The odds of economic meltdown | Salon.com

Three factors:

The Fed finds itself with less inflation-fighting credibility than it though it had.

Upward pressure on inflation from rising energy prices and, perhaps, import prices.

Millions of middle-class homeowners who, for too long, have treated their houses like giant ATM machines.

The odds of economic meltdown Salon.com:

Aug. 3, 2006 Forecasting recessions is a fool's game. If there is enough solid economic information to make it appear highly likely that a recession is coming -- that production, employment and consumer demand will actually fall -- then it is highly likely that there already is a recession. Businesses are not stupid, and they don't have to wait for economists to tell them what they already know. By the time a gloomy forecast has been issued they've probably already noticed a drop in consumer demand and responded by firing workers and reducing production.

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.