Two major Wall Street firms [Merrill and Goldman] have finally thrown in the towel and are now calling for a recession. For a variety of reasons, Wall Street is usually late to call downturns, so this probably means that 1) we’re already beginning to come out of the recession, or 2) this recession is going to be a doozy (the more likely explanation, in our opinion).
There’s still a number of perkies around – my name for them – saying things are really fine fine just fine and these little economic speedbumps should be seen as buying opportunities. But more and more it’s becoming apparent that millions of coming foreclosures, trillions of dollar of financial toxic waste on the books, rising commodity prices, and a falling dollar do not portend well for financial stability in 2008.
