Recession in '07?

From the Globe and Mail:

Merrill economist sees U.S. downturn in May

Grab a red pen and circle May, 2007, on your calendar.

That month is full of foreboding for the U.S. economy, according to Merrill Lynch & Co. Inc. North American economist David Rosenberg, who sees inauspicious portents in the data.

"They all put a big fat bull's eye on May, 2007, as the month that we could see an actual economic turndown," he says in a note to clients.

The economist adds that the outlook is gloomy no matter what action the U.S. Federal Reserve Board takes on interest rates. "It may well be too late and the seeds could well have already been sown for an outright recession next year."
...
He reminds clients that, at this time in 2000, the Nasdaq composite index was down roughly 30 per cent from its peak and today the home building stocks are down more than 40 per cent from their highs. If the home building group were to mirror the performance of the technology bubble in the last cycle, then the group would have another 30 per cent to fall, Mr. Rosenberg cautions.

The historical record tells us that housing is the "quintessential leading indicator," says the economist, and as a result the impact on other segments of spending is significant.