UC Berkly News - "The odds of economic meltdown" (8-7-06)

"With interest rates and oil prices rising and consumers spending beyond their means, we may be headed for recession – and worse"

"So: Never say that a recession is coming. Say only that a recession is here, or that there might be a recession on the way. Which, in fact, is what I'm saying today. As of the beginning of August 2006, a recession is not here, and I'm not going to violate my own rule by saying one is coming. But there is a good chance — for the first time since 2003 — that there might be a recession in progress six months from now."

"Why? Three factors: 1) A Federal Reserve that finds itself with less inflation-fighting credibility than it thought it had; 2) upward pressure on inflation from rising energy and, perhaps, import prices; and 3) millions of middle-class homeowners who for too long have treated their houses as gigantic ATMs, using home equity loans and refinancing to generate extra spending money."