The recession is over-that´s what we´ve been told. Job losses continue-albeit at a slowing rate. The car industry got a short term boost late last summer with cash for clunkers, but it´s been tougher going in showrooms since then. The housing sector appears to have bottomed, but house sales are off since the government stopped handing out tax credits to buyers and borrower defaults continue to increase. After Christmas, retailers breathe a sigh of relief-they registered some modest gains during the holidays off last year´s horrendous results, but wonder if consumers have tapped themselves out. Banks stock prices rebound and so do bonuses, but they aren´t lending much and haven´t had to recognize all the bad assets on their books yet even after hundreds of billions of dollars in various federal capital transfusions. The stock market has scored a very healthy rebound, including REIT shares, but you need to wonder seriously whether players haven´t over anticipated the recovery.

So the past few months haven´t been totally reassuring. Then you size up the past 10 years-those numbers about zero net jobs growth. Zero after all the tax cuts, low interest rates, internet breakthroughs-zero!!! And now the President promises to create green jobs through tax credits. That should help fill the jobs gap, which some economists estimate at around 10 million given on-going population and demographics changes. Sure, green jobs will do the trick.

The big question facing the economy and real estate markets coming into the New Year is simply what happens when stimulus runs out and the feds curtail printing money and spending it? We know we will be left with a large deficit and a ton more of debt service to pay off. The dollar has tanked and bond buyers get increasingly nervous about investing in T-bills. We know interest rates will increase.

But you also can make a good argument that without stimulus unemployment would be much higher, consumers would have totally cratered, office buildings would be emptying, and unemployment would be in the mid teens. And who knows where foreclosures would be? Stimulus has been floating the boat since most households have retrenched, businesses continue layoffs, and our biggest industry-buying stuff we really don´t need in stores is unsustainable. Yeah now that you just bought four flat screen TVs for your house you can go out and buy a 3-D model or two.

Most state and local governments have been filling budget holes with stimulus dollars. Now Arnold wants another multi-billion dollar federal care package to bail out California, and every other governor is getting on line behind him. When state governments have no more free fed dollars to use the public employee cuts will really start to kick in.

The Feds will need to exercise their own austerity programs to deal with deficits too-less government spending translates into fewer jobs for government contractors-defense industries, hospitals, arts institutions, lawyers, accountants-you name it.

With all these government supported jobs in jeopardy and stimulus ebbing the unemployment picture could get worse before it has much of a chance to get better.

And oh by the way-the commercial real estate markets haven´t hit bottom yet and are a lagging indicator.

Could we have a little more stimulus, please?