So economists are predicting the recession will end this year. They reckon the housing market will bottom out and they don't see the recession lasting longer than the first quarter of 2010. Still, they're hedging their bets, saying the recovery will be slow and painful.

It's hard to believe them given how wrong they've been so far.

A prime example is housing prices. The New York Times reports that the Standard & Poor's Case-Shiller Home Price Index has seen house prices falling a massive 18.7% in 20 US cities. That does not sound like a market that's bottoming.

As the the Lex column in the Financial Times notes, people are just kidding themselves if they think this will blow over this year. "Investors are pinning their hopes on other people's hopes that things will get better. These are probably the very same people who were confident about property prices two year's ago. Sure it is important to identify turning points and markets are forward-looking. But the truth remains that the hard data - house prices, unemployment, trade and corporate profits and inflation - all remain dreadful. Consumers can dream all they want."

Economist Nouriel Roubini predicts that the US will have sub-optimal growth for two years and that there is too much optimism.

Personally, I have given up believing in economists. Indeed, I blame this financial crisis on economists. I explain why in my piece here.