In a Bloomberg video David Rosenberg, chief economist at Gluskin Sheff & Associates, says there is a 99% Chance of Another Recession by 2012. Rosenberg also talks about the outlook for the U.S. economy.
Bloomberg: How Certain are you that we may be headed for a recession
Rosenberg: I think that by 2012, I would give it a 99% chance. I say that because as an economist, you have to be part historian. When you have a manufacturing inventory cycle recession, they are usually separated 5 years apart. But when you have a balance sheet recession, credit contraction, asset deflation (for example residential real estate), the downturn tends to be separated every 2 to 2.5 years. ... Economists call this a soft patch. It's not like this is a soft patch. Basically, when all the stimulus is gone, you get to see what the emperor looks like disrobed. It's not a pretty picture.
No Double Dip
Rosenberg goes on to say it's a second recession, not a "double dip" and more stimulus is coming once the "Fed sees the white eyes of the economy".
Given that there is no incentive in Congress for more stimulus (nor should there be), Bernanke will have a tougher time, this time, unless there is a significant drop in oil and food prices.
(see video below)