Shiller Sees ‘Substantial’ Probability of Recession: “Forecasting models would say no” on the question of whether the U.S. will face a double-dip, Shiller said. “But I’m seeing signs that encourage me to worry about that.”...The summer season could see a pickup in prices, he said, but “I still worry about the general downtrend.”
“There might be a turnaround if psychology changes,” he said. But “I fear that it may just continue down.
“It just doesn’t look good,” he said in an interview with The Wall Street Journal...
Delong: But the underlying VAR correlations [of the aforesaid forecasting modles] still largely come from an age of inflation-fighting recessions and rapid bounce-back. Thus that is an input to what the markets are forecasting. And is that input still valid for today?
That is why I am alarmed