I do not recall such a situation in the history. Within two days former Fed chairman and present Fed chairman present in public two opposing US economy perspectives. Alan Greenspan does not rule out recession by the end of the year, while Ben Bernanke says that stronger performance in the second half of 2007 is possible. What is even more unfortunate it all happens at times when global stock exchanges tumble, for the first time ever it is not the US equity market that sets the tone, but Shanghai and Shenzen markets tumbling almost 9 percent, and then recovering almost 4 percent. New York Times has an article describing Chinese investors attitude. I have read several research notes explaining that China sell-off was engineered by authorities and that further action should be expected if markets fail to cool off. This is in sharp contrast to authorities attitude towards perceived asset bubbles in some emerging markets in the past, where it was left to market forces to solve. Time will tell which approach produces better outcomes for citizens.
In Greenspan vs. Bernanke debate Econbrowser post by James Hamilton sides with the former chairman, presenting bearish evidence. Also Eurointelligence post by Wolfgang Munchau goes with Greenspan, citing three “reasons to panic”: US recession, severe financial crisis in the global credit markets and the weakness of German export-led growth model (take a look at Adam Posed editorial).