Almost eight decades later, the consultancy company that bears his name declared “the next recession will be caused by the deflating housing bubble.” By February 2007, it predicted problems in the subprime-mortgage market would spread “to virtually all financial markets.” In October 2007, it saw imminent recession — the slump began two months later.

The Jerome Levy Forecasting Center, based in Mount Kisco, New York, and run by Jerome’s grandson David, is again more worried than its peers. Its half-dozen analysts attach a 65 percent probability of a worldwide recession forcing a contraction in the U.S. by the end of next year.

That call runs counter to the forecasts of Morgan Stanley and Goldman Sachs Group Inc. The two banks posit an expansion that has plenty of room to run.

“Clearly the direction of most of the recent global economic news suggests movement toward a 2015 downturn,” chairman David Levy told clients in an Oct. 23 edition of a monthly forecasting report, which at over 60 years purports to be the oldest of its kind.

Why the gloom? Levy argues the U.S. and many advanced economies still have balance-sheet excesses exposing them to renewed financial crisis. There is limited room for policy makers to reverse any slump, and low inflation risks tipping into deflation in many parts of the world.

U.S. Exposure

While the U.S. is doing relatively well, Levy is worried that at about 13 percent of gross domestic product, U.S. exports represent their largest share ever.

American companies also are getting a historically large proportion of earnings from abroad and households are vulnerable to any bear market because their ratio of stocks to disposable income is higher than at any point aside from the start of this century, he said.

Granted, there have been some misfires. In September 2010, Levy told Bloomberg Television that he saw a 60 percent chance of another U.S. recession. Instead the world’s largest economy has gained in strength.

The upshot of the latest forecast is that even if a slump is avoided, the Federal Reserve will keep interest rates near zero until the next decade, according to Levy.

“Without first strengthening substantially, we think it highly unlikely that global financial stability will hold together long enough for the Fed to signal and execute a rate increase,” he said.