There are times when I have been behind the times but not like the investment gurus that laughed at Peter Schiff over the past few years as he called it like he saw it, and he happened to be spot on with his facts and his conclusions. For those that follow the blabbing of Arthur Laffer -- he in particular never looked more laughable than he does in this compilation video of his business show appearances, that has been floating around the web for a while.

"The markets seemed on the verge of a major sea change," says economist David Smith. In his Cyclical Investing Quarterly, he offers a fascinating review of his concerns for the risks that lie ahead.

"Recent economic data provides considerable foundation for Main Street fears and little support for Wall Street hopes.

"Two of the economy's mainstays, housing and autos, continue to tank and consumers are being squeezed between falling real incomes and rising cost of living – notably in energy and food, the two components eliminated from the 'core' inflation indices by those who claim inflation is 'under control.'

"The consequences of these economic stresses can be seen in falling consumer confidence, weak consumer spending, rising bankruptcies among retailers and defaults among un-creditworthy borrowers.

"The knock-on effects include a global crisis in the financial sector, a pullback in U.S. business spending,
mounting layoffs and an uptrend in unemployment, all of which, in my view, pretty much puts the nail in the coffin of the Goldilocks scenario.

"This view is seconded by chief executive officers in the financial-services industry, who placed the likelihood of a recession at 88%, with one in three putting the odds at 100%.

The New York Times asked six economists whether the U.S. is in a recession. Their conclusion seems to be that they don't know whether we're in a recession but that the housing market slowdown and the related debt bomb could lead us there.

I'm not an economist but I played one in 2004. That's when I worked with the John Kerry campaign and had a chance to meet one of the economists -- Jason Furman -- whose op-ed appeared Sunday. I also appeared opposite another of the contributing economists, Kevin Hassett, in an interview on Wall $treet Week with Fortune the day after the Democratic National Convention.

I don't know what 2008 will bring. But I think it depends on two factors: whether the Bush administration decides to take any radical policy moves or just twiddles its thumbs until its term expires, and how deep and wide the global impact of the housing market slump and the related credit market freeze will be. To address the analysis behind this forecast, here are my thoughts on five key questions:

Goldman Sachs (NYSE: GS) says that the odds of a recession in the U.S. have moved from 30% to a range of 40% to 45%. But economists at the investment bank "now expect the U.S. Federal Open Market Committee to cut interest rates to 3% by mid-2008, down from its earlier forecast of 4%," according to MarketWatch.

Over at the U.S. Conference of Mayors things look a little different. They commissioned a study by Global Insight Inc., which suggested that the value of U.S. housing will fall $1.2 trillion next year, and that foreclosures could hit 1.4 million. But "Global Insight predicted that the economy would grow at a 1.9% rate in 2008," writes The Wall Street Journal. The firm even expects modest job growth.

Between the two opinions there appears to be little beyond smoke and confusion. As the year wears on and the stock market falls, the number of views about the 2008 economy grows, with little consensus.

That leaves investors to ponder the most important factor in most of the studies. Will housing problems sink the rest of the economy, or can the damage be isolated to those consumers who have problems directly related to their homes?

No one can answer that. No matter who issues them, the opinions are only a guess.

Douglas A. McIntyre is an editor at 247wallst.com.