Merrill Lynch is Bearish on the Economy

I wrote a few weeks back about Alan Greenspan's recession prediction. Well it seems that Alan isn't the only one predicting a recession these days. Merrill Lynch issued a research report last week that came to the same conclusion. You can read the report here. They are urging Bernanke to cut interest rates this year to avert a recession.

The bottom line of all this is that it is becoming increasingly likely that a decline in home prices could lead to a recessionary environment. Therefore, following the leading housing indicators will be very important this year. As an investor facing these economic predictions remember that there is no replacement for a disciplined multiple asset class investment strategy. Don't let predictions scare you into changing your portfolio allocations. Not even Alan Greenspan and Merrill Lynch can see the future.