Just as The Economist magazine was one of the first mainstream media sources to forecast a housing crash, it is now predicting a near-term recession in America:

America's Vulnerable Economy

The Economist
Nov 15th 2007

Recession in America looks increasingly likely. Can booming emerging markets save the world economy?

In 1929, days after the stockmarket crash, the Harvard Economic Society reassured its subscribers: “A severe depression is outside the range of probability”. In a survey in March 2001, 95% of American economists said there would not be a recession, even though one had already started. Today, most economists do not forecast a recession in America, but the profession's pitiful forecasting record offers little comfort. Our latest assessment (see article) suggests that the United States may well be heading for recession.

Granted, GDP grew by a robust 3.9%, at an annual rate, in the third quarter. Granted also, revisions may well push this figure up. But that was the past. More timely signs suggest that the economy could stall in this quarter. By early next year, output and jobs could be shrinking. The main cause is the imploding housing market. Experts said that house prices could never fall nationwide. But fall they have, by 5% in the past 12 months. Residential investment has collapsed, but a glut of unsold homes means that prices have much further to drop. Americans' spending is likely to be dented much more by a fall in house prices than it was in 2001 by the stockmarket's collapse. With house prices lower and credit conditions tighter as a result of the subprime crisis, households can no longer borrow against capital gains to support their spending.

Dearer oil is set to squeeze households further (this week's drop in crude prices notwithstanding). Consumer confidence has already fallen sharply. It cannot be long before consumer spending stumbles, which in turn would hurt companies' profits and investment. The weak dollar will boost exports, but at only 12% of GDP, exports are too small to make up for a weakening of consumer spending, which accounts for 70%.

It can happen to you
It can happen to me
It can happen to everyone eventually

As you happen to say
It can happen today
As it happens
It happens in every way.

Looking on the bright side of things, even with a recession, the forecast for search marketing is for it to remain strong.

Even Google Is Vulnerable

And unlike flashier ads that may help make new customers aware of their products or make a brand more appealing, search ads tend to be more closely linked to customers who are already likely to make a purchase -- and therefore drive sales.

"Our discussions with advertisers indicate that when marketing budgets get trimmed during periods of economic weakness, spending on media that drive sales gets cut last or not at all," Cowen analyst Jim Friedland wrote in a September research report.

Indeed, there is even reason to believe that Google could stand to benefit from a sluggish economy. As advertising budgets get lean, advertisers may rotate funds out of more expensive, difficult-to-measure and brand-building forms of advertising like television into more targeted efforts that can directly boost the bottom line.

Search advertising is a relatively new form of advertising and lacks history to draw upon. But Friedland draws a parallel between direct-mail advertising and search advertising, since both are designed with the intent of driving sales.

And he notes that advertisers have actually increased spending in every recession in the U.S. since 1950, and that the growth rate of direct-mail spending accelerated in five of the last nine recessions.

It reminds of the old saying, that the economists predicted five of the last two recessions..

I was listening to some "Doom and gloom" on National Public Radio today. They talked about company after company with severly depressed sales. And every one of them seemed to me to obviously be competing with the internet, and losing that fight. At no time did anybody on the show offer the idea that consumer money had moved to the internet yet they all described confusion as to why the constant sales downturn yet our economy was not devestated, and I again thought "Internet".

I'm not saying we are or are not going to experiance a recession, but it's amazing how so many seem to be in total detial of internet growth and how our economy is moving to the internet.

Dec. 3 (Bloomberg) -- U.S. corporate profits are in a recession, and the entire economy may not be far behind.

Slower sales and higher energy and labor costs are forcing companies from Bear Stearns Cos. to Pitney Bowes Inc. to reduce spending and hiring. Their efforts to keep earnings from eroding even further raise the risk that the economy, already weakened by the steepest housing slide since 1991, may shrink sometime next year.

"The earnings recession has already arrived,'' says David Rosenberg, North America economist for Merrill Lynch & Co. in New York. "We are going to see an economic recession in '08.''

Click here to read the rest of the article.

The question on everyone's lips here is...

Are domain prices going to go down, stay the same, or go up?

Pundit Alert!

UCLA Forecast says US economy will avoid recession

http://www.msnbc.msn.com/id/22116055/

Originally posted by doughmein
Pundit Alert!

