On Intrade.com, the probability of a formal recession (two successive quarters of negative growth) in 2008 has fallen from the 70 percent range to the 30 percent range.
Some time ago I had proposed "the N word" economic indicator, namely that things would be really bad if lots of people were talking about the idea of nationalizing the banks. That hasn’t happened and indeed the people who predicted widespread solvency problems seem to have been wrong.
Paul Krugman has had numerous good posts on the Ted spread as an indicator of ongoing problems in financial markets. I’ll say this: during the Great Depression no one had to cite a spread to convince anyone that things were going very badly.
Economic knowledge is always subject to revision, but so far the evidence points in the direction of a mild recession, in the informal sense, and that The Great Moderation is still with us.