Which way for the US economy? As reported in the Knowledge@WP Carey series, Dr. Ken Mayland, president of Ohio-based ClearView Economics maintains that the supposed threats to the US economy are over-stated. He argues that that worst of the housing crisis is over and that despite the subprime mortgage meltdown, consumer loan delinquency has remained largely under control and that overall loan delinquency is not as high as it was, for example, during the second half of the 1990s.

That said, there is still a oversupply of gloomy data around, culminating in the Organization for Economic Cooperation and Development warning that overall losses in the subprime market could hit $300 billion. America's housing market crisis and the debt squeeze it has produced is slowing US growth to the point where the Federal Reserve this week predicted that growth would slow to a range of 1.8% to 2.5% next year, down from growth around 2.45% in 2007.

The question traders in markets around the world are asking now is whether the Fed was being optimistic.