, one can only be short or neutral. This may seem self-evident; few understand it however, and fewer still embrace it.”

    “12. Bear Market Corrections Are More Violent and Far Swifter Than Bull Market Corrections: Why they are is still a mystery to us, but they are; we accept it as fact and we move on.”

  30. Clotpoll says:

    BC (29)-

    I used to have those rules taped to the wall above my computer.

    #12 will be cold, swift and ruthless vengeance when the PPT’s bag of tricks runs dry. And, that day is coming…very, very soon. Bergabe et al can’t pull a rabbit out of the hat every damn day.

    100 yen, $1,000 gold, $110 oil, beans in the teens and $1.60 Euro are not abstract concepts. Attention must be paid.

    And- as if the thought of owning C isn’t cringeworthy enough- imagine owning it at about $8…with NO DIVIDEND!

    The banks are sinking, after having gorged on crap then diving into the deep end. Yet, S&P says the writedowns are about to end? If so, why does Hammerin’ Hank think they need to bomb their dividends and go into survival mode? Who’s lying here?

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