The 'R-Word' Surfaces on Wall Street

'Odds of a recession are pretty damn high,' says analyst
By Jim O'Neill,  Newser Staff
Posted Nov 27, 2007 12:38 PM CST
The 'R-Word' Surfaces on Wall Street
Trader David R. Campanile, left, and others react in the Standard & Poor's 500 futures pit at the Chicago Mercantile Exchange in Chicago on Wednesday, Oct. 31, 2007.   (Associated Press)

Wall Street has the recession jitters: Markets are down 10% since October, the S&P 500 is down as analysts predict depressed earnings, and T-bills are down on anticipated Fed rate cuts. But there’s a flip side: Holiday sales gained 8.3% over 2006, unemployment is at 4.7%, and a slowdown doesn’t mean recession, reports the Washington Post.

But don’t try to paint a bright picture for Wall Street. “We believe we are going to see a recession in '08," Merrill Lynch analysts wrote yesterday. In a tail-wagging-the-dog effect, recession expectations could result in one because of how the markets are part of mainstream America. "These things feed off each other,” said one economist. (More US economy stories.)

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