Greg Ip

Articles by The Economist’s U.S. Economics Editor

Archive for December 2006

Housing, Auto Slumps May Defy Usual Role as Recession Harbingers

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By Greg Ip and Christopher Conkey
1432 words
14 December 2006

The Wall Street Journal

(Copyright (c) 2006, Dow Jones & Company, Inc.)


WASHINGTON — New home construction is plummeting. Car sales are weakening. Investors have driven long-term interest rates well below the short-term rates set by the Federal Reserve. All these factors are present today, and all have been precursors of past recessions.

But the U.S. central bank and much of Wall Street are now betting that the old rules don’t apply, and that a recession next year, while possible, is unlikely.

“This time will be different,” Ed Leamer, who heads the forecasting center at the University of California at Los Angeles’s Anderson School of Management, predicts in a report. “This time the problems in housing will stay in housing.” It’s a prediction, he admits, that “keeps us up at night.” Read the rest of this entry »


Written by gregip

December 14, 2006 at 8:00 pm