Chance of Recession: 38%

Wall Street Journal recently surveyed 52 economists and the consensus is that the risk of recession stands at 38%. In June of this year, that number stood at nearly half the current prediction.

The Fed seemed to stand in agreement; yesterday, they cut the funds rate to %4.25. Many of the economists also foresee more rate cuts in the future, beginning in January with a predicted quarter-point cut. Much of the risk is attributed to the loss of home equity and the related sub-prime mortgage securities crisis. Home prices will continue to decline -- Office of Federal Housing Enterprise Oversight index steepened their prognosis to a 3.5% drop in home prices from their November prediction of 2.6%.

Recession Special image by wallyg [cc, 2.0]