I hope they are wrong: United Panic

Over at NYT finance correspondent Floyd Norris' excellent blog, a snip from a terrifying report out today from The Levy Forecasting Center at Bard College. Norris says they've "Been among the most worried – and therefore, most accurate – forecasters over the past several years." Dear God, I hope they are wrong.

Most investors, businesses, and analysts, despite their deep pessimism about the consumer outlook, will be surprised by the length and severity of the consumer pullback.

The public is starting to discover the seriousness of the state and local fiscal position, but the magnitude and fallout of the developing nonfederal government crisis will prove shocking.

Many fear that the present financial mess is setting the stage for surging Treasury yields, and most will be surprised by how low yields will fall. . . .

House prices will probably fall another 20%. . . .

The emerging market sector of the global economy is facing more than a financial crisis; it is facing a depression, which unfortunately is likely to be uncontained and severe in many countries. . . .

Even if the recession does end before 2010, employment will continue to decline. It is likely to fall for another year or two as downsizing and restructuring persist. The unemployment rate is likely to reach 8.5% by the end of 2009 and will be near 10% before it reverses.

United Panic (Floyd Norris Blog, New York Times)

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