Daily Telegraph: Black day on both sides of Atlantic

...Janet Yellen, head of the San Francisco Federal Reserve and a leading property expert, warned on Monday that the housing bust was creating "ghost towns" in the worst-hit regions. Mrs Yellen said over 80pc of all homes in pockets of Phoenix and Las Vegas were up for sale. "The market has seized up to some extent. It may not recover for several years," she said.

Stephen Roach, Morgan Stanley's chief economist, said the property crash would override the effects of a $120bn shot-in-the-arm for US households from lower energy costs. "There is a much greater chance that global growth will surprise on the downside in 2007 rather than on the upside," he said.

The Federal Reserve appears split between monetary hawks and doves, unable to agree whether the greater risk is incipient inflation or a sharp downturn caused by over-tightening. Mrs Yellen said the full effect of 17 rate rises since June 2004 was in the "pipeline".