CHICAGO - Walter Zimmermann, chief technical analyst at United Energy, sobered the audience at the NACS State of the Industry Summit yesterday with detailed evidence that the economy isn??t coming up roses any time soon.

Zimmerman relayed the following economic news:

• 30 percent of foreclosures are strategic and relate to consumers being able to rent a house for less than they can pay a mortgage.
• If banks had to write down the value of all their mortgages to current home values, they would have to write off $900 billion. "And banks do not have that as a net worth."
• He predicted that the real estate market still had four years before it bottomed out.
• Consumer credit is in a nosedive, lending is tight and there is a "terrible risk" of deflation. "Deflation can grind the economy to a halt," he said.

Finally, summing up the global economic problem for the next several years, Zimmermann pointed to a revenue shortage. "There is not enough revenue to support the debt that exists...We believe that there is caution if not alarm [on the horizon] for the economy."

Tom Kloza, chief analyst at OPIS, said that he would be less technical than Zimmermann, though he still delivered the same sense of restrained economic optimism.

"It's been a quiet first quarter of 2010," he began, "with relatively small day-to-day [oil] price changes...But I don't expect that to continue. If volatility is your friend, it's coming back. And he's like the guy who empties the chemical toilet in National Lampoon. He's coming back and he's annoying."

Kloza offered several predictions, including:

• He was 95 percent certain that the EPA would approve the higher percentage for ethanol. "You must consider how to deal with cars that come in and are not supposed to have anything higher than E10."
• Refining margins for gasoline will not be great from May through August (though he did not offer a time frame).

"There is news and there is propaganda," Kloza said, referencing CNBC and other cable news networks. As such, he suggested that retailers should not get lost in the hype, but focus on the evidence.