RECESSION PREDICTION.

RECESSION PREDICTION. I rashly said in a post a couple days ago that I would make a prediction on whether there will be a recession. (I don’t think we are in a recession now). This was rash because I am really on the fence. It seems to me that the opinions of economists are pretty evenly divided. According to an article in the Financial Times for August 18, the Merrill Lynch fund survey of fund managers reported that almost half think that there will be a technical recession in the next 12 months, while two months earlier only one third thought there would be a recession. I see that on July 31 I said in an e mail to a friend that I thought the chance of a recession was 70%. Yet now it seems to me that there has been a full year to adjust to the real estate and financial crises, and the economy is still growing. I don’t see why the export sector should not continue to be strong. So I now have changed my view. Make it a 40% chance of a recession.