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Economist: Odds rise for economic recession

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SAN FRANCISCO -- There is a 45 percent chance that the U.S. economy will spiral toward recession in 2008, as real estate foreclosures and gasoline costs continue to escalate, economics professor Ken Rosen said in a presentation today. Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at University of California, Berkeley, said that if gasoline prices exceed $4 a gallon and oil prices top $100 a barrel, "it's a pretty sure thing that a hard landing rather than a soft landing (will) happen." He advised attendees of an annual Real Estate and Economic Symposium, organized by the center, to plan for the worst. Home prices may already have fallen about 5 percent to 7 percent nationally, and those price declines may represent only about half of the declines still ahead. New-home prices may fall about 25 percent in some markets. "It all goes back to the fact that we had a bubble in housing created by bad lending practices," he said. While the volume of foreclosures is re...