U.S. Will Escape Recession in 2008

[Retire Soon]

Despite rising oil prices, a serious housing crisis and a volatile stock market, UCLA Anderson Forecast says there will be no recession in California or the nation in 2008. The study says negative economic growth for two consecutive quarters will be avoided next year.

They believe that unemployment will have to increase to 6% from the current 4.6% before we could have a recession. In order for unemployment to reach 6%, we would have to lose 2 million jobs, and they say this simply is not going to happen.

The rest of the good news is that stock prices will rise 10 to 12 percent next year, "amid calming credit markets and modest economic growth."

What do you think about this forecast? Would you like to share your own personal prediction?

 

[dex]

How accurate have they been in the past.

 

[Retire Soon]

How accurate have they been in the past.

The UCLA Anderson Forecast has been around since 1952. They were the first forecasting team to declare the recession of 2001. It's one of the most widely watched and often cited economic outlooks in California as well as the nation. If California were a country instead of a state, they would have the third largest economy in the world.

 

[Independent]

Today's price at Intrade is about $45. That equates to a 45% chance according to the people "investing" there.

I'm a little more bearish, but that's probably just my personality. I'm guessing that the psychological effect of the mortgage mess still has a long ways to go.

People who think 45% is way high or way low have an opportunity to make money in a "pure play" on a recession forcast.

US.RECESSION.08 16:00

 

[al_bundy]

if a million people foreclose next year, it's just more money freed up for consumer spending

 

[twaddle]

Maybe we should make this the recession prediction thread.

Feldstein at Harvard says 50% probability of recession in 2008:

Leading economists tell Congress recession dangers rising - Forbes.com

 

[MikeD]

Maybe we should make this the recession prediction thread.

Feldstein at Harvard says 50% probability of recession in 2008:

So he's "right" either way?

Mike D.

 

[twaddle]

Smart guy, eh?

I do the same thing with my investments. 50/50 stocks/bonds. Bonds are 50/50 inflation-indexed/nominal. Stocks are 50/50 US/intl. I am always right!

 

[walkinwood]

I guess the question still is - How accurate have they been in the past?
I looked around their web-site and saw no mention of past record. But that's not surprising. Most forcasters talk about their success, but don't publish a detailed scrorecard.

 

[audreyh1]

I vote for a likely recession in 2009, which means we would have a bear market in stocks in 2008.

maybe, maybe not!

Audrey

 

[Bikerdude]

When asked what the stock market will do, J.P Morgan (1837-1913) (banker, financier, businessman) replied:"It will fluctuate."

Personally I think market the will be up next year. I think the economy is stronger than CNBC reports . However, my portfolio kicks off enough in interest and dividends to live on. I would like to see some capital gains but its not necessary.

 

[donheff]

I don't have a clue.

 

[dumpster56]

Depends on how high energy prices go. My new numbers are over 4.50 a gallon for gasoline. If that happens I think we go into a recession. But then again I am a Phys ed teacher. What do I know?

 

[mountaintosea]

My guess...

Recession if it is going to happen, won't be next year. From everything I've read there's an upward bias in the last two years of the presidential cycle on wall street. All h*ll could break loose in 2009 though.

 

[Zoocat]

I think that the Bush administration will keep us in denial until the election is over. When the Democrats take the presidency, they will find out how bad things really are. Whether they tell the truth or not we will see. The economy will eventually reveal all. According to my crystal ball 2009 will be the first recession year but don't quote me. Things could really go down the toilet before then.

 

[FinanceGeek]

I believe that the stock market is already selling off in anticipation of one party rule beginning in early '09. In my experience, history makes it clear that neither party can be given complete trust. So recession in '08 I cannot say, but lower stock market - very likely.

 

[al_bundy]

I think that the Bush administration will keep us in denial until the election is over. When the Democrats take the presidency, they will find out how bad things really are. Whether they tell the truth or not we will see. The economy will eventually reveal all. According to my crystal ball 2009 will be the first recession year but don't quote me. Things could really go down the toilet before then.

i keep getting emails for new jobs and last week i got 2 calls from recruiters

how do you think the administration is hiding anything? most of the data is collected by private sources and wall street eats it all up

 

[RetireeRobert]

They just had to re-revise up the growth rate from 4.9% to 6.3%, and they had said 4.9 was some kind of record.

Not sure about the forecast of 10-12% stock growth, but it will be up for 08.

 

[Zoocat]

i keep getting emails for new jobs and last week i got 2 calls from recruiters

how do you think the administration is hiding anything? most of the data is collected by private sources and wall street eats it all up

Your experience only proves the point that the economy is always local. But you make the good point, if the administration IS hiding something, how would I or any outsider know for sure?

I've been reading too many doom and gloom economist analysis.

 

[2B]

The old joke is that economists have successfully predicted 8 of the last 3 recessions. The negative drum beats in the media would have you think our economy is falling down around our ears. The dems are certainly going to badmouth the economy and find fault with their repub breathern. So far, I've made a lot more money with Bush-II than with Clinton-I.

