Headline Risk

The WSJ Economics blog has an interesting post about Joe Carson, Alliance Bernstein's economist. He believes, as I do, that the US economy will not fall into recession. As evidence he cites some headlines:

Market Watch: Bracing For Mortgage Losses
Despite Late Rally, Dow Ends A Bad Week Lower
Shift To Capital Markets From Banks Brings Tumult
Crisis Goes Beyond The Balance Sheet
Banks Tighten Some Loan Terms
Commercial-Mortgage Issuers Are Locked In A Deep Freeze
Recession Fears Dominate
Market Turmoil Hits Luxury Home Sales
Heavy Spenders Take A Break
Decade of Moral Hazard
Emerging-Market Investors Get Full-Fledged Drubbing

The punchline is that the headlines are from September and October of 1998. In other words, we've been here before and a recession is not inevitable.