The consumer is faced with the greatest risk of recession since 1991. Many forecasters have gone to their graves predicting the demise of the consumer. However, housing is a large portion of our collective balance sheets and is poised to deflate in real terms for just the sixth time since WW II. Each time in the past, we have entered into a recession.

From GMO, an institutional money management firm in Boston headed by Jeremy Grantham.

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