The negatives are the decline in some housing markets (that most had gone up a lot more in the last 10 years than they've fallen) and the reduced liquidity. The biggest negative I see is the threat of the US government to overturn our private contract law for political purposes like any third world dictator would do. Both parties are guilty. When our contracts can not be trusted, then the US economy is doomed.

The positives are near record (low) unemployment, strong productivity growth and low interest rates. It looks like one of our negatives will cause interest rates to fall again and probably stay low.

I personally see a strong economy and stock market into 2009. At that point something will change and we'll get the economic cycle to go the other way for awhile. The victorious 2008 dems will then blame Bush-II for their problems but I doubt he will be responsible any more than the dems. The cycles happen. Politicians can do some things to minimize the impact but they almost always make it worse.

 

[lazygood4nothinbum]

The old joke is that economists have successfully predicted 8 of the last 3 recessions.... So far, I've made a lot more money with Bush-II than with Clinton-I.

love the economist thing, very funny.

i've never noticed any difference in my lifestyle during my working years that could be attributed to either party in office. i managed fine enough regardless of who ruled. so would political party while not working make that much of a difference?

i always need to (dis)qualify my comments on economy by saying that i have little idea of what is going on but i try to learn as i go.

perhaps someone can enlighten me. has the economy become so regulated by what seems to be a tug of war between the fed and the market and has the economy become so intertwined with internationalism and has the economy become so much larger because of world trade that it no longer plays quite by all the same rules as it has in the past and by which people are trying to predict its future?

 

[Retire Soon]

Majority of economists believe we've slid into a recession

It seems that a majority of economists disagree with the UCLA Anderson Forecast and believe we're now in a recession according to a new WSJ survey:

The Wall Street Journal

 

[chinaco]

Don't look now.... you are in a recession.

If you listen, you can hear the final gasp. Unfortunately, the Bush administration kept the pressure on the fed to keep interest rates low to fuel the housing boom during the last election (wonder why)... I wonder if getting reelected had anything to do with it. Later the fed tried to raise rate and we see what happened... we are in a trap. The dollar is worth much less. If you raise rates, the economy suffers.

It is too bad. We have had 2 successive incidents of Financial oriented misbehavior that has tanked the country... The tech bubble, brought on by investment bankers hyping IPOs and misleading investors and the companies themselves. And now the Subprime debacle brought on by the same general group of people.

Something is wrong with the formula. More regulation is needed because without it the white collar criminals come out of the wood works...

 

[Notmuchlonger]

"So far, I've made a lot more money with Bush-II than with Clinton-I."

Ive done pretty well under both as have most of my family and personal contacts. But I keep forgetting how terrible it is in this country. Good thing I keep coming back to this message board to keep me in line

 

[armor99]

The old joke is that economists have successfully predicted 8 of the last 3 recessions. The negative drum beats in the media would have you think our economy is falling down around our ears. The dems are certainly going to badmouth the economy and find fault with their repub breathern. So far, I've made a lot more money with Bush-II than with Clinton-I.

The negatives are the decline in some housing markets (that most had gone up a lot more in the last 10 years than they've fallen) and the reduced liquidity. The biggest negative I see is the threat of the US government to overturn our private contract law for political purposes like any third world dictator would do. Both parties are guilty. When our contracts can not be trusted, then the US economy is doomed.

The positives are near record (low) unemployment, strong productivity growth and low interest rates. It looks like one of our negatives will cause interest rates to fall again and probably stay low.

I personally see a strong economy and stock market into 2009. At that point something will change and we'll get the economic cycle to go the other way for awhile. The victorious 2008 dems will then blame Bush-II for their problems but I doubt he will be responsible any more than the dems. The cycles happen. Politicians can do some things to minimize the impact but they almost always make it worse.

Thanks for an acurate, honest, and non-hysterical look at what the economy is really doing. I believe you are very correct. Our unemployment is historically VERY low right now. I saw a statistic the other day that out of ALL loans (prime, subprime, etc), a little less than 6% were in default. I still believe that is a fairly small number. Plus I see each and every day in the media, sometimes even in this forum, the almost gleefull proclimation that the economy is hosed... going into a great depression, world comming to an end etc.
The one thing that I do see alot and surprises me, is how many people look at all of the facts etc, and still proclaim to know "better". I personally believe there are a lot of people out there that WANT the economy to tank. Some are bitter people that feel all of their problems in life were caused by "the rich" (whoever those people really are), and that somehow if the economy tanks it will punish "the rich", but not themselves. The media is actively, and openly "rooting" for a democrat to win the presidency. The easiest way to help ensure that happens is to make conditions appear to be a bleak as possible. After all, when the economy is not doing well, whichever party is in office usually gets replaced by the other party. I look at the facts, at the statistics, and I do not see a reason why the stock market should be as down as it currently is. But we all know that the stock market can swing violently on the most esoteric of news (good or bad). I believe we are in fact "talking ourselves" into a rescession. A self fulfilling prophacy is what some people would call it. Obviously there are some very real reasons why the econmy is not doing as well as it could right now. But I think it is important to look at the big picture and remember that historically we are not so bad off right now.