Recessions are not only hard to predict, they're also sometimes hard to identify until after-the-fact. For example, as Dan Gross describes in this NYT piece, back 2000, very few economists saw any trouble on the economic horizon. Many economists, in fact, kept pooh-poohing the idea of a recession until the government figured out (through data revisions) that we were already in one.
These days, few economists are expecting a recession. The sub-prime woes, the bull theory goes, are limited to a tiny segment of the mortgage market, the housing recession won't spill over into the rest of the economy, the ever-optimistic consumer is charging right along...etc. The stock market, of course, is telling a different story. The market doesn't always get it right, but it probably gets it right more often than economists (which isn't a knock against economists: If predicting the future were easy, everyone would do it).
In any case, given what happened last time (optimistic economists and investors + tanking market + deteriorating fundamentals), perhaps we should stop asking whether we are going to have a recession and start wondering whether we are already in one.
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