Are we heading for a double-dip recession?
Karl Case, co-founder of the famed Case-Shiller housing index, thinks his earlier optimism about the economic recovery was misplaced. He now believes “the probability is very high of a serious double dip like 1982.”
Making that more likely is that much of the government scaffolding supporting the economy is about to get taken away: Fannie Mae, Freddie Mac, and the Federal Housing Administration are all set to tighten lending policies. The stimulus is set to drain out of the economy over the next year. The Federal Reserve evinces little interest in steeping into the breach and Congress is too bitterly polarized -- and too inanely concerned about the deficit -- for major action. It's worrying.
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