What's up with the bright minds at Harvard? They can't seem to get their acts together...

On top of their president, Larry Summers, stepping down from his post amid sighs of relief from most of the staff, we have two conflicting forecasts of the U.S. economy coming out of America's oldest university.

Tuesday, Harvard's Joint Center for Housing Studies released a report saying that although the housing market has entered a "down cycle," the party is nowhere near over.

"There may be tough times ahead," says Nicholas Retsinas, director of the Joint Center for Housing Studies at Harvard, "but housing will emerge stronger than ever."

The report acknowledges that nearly one-third of U.S. homebuyers chose "risky" interest-only mortgages last year, and that the average mortgage payment in 2005 rose to 24% of the U.S. median income (after taxes) - the highest level seen since 1984. But those Ivy League brainiacs decided to shrug those facts off and declare the U.S. economy "sound," and that any softening in the housing markets should clear up before long.

Phew. We feel so much better now that they've cleared that up...wait - what's this? The latest NY Times Magazine is entirely dedicated to "America's Scariest Addiction: Debt," and in the issue is a very interesting article by Harvard's Professor of History, Niall Ferguson.

Prof. Ferguson's piece, "Reasons to Worry" looks to explain "Why you should be excused for feeling a little uneasy about the collapse in household savings, the rise in home-mortgage debt, a large and growing trade deficit and the fact that Asian countries hold so many U.S. Treasuries."

"For America's giant, dinosaurlike economy," he writes in the article's conclusion, "with its small wealthy head; its big, fat middle; and its long low-income tail - there is a tried-and-tested response to a change in the weather. Dollar depreciation and inflation have saved the debtlodocus before. The assumption seems to be they will do the trick again.

"Yet this time may be different. For sinking like a velociraptor's fangs into the tail of the debtlodocus are interest-rate hikes that may outpace and check any increase in inflation. And no one knows when and how violently the leviathan may react to this slowly discernible pain.

"It is too soon to speak of extinction, of course. But one obvious inference to be drawn from the British experience of an indebted empire and a sliding currency...is that eternal life is not on offer."

Ooh la la...doesn't really sound as if Prof. Ferguson is describing the same "sound" economy as his friends over at the Housing Studies center.

But what would we know? After all, as the Harvard Political Review so graciously pointed out in their review of Empire of Debt, we are "overly simplistic" untrained economists.

Bill Bonner is the President of Agora Publishing.  For more on Bill Bonner, visit The Daily Reckoning.