Shilling's forecast is based in part on current economic conditions, and partly on history. We’re already two years from the end of the last recession and three years from the business cycle’s previous peak, in December 2007.
Historically, economic expansions last about three years, especially in long down cycles of the kind he thinks we’ve been in since 2000.
So, he’s looking for a brand new cyclical recession beginning in 2012.
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