Are we there yet?

Recession Chatter gets louder.

An Article from Fortune Magazine Oct. 15, 2007

Not, surprisingly, the R-word has dominated talk among bankers for weeks. “We’re very close to stall speed in the economy,” says Paul Kasriel, director of economic research at Northern Trust.

Of 50-plus economist surveyed by research firm Blue Chip Economic Indicators, not one is predicting a recession. They still expect GDP to grow 2.6% next year. But the broader definition, one put out by the Nation Bureau of Economic Research, is simply a “significant decline in economic activity, spread across the economy, lasting more than a few months.”

Of course, the biggest driver has been the downturn in the real estate market. After 15 years of rising home prices, a cooldown was expected. But the sharp price drops this summer showed that the downturn is deeper and broader than previously thought. In July home prices fell 4.5% from a year earlier, according to the S&P/Case-Shiller home price index. Since the index began in 1987 the only worse decline was in 1991. “We are only just beginning to see the spill over from housing,” says Kasriel.