UCLA Forecast says US economy will avoid recession

http://www.msnbc.msn.com/id/22116055/

Let's create UOB (University of Bull) and publish all kinds of domain related forecasts...

"UOB Forecast says that .tl domains are the next land-rush. Early indications that prime generics will be worth in excess of $100,000 each"

"UOB published a peer paper on Saturday announcing the imminent collapse of the .com DNS system. Servers around the world will be affected by the little-known WPQX buffer cache limit which means that on Monday, all domains ending in .com will fail to resolve for 3 months. Head of Economics at UOB, Wir Havinalaff recommended all websites acquire the .me.uk version of their domains."

Originally posted by doughmein
Pundit Alert!

UCLA Forecast says US economy will avoid recession

http://www.msnbc.msn.com/id/22116055/

The entire world is on the brink of another Great Depression (I'm calling this one the "Great Collapse"), and this guy doesn't think the U.S. will experience even a run-of-the-mill recession. It must be all sunshine and gumdrops in his world.

Well, allow me to retort! Here's my prediction: by the end of 2008, the U.S. will have experienced two consecutive quarters of negative GDP growth, and one of the main issues in the 2008 elections will be candidate plans to end the recession. Gold will be over USD $1000/oz.

I'm bookmarking this page for review a year from now (Saturday, 6 December, 2008), and we'll see who was closer to reality, namethink or the UCLA Anderson Forecast. (And we can share a sad chuckle at how far off the mark this report was.)

Special note to Domo (and other greenback optimists): I'll put my money where my mouth is on this one. If my prediction is closer to reality than the one offered in this report headed by Doctor Edward E. Leamer--and I'll accept the judgement of my fellow DomainState members on the matter in a thread poll--I'll donate $100 to Domo's charity of choice. No reciprocal committment needed.

Quote from article:

Despite plunging housing values, rising oil prices and credit problems that continue to plague Wall Street, the nation's job market is unlikely to suffer the kind of steep losses that would tip the economy into recession, according to the quarterly Anderson Forecast by the University of California, Los Angeles.

"We still think an official recession is not in the immediate future," concluded Edward Leamer, director and co-author of the forecast set for official release Thursday.

Some economists and financial pundits have warned the nation will sink into recession, with a wave of reset adjustable-rate mortgages tearing through the economy next year.

Leamer, however, insisted the housing woes alone won't hobble the economy enough to cause two consecutive quarters of negative economic growth in the nation's gross domestic product _ the standard used to define a recession.

Originally posted by devolution
The question on everyone's lips here is...

Are domain prices going to go down, stay the same, or go up?

I would have thought most likely down, unless the online area doesn't get effected too much which is a possibility. The other big wildcard is simply the scarcity of higher quality names which could result in prices still rising even if ppc fell (but probably rising at a lsower rate than in the past).

Personally I am very cautious about the current domain market though, I think it is probably the riskiest time in years with prices rising (with speculation levels perhaps higher than any time in the past) despite a deteriorating economy.

Morgan Stanley Issues Full US Recession Alert

Morgan Stanley has issued a full recession alert for the US economy, warning of a sharp slowdown in business investment and a "perfect storm" for consumers as the housing slump spreads.

Why I am not surprised?

China takes Morgan Stanley

I think newspapers are dead men walking - all their classified ads are moving online to craigslist, specialty sites, ebay, etc...

Yellow pages will probably start losing advertisers also. Right now it's still probably easier to open Yellow pages and in 30 seconds you can get a list of local plumbers with bits and pieces of info on some of them. If people like plumbers build even one page websites for themselves and there is a good way to find them quickly, then Yellow pages will start dying off as well.

Originally posted by irbis10
I think newspapers are dead men walking - all their classified ads are moving online to craigslist, specialty sites, ebay, etc...

Yellow pages will probably start losing advertisers also. Right now it's still probably easier to open Yellow pages and in 30 seconds you can get a list of local plumbers with bits and pieces of info on some of them. If people like plumbers build even one page websites for themselves and there is a good way to find them quickly, then Yellow pages will start dying off as well.

Hi Ibris10, was you going to get here ?:

"online advertising is a real industry,"