Economic Prognosis: Bleak!

From Kevin G. Hall at McClatchy Newspapers:
When Republicans and Democrats in the nation's capital want to make a point about the economy, they often cite Mark Zandi. A middle-of-the-road economic forecaster who speaks in plain English, Zandi increasingly has become the economic oracle of record.
The chief economist of Moody's Economy.com sat down Thursday with a small group of reporters and offered a sobering view of what he sees ahead for the U.S. and global economies.
The short version: It could be a decade before the Dow reaches 12,000 points again, the economy will grow much more slowly than the Obama administration envisions and larger, more controversial bailouts are likely to be coming soon.
Here are some of Zandi's thoughts, edited into a question-and-answer format.
Q: Will things get worse?
A: Yes, measurably worse.
Q: The administration sees strong growth from 2011 to 2015, and a solid 3.2 percent next year. Agree?
A: I think those are roughly reasonable, but they are much too optimistic for 2009 and 2010.
Q: How bad will the job market get?
A: I think the peak unemployment rate will be 9.5 percent in Q2 (second quarter) of 2010. That will be consistent with total job losses of almost 7 million from the peak in December 2007 to the trough, which will be sometime in early 2010. . . . That's a quarterly average, so there will be a month that we hit a double-digit number. That won't be outside the realm of possibility.
Q: Are there bright spots?
A: I think the hallmark of the current downturn is how broad-based it is across occupations, industries and regions. You know, by our accounting 42 states are in recession . . . that leaves you eight states that are not. And they are all weakening very rapidly and they are mostly in the central part of the country, Texas being the largest of the eight. They are energy, ag and other commodity-producing economies, and they are still benefiting a bit from the very high prices that prevailed through last fall. Obviously they are weakening now because prices are down and exports of these products are falling.
Q: Are the only bright spots dimming?
A: It's very possible, in fact I'd say likely, that all 50 states will be in recession at some point in the next year or two, and that would be unprecedented. Certainly you'd have to go back to the Depression to find something like that.