The National Asociation of Business Economists NABE has just released its survey of 45 well known economists. 24/7 Wall Street is skeptical, but how can you go against 45 experts?:

“Nearly 75% of those who responded to the survey said that the recession will end next quarter. Not a single economist thought that the recession would move beyond the first quarter of 2010.

Hailing a recovery may be a little premature. Several things could happen in the next quarter and each one could contribute to a continuing contraction of GDP.

Oil prices may still go up much further. Some OPEC members say that they expect oil to be over $70 by the end of the year. Exploration and production of crude is demonstrably down. A prolonged period of low oil prices took away the incentives for spending money to increase supply.

China is using more crude than it did in the last quarter of 2008 and the first quarter of this year. There are two theories as to why that is true. One is that the economy in the world’s most populous nation is improving more sharply than expected. The other is that the country is increasing its strategic oil reserves in case of a supply interruption. Oil prices would also rise if there are credible forecasts that the upcoming winter will be unusually cold in the northern hemisphere.

In general high oil prices mean less disposable consumer and business spending which is not conducive to rising GDP.

A third quarter recovery is not likely. And, the economy could actually get worse early next year.”

Swamp Report is feeling a little Contrarian, or maybe just plain contrary too… What is NABE’s track record? Well here’s what the WSJ reported on February 28, 2008:

“U.S. economic growth will slow to a crawl but avoid recession during the first half of this year while inflation will continue to rise, economists surveyed by the National Association for Business Economics said.

The association’s latest quarterly survey shows 55% of respondents expect the nation will avoid a recession. But they expect growth of the gross domestic product of just 0.4% at an annual rate in the first three months of 2008, followed by a 1% pace over the following three months.”

Hmmm… “stagflation and avoid recession”…Looks like NABE’s track record is questionable at best…Maybe better to bet opposite from whatever they think…

We rarely agree with Dr. Reich’s policy prescriptions, but we gotta give him this: his current assessment is reasonable:

“But we’re not at the beginning of the end. I’m not even sure we’re at the end of the beginning. All of these pieces of upbeat news are connected by one fact: the flood of money the Fed has been releasing into the economy…The real question is whether this means an economic turnaround. The answer is it doesn’t.

Cheap money, you may remember, got us into this mess.

Some of the big banks will claim to be profitable, but don’t bank on it. Neither they nor anyone else knows what their assets are really worth. Besides, the big banks are sitting on over $500 billion over taxpayer equity and loans. Who knows how they’re calculating profits? Most importantly, there’s still a yawning gap between the economy’s productive capacity and what it’s now producing, and absolutely nothing will turn the economy around until that gap begins to close.”

Dr. Reich is right on, “don’t bank on it“.

The EIU’s Robin Bew was interviewed on April 1 about his current expectations for the world economy.  He finds little to indicate a quick turn around. Here are a few excerpts from the transcript (we added the emphasis).

Regarding a growth forecast and the time until world recovery begins:

“It became clear that the pace of economic decline actually accelerated during the fourth quarter and the monthly data that we’ve been getting since then (at the moment we have figures for January and some numbers for February) suggests that there was no slackening in that pace of decline. In fact, if anything, it might have got even worse. So we’re now looking at a situation where output is declining very rapidly in a number of major markets – America, as you said the eurozone, also Japan.

So a very, very significant negative outcome. And even if you did see a recovery later on this year, and we think that’s highly unlikely, you would still end up with a terrible number for the year as a whole. In reality, I think we’re not looking at a recovery until well into 2010 or maybe even 2011.”

Regarding world trade:

“Our forecast at the moment for world trade volumes is that they will shrink by about 6 per cent this year, something like that. Now in cash terms, it’s a whole lot worse. If you look at a market like China, which is one of the world’s biggest trading powers, trade there, cash value of their exports is off 20 per cent. Some markets (Japan for example) off 50 per cent. So ‘collapse’ is not too strong a word.“

Regarding the banks and lending:

“Obviously many banks have been nationalised, the ones that haven’t are still taking a lot of money from the governments and they’re desperately trying to repair their balance sheets, so it is going to be very unlikely to start extending credit until that balance sheet repair is done and we’re a long way off that.

But I also think it is important to remember that actually demand for many types of credit has also collapsed.”

Regarding oil prices:

“Well, we’re in an environment now where demand is not rising very quickly at all. In fact, in many markets it is falling and that’s a recipe for oil prices to stay relatively depressed.”

By way of summary:

“Our expectation is by the time you get to the end of this year the best you can say is that perhaps we’ve stopped falling. But in terms of actually getting some growth, even very modest growth, I think you’re looking into 2010 for that and in terms of the sorts of growth which is going to make a difference to how you and I actually feel, I think you’re looking probably to the end of 2010″

Obviously, the Economist’s forecast differs sharply from those expecting a V shaped recovery in the second half of 2009.

The Baltic Dry index is a little manipulated number which measures the cost of world shipping.  There is little to indicate a recovery in economic activity in the chart below: