I have been challenged. My ursine friend Barry Ritholtz of the fabulous Big Picture blog wants to bet with me whether or not the U.S. economy will slip into recession in 2008. (I have been skeptical, to say the least.) Actually, it is a bit more complicated than that. Ritholtz's terms:
If a recession is eventually declared by the [National Bureau of Economic Research], and if in between the official start and finish points there is any month in the first or second quarter of 2008, I win. In other words, if any part of Q1 or Q2 2008 is part of a recession, James loses. If there is no recession, or if there is one, but it doesn't include any month in Q1 or Q2 2008, James wins. Loser buys dinner for 4, at the restaurant of winner's choice. Why 4? Winner's and loser's spouses are included. The wager includes dinner, wine, car valet, and tip. James, do we have a bet?
Now since that original post, Barry has graciously offered to modify the terms of the stake. With me being a poor-but-proud member of the Fourth Estate, and him being a big swinging whatever on Wall Street, perhaps a more modest prize would be appropriate. (Not to mention that I am in D.C. and he is in NYC, and the odds of both my wife and me getting to the Big Apple are about the same as getting a baby sitter for our six small children—zipparoo. Plus, given my lowbrow tastes, I might have chosen the Sbarro Market in Times Square.)
So here is my counteroffer: Since we are both tremendous movie buffs—particularly of the film Blade Runner from 1982, the same year that saw the start of America's quarter-century economic boom—maybe we could have the loser buy the winner five Blu-ray DVDs of the winner's choice.
(Now let me add that if the eventual result here is that the National Bureau of Economic Research finds that the economy went into recession in late 2007 but only a single quarter turns out to be negative, I will view that as a victory of sorts. Such a mild downturn would be at odds with the apocalyptic economic language coming from some quarters of the bear camp.) So, Barry, are we on?