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Economists Place Their Bets With Predictions for 2009

In the second of his new series on making sense of financial news, Paul Solman asks economists for predictions for the year ahead and interviews "standup economist" Yoram Bauman, who mines financial news for comedic material.

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  • JIM LEHRER:

    And, finally, tonight, the second in our series on making sense of financial news to explain what lies behind the breaking developments on the NewsHour and on our Web site.

    Last week, the NewsHour's economics correspondent, Paul Solman, looked back at the past year to get some understanding of what happened.

    Well, tonight, he looks ahead.

  • GEORGE ADAMS, President, Adams Steel:

    Every week, we have a conference call with our managers, all right? And we joke on our conference call that my dog could do a better job picking the market than me.

  • PAUL SOLMAN:

    George Adams, described to us as unequivocally the most important man in the U.S. scrap metal industry. Throughout 2008, he predicted that the price of his key product had peaked, and now was the time to sell.

  • GEORGE ADAMS:

    And every month, I was wrong. OK? And I did that nine for, what, nine months in a row — or eight months in a row, until the market completely fell out of bed, and I looked like a genius, OK? And I tell people, if you say the same thing month after month and you do it, you know, eventually, you're going to be right, OK?

  • PAUL SOLMAN:

    Economic forecasting.

    While in California recently shooting several stories at various locations, the Tummy Tuck jeans factory, the largest scrap metal operation on the West Coast, we asked everyone we met to predict the year ahead, from businessmen at work, to economists at their annual convention.

  • MARTIN FELDSTEIN, Harvard University:

    In 2009, the economy is going to continue to slide down. We have not seen the bottom.

  • PAUL SOLMAN:

    Martin Feldstein of Harvard.

  • MARTIN FELDSTEIN:

    I think we will be lucky if we see a bottom and a beginning of an upturn by the end of 2009. But that doesn't mean that, in the spring of 2010, they will be as good as they were in 2007. We have got a — a long climb ahead of us.

  • PAUL SOLMAN:

    Feldstein, glum, Ken Rogoff, glummer.

  • KENNETH ROGOFF, Harvard University:

    I would guess that, if we're lucky, we will be at zero growth at the end of next year. And unemployment is likely to rise for a long time after that, certainly into double digits, something that was unimaginable.

  • PAUL SOLMAN:

    Not all the forecasts were so bleak.

  • ED LEAMER, UCLA:

    Keep in mind that, as rapidly as the fear gripped us, it can also lose its grip just as rapidly.

  • PAUL SOLMAN:

    UCLA's Ed Leamer.

  • ED LEAMER:

    The first quarter is a big negative, and then the economy improves.