Every month or so, we like to update the Intrade prediction market odds of a recession in 2008. As shown, after a spike in January, the contract has declined some and stabilized in the 65% to 70% range. This means the actual money is putting the odds of a recession in '08 at about 67%.
Intrade also has contracts for whether or not US GDP growth will be positive in each quarter of 2008. Based on these contracts, the odds for positive GDP growth are less than 50% for each quarter of '08, meaning investors are currently betting that we could have a recession for at least 4 quarters.
And on a side note, it's funny to see that Intrade has even made contracts for US income tax rates over the next few years. For those worried or obsessed about higher taxes, why not hedge your bets?