So will you by reading his extremely thoughtful analysis. First, his soft-landing scenario:
When all is said and done, what does this soft landing scenario imply? 1) A couple of years of somewhat high interest rates in the US. 2) A few years of modest economic growth in the US, but no outright recession. 3) A gradual depreciation of the dollar, much as the dollar has experienced on average over the past 35 years. 4) A slow but steady improvement in the US’s CA deficit as a % of GDP, as US import growth slows. 5) Net foreign debt that rises to 40-45% of GDP by 2008 or 2009 (from close to 30% today), but then more or less levels off. 6) Continued economic growth in the Asian economies.
And here is his definition of a hard landing:
So what do I envision as the end results of this hard landing scenario? 1) Interest rates in the US will move sharply higher over a period of days or weeks. Stock markets decline substantially as a result. 2) The dollar will depreciate by a substantial amount against the major Asian currencies. 3) Inflation in the US will jump upward very quickly, though perhaps only temporarily. 4) Household wealth in the US will fall significantly, due to the falling stock market and the bursting of the house price bubble. 5) The US economy will experience a rather sharp contraction, which I imagine to be deeper than either of the past two recessions... perhaps similar to the 1974-75 recession triggered by the first oil shock. 6) As households quickly retrench and reduce consumption, US imports fall, causing a fairly rapid fall in the US CA deficit over the course of a year or two. 7) Most of the Asian economies will also experience recession, with particular economic dislocation in their export industries.
These passages don't do complete justice to his posts. Be sure to go over to Angry Bear and read both in their entirety.
UPDATE: While you are over at Angry Bear, check out this post from pgl too.