No change in chance of a recession, still 70%

Trading on the Intrade Prediction Market is still indicating about a 70% chance of a recession in 2008. In other words, no big leap since last Saturday. Even after all the turmoil in the financial markets. Even with all of the media chatter.

70% indicates people betting that there is a strong likelihood of a recession, but it still means that there is a significant amount of skepticism.

Usually I use 66% (2 out of 3) as the threshold for judging likelihood, but when the chances get stuck right near that threshold for some time, you have to wonder.

Incidentally, trading on Intrade rates Hillary as having a 67% chance of capturing the Democratic nomination and Barack as having only a 33% chance. I would note that people on Intrade gave Barack a 67% chance for winning New Hampshire on the eve of that primary and we saw how that movie ended.

In short, we still aren't seeing the kind of "data" that would push people to the 85% or 90% level of belief in the inevitability of a recession.

Recession is still more of a media fiction than a reality. But stay tuned.

-- Jack Krupansky