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The Fed added: Downside risks to growth remain. — Oppenheimer Holdings Inc., upon reporting profit for the fourth quarter, noted the probabilities of a recession have dramatically increased. The investment bank turned a profit even though oil prices reached $100 a barrel, the dollar continued to plunge and a crisis gripped certain critical financing markets.

But Oppenheimer said recession is more likely as banks repossess more homes from delinquent borrowers, some markets remain in seizure, home prices slip and unemployment ticks up. — The founder and chairman of Legg Mason Inc., Raymond A. Mason, said the fourth quarter was among the most volatile periods the market has experienced. The decline in the equity markets was harsh and caused substantial investor worry, he said.

Throughout the quarter, concerns about the dollar, a potential recession and the financial sector at large were widely felt around the world. The bond markets continued to show significant strain, with little reaction to government stimulation. — Citi Investment Research analyst James Neale said he is more concerned about what effect a recession would have on industrial demand for oil than on demand from consumers.

We do not anticipate the recession will materially disrupt the balances of supply and demand, thereby leaving oil prices heavily exposed in 2008, he said. — ThinkEquity Partners analyst Jonathan Hoopes said: If the current fears of global recession prove correct, we envision a commodity and equipment marketplace that is even more heavily weighted to the supply side, which would suggest lower prices and less competition for inputs to the solar PV balance of system.