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[IMGCAP(1)]NEW YORK CITY-The purview of the current market is grim, yet tentatively optimistic. Conservative lending practices, the government’s task of bailing out lending institutions, and a market scratching for a foothold, render recession definitions irrelevant. The past is the past, and now is the time to look toward the future to see how long the tailspin will last and who will be left standing.

John Salustri, editorial director of GlobeSt.com, addressed these issues on GlobeSt.com’s hour-long US Economy: Crisis and Cures webinar, held Thursday. (Listen to a replay of the event here.)

[IMGCAP(2)]Approximately 250 webinar attendees listened to panelists, which included: Hessam Nadji, managing director of research services at Marcus & Millichap Real Estate Investment Services; Howard Roth, global and Americas real estate leader of Ernst & Young; Raymond Torto, global chief economist of CB Richard Ellis; Ed Friedman, senior economist at Moody’s Economy.com; and Gary Zimmerman, senior economist of the Federal Reserve Bank of San Francisco.

[IMGCAP(4)]The webinar began with the discussion of how to define the current crisis. While some panelists, such as Friedman said that we are in a recession, pointing to evidence that the economy has been contracting, others, such as Torto, said that it should simply be called a downturn. “I don’t think it is anything less than what we expected a year ago,” he said. “It is a relatively mild downturn, compared to what we have seen in the last two downturns. But no matter what you call it, it all stinks compared to what it was a couple of years ago.”

[IMGCAP(3)]Roth, pointing to the real estate perspective and frozen credit market, said that “things are “pretty brutal.” He said that “we are at a significant recalibration of values,” and “everyone for the most part, is staring at each other.”

Nadji said that there is a lot of uncertainty on the horizon and that it is more of a psychological recession than a structural one. “The uncertainty is causing CEOs to stop corporate investment, and causing consumers to stop spending,” he said. “Risk factors are still highly elevated.”

[IMGCAP(5)]Zimmerman agrees that the economy is certainly in a slow down. “We’ve got some issues here,” he said. “Things are slower than they were two years ago.” Zimmerman also pointed out that payroll employment numbers have deteriorated a bit, primarily in the goods-production sector. “The declines that we have seen in job loss aren’t nearly as large as the prior recessions, which is the good news so far.”

With the credit crunch issue resulting in tighter lending standards and higher-risk premiums, and with the housing price index futures continuing to plunge, there is a lot that has the potential to keep things slow for a while, Zimmerman said, adding that things will continue to slow down a bit before they pick up. “We think that 2009 is going to be better, but still, there are uncertainties.”

[IMGCAP(6)]With recent Federal Reserve activity, such as the takeover of Bear Stearns by JP Morgan Chase, many insiders see the Feds as a key to the solution. Friedman says the Fed is critical, but he notes that “it’s really up to the treasury.” The investing public needs to know that there is going to be that backstop by the government, he says, adding that the second step is figuring out what the Fed needs to do in the long run to make sure that crisis’ like these are reduced. “What needs to happen is tighter regulation of investment banks and GSE.”

Friedman notes that it is clearly a very difficult job for the Fed and the government because down the road, the issue becomes, “how much new regulation, and how to do it,” because if you over-regulate, he says, there could be an over utilization of private equity. “You want to strike some kind of a balance.”

Torto and Roth agreed that it is nice to see some direct leadership stepping up. “I think it is helpful to really see the House rescue package that was passed Wednesday in terms of them stepping in and providing credit,” Roth said. “You can really see some immediate actions pretty quickly, which is a positive sign.”

Torto said, given what happened in 2006 and 2007 with the financial markets, “we should have expected what we have received here. What we are in is a period of correction.”

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