Recession Signs

Your average economist doesn’t forecast recessions — at least publicly. Government economists like the Federal Reserve chairman would be open to severe criticism for talking the country into a downturn –creating a self-fulfilling prophecy. Corporate forecasters — especially those tied to financial institutions — court trouble with bosses if they turn too negative and turn off clients, who might nix new deals or investments over nervousness about a downturn. Instead most economists talk in code to protect their backsides, while offering enough hints at their thinking to have it both ways. I’m no economist, but when headlines appear like “Fed Expects Slowdown to Deepen” (New York Times 11/21) and “Slower Growth Lies Ahead” (Conference Board 11/21) you know trouble lurks.

Then I get a note with on the ground intelligence from a former high-profile real estate investment management CEO who writes:  “My Jaguar salesman and boat salesman buddies in Florida say we are in a recession as does my cabinetmaker in Atlanta.  Check out the number of condo ad pages in NY Times Sunday mag or New York magazine.  Venezuelans cannot get money out of country — bad news for Miami.  Wait till all the fraud comes out re. subprime…  The sky is falling.”