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Recession could run deep, economist cautions

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SAN FRANCISCO -- It's clear the recession is here but how deep it goes is still an unknown, said Kenneth T. Rosen, chairman for the Fisher Center for Real Estate & Urban Economics at University of California, Berkeley. "There is a great risk here. The risk here is that we could have a deep recession," said Rosen, speaking Tuesday during an annual Fisher Center Real Estate Conference in San Francisco. In his view, there is a 45 percent chance for a deep recession, which could mean the loss of 4 million jobs and a rise in the unemployment rate to 7 percent. Rosen gives a 50 percent chance to this recession remaining mild, and a 5 percent chance to a quick recovery. The bailout of Bear Stearns rattled the nation's financial nerve centers, and there is still a lot of fear and uncertainty about the state of the economy, Rosen said. "We were on the verge of a financial crisis like we have not seen since the 1930s," he said of the Federal Reserve's in...