Paul Krugman's Talk to the Google About the Economy, Recession, Housing, Etc.

About a week ago Paul Krugman (famous economist) gave a talk to Google employees about the state of economy. The talk, which can be seen on You Tube, is very a very good summary of how we got to where we are, some of the problems we face going forward, the future of the housing market, bank liquidity vs. solvency, etc. The video of the talk is just over an hour and 10 minutes long, but is worth a listen if you have the time. By the way, be patient when opening the link, it takes a while to load.

Just a few highlights that stick in my mind:

1. Banks have an solvency issue not a liquidity issue
2. Krugman expects the housing market to continue to decline
3. There is a 50% chance of recession in 2008 as measured by the NBER
4. The dollar will continue to decline
5. The current housing crisis is like the S&L crisis of the early 1990s
6. He fully expects to see "debt deflation" as the economy moves into 2008 and beyond