by Calculated Risk on 8/08/2005 07:31:00 PM

Barry Ritholtz, chief market strategist for Maxim Group and author of the excellent blog "The Big Picture" announced today:

"We expect a recession in the 2006-07 time frame."

In an excellent summary post, Mr. Ritholtz argues that the slowing housing market will lead the economy into recession.

Two major themes we have been discussing for quite some time appear to be coming together:

A) Real Estate, though not a bubble, is an extended asset class overdue to retrace;
B) RE has been the dominant sector in the US economy since the recession ended.
...
Given the significance of this sector and the relative modest strength of the rest of the economy, we suspect the Fed will fail in their attempt to engineer a soft landing.

We expect a recession in the 2006-07 time frame.

Note that Mr. Ritholtz doesn't think the housing market is a "bubble", but an "extended asset class". I think he just defines a bubble differently than me, but the result is the same. Its still too early for me to call a recession.