Anatole Kaletsky of the Times of London heralds a recession in predictions of a recession in the US economy.

[Warren] Buffett, having speculated against the dollar for years and declared that credit derivatives are financial weapons of mass destruction, has finally begun to find attractive opportunities to invest his money and told his shareholders last week that the worst of the credit crisis was probably over. Mr Soros, in his forthcoming book, The New Paradigm for Financial Markets, states unequivocally: "We are in the midst of a financial crisis the likes of which has not been seen since the Great Depression." But after making $3 billion for Quantum Endowment Fund by anticipating last year's bear markets, he is now hedging his bets, as is only to be expected from the world's most successful hedge fund manager. "I may well be proven wrong," he told The New York Times last week, adding that he might yet again turn out to be "the boy who cried wolf".

An alternative view more consistent with economic theory and historic experience was suggested by the Bank of England's Stability Report last week: "Credit markets are likely to overstate significantly the losses that will ultimately be felt by the financial system and the economy as a whole . . . They will exaggerate to an even greater extent the potential damage to the real economy." [....]

Indeed, the Bank's calculations suggest that present pricing of mortgage-related bonds in financial markets has probably overstated the future losses on US sub-prime lending by about double.