Floyd Norris Shocks and Soothes

Last Updated Oct 24, 2008 4:56 PM EDT

Flitting through Floyd Norris's blog at market close, I found something that made me want to sell my house while I still can. He posted on a new report from the Jerome Levy Forecasting Center at Bard College, which Norris called a mixture of 'Told ya so" and "ain't seen nothing yet."

The Levy Center predicts (I didn't find a link yet, so I'm typing this out):

  • consumer spending will be even worse than the current pessimistic expectations
  • state and local governments will see economic problems that are 'shocking'
  • Home prices will probably fall another 20%
  • many emerging markets will enter into an economic depression
  • U.S. unemployment will hit 10%
(Go read the Norris post for more)

But after the market closed at about the level it sustained for most of the day, with none of the ugliness we saw in international markets, Norris put up numbers showing, again, that while this has been a terrible two-month period for the markets, the Dow isn't down as much as it was in 1987, let alone 1929 or the all-time worst in 1932. The S&P, meanwhile, has so far had its second worst two-month period ever. But Norris, while acknowledging that October still has a week of trading left, argues that this two-month period won't prove as bad as 1932, nor even 1940, when the Nazis were rolling through Western Europe. He finds comfort in numbers that otherwise look distressing. Maybe I'll keep the house. Moving, after all, costs money.

  • Michael Fitzgerald

    Michael Fitzgerald writes about innovation and other big ideas in business for publications like the New York Times, The Economist, Fast Company, Inc. and CIO. He’s worked as a writer or editor at Red Herring, ZDNet, TechTV and Computerworld, and has received numerous awards as a writer and editor. Most recently, his piece on the hacker collective the l0pht won the 2008 award for best trade piece from the American Society of Journalists and Authors. He was also a 2007 Templeton-Cambridge Journalism Fellow in Science and Religion.