Just for the record, I think there is a recession coming. I don’t know how we could possibly avoid it.

I just think the early 2007 timeline is a bit early, given the painfully slow speed at which this bubble is deflating. Not only does housing have to come down alot further, but the effects of that have to move throughout the economy. I just think it will take time – very late 2007 or early 2008, possibly highlighted by a very nasty 2007 holiday retail season.

Remember – we are boiling the frog alive, here. Not dropping it into a pot of boiling water.

Also, San Diego is on the front of the housing bubble deflation. The rest of the nation has to experience the economic pain in order to make the nationwide numbers say “recession.” SD may hit recessionary conditions earlier, but the national numbers should lag SD by several months.