Behind the Numbers, Gary Shilling

"I think this is going to be a serious recession that consumes the rest of the year," notes Gary Shilling, president of A. Gary Shilling & Co. Shilling gives three reasons why the economy may not bounce back until 2009–the deepening housing collapse, the negative effects of the housing collapse on consumer spending, and the spreading of the financial crisis beyond housing and into commodities, leveraged loans, commercial real estate, and emerging market debt. As for his allocation, Shilling has a majority allotted to bonds, particularly Treasuries. "I like Treasuries because rates are going down and there will be a lot of appreciation," he says.