Obviously Merrill forgot to speak with the all-knowing Larry Kudlow of CNBC who sees bright skies and happy days for all. Third term, anyone?
"I still maintain the business cycle is bigger than the government," Merrill's North American economist David Rosenberg said at a client conference in Singapore.
He said the world's largest economy was already in recession as consumer spending and confidence had fallen and jobs losses were rising, with the number of hours worked having fallen sharply.
Describing housing as "the quintessential leading indicator," Rosenberg, a long-time bear on the U.S. economy, said he expected home prices to fall another 15-20 percent before stabilizing.
He also predicted inflation in the United States would slow as consumer spending weakens, and that the Federal Reserve would be forced to cut rates further to deal with the recession.
