In this WSJ.com clip, Barry Ritholtz, CEO of securities analysis company Fusion IQ, shares his rather gloomy Outlook 2012.

Despite some improved indicators in the past few months, Ritholtz says the trend will “probably not” continue into 2012. Ritholtz professes his appreciation of the work of ECRI, the Economic Cycle Research Institute, which has become notorious for its eerily prescient forecasts in the face of contrary conventional wisdom. ECRI came out with a recession call in September, when numbers were less promising, Ritholtz says, and has not backed off even as indicators improved.

ECRI is cited for its 2010 insistence that the economy was not headed for a double-dip recession, even as Wall Street seemed sure it was; ECRI proved right. “If I had to pick Wall Street in general versus ECRI,  hands-down it’s ECRI,” Ritholtz says.

With earnings on the S&P at cyclical highs, stocks currently may appear to be fairly priced, Ritholtz says. “However, if ECRI is right, and we do tip into even a minor recession, a 15-20-30% drop in earnings is not out of the question, and then … it’s absolutely not priced in….

“This is really binary,” he continues. “Either we go into a recession, or we go into a muddle-through period.” A third option, in which the economy takes off, is highly improbable.