And to gain insights into how to offset the risks facing affluent families, staff writer Elizabeth Harris interviewed dozens of economic, banking and investment industry leaders. Accompanying the roundtable discussion, we present their thoughts on specific perils, and ideas for mitigating them.

Worth: We are ending 2006 with mixed economic signals: Oil prices and housing prices are both declining, inflation remains a worry, but the Fed has stopped raising rates. The stock markets are up. What is in store for 2007? Let’s start with the view of the main risks.

Nouriel Roubini: The answer is simply that we’re going to have a recession in 2007. We are in the midst of the biggest housing slump in the last five decades. In some areas, new home sales have declined more than 30 percent since 2005. Residential investment is likely to fall as much as 15 percent in the second quarter.

People are concerned about inflation, but at this point, inflation might not be a problem; if anything, inflation will fall in a global slowdown. Knowing that, interest rates now may actually be too high.

Consumption will slow down as housing goes bust. Corporations are flush with liquidity and profits, but they are on an investment strike. Instead of investing, they are giving money back to shareholders through the biggest share buyback bonanza in history. This is a signal of pessimism, because no corporation would give its profits back to shareholders if it had strong investment or M&A prospects. With the housing bust causing demand to fall, companies are cutting production and investment instead of coming to the rescue of the economy.

James Glassman: I think the one area Nouriel and I agree on is that inflation is not a problem. Inflation is an oil story, a relative price story, rather than a real threat. I think people have misread this, including the Fed. It started a normalization campaign perhaps sooner than it should have. So the job recovery was a little more muted.

Housing is going through a big adjustment. The problem with housing is that prices got out of line. When housing becomes unaffordable, people don’t keep buying. We all live in neighborhoods where there are houses that have been on the market for a long time. But they are starting to move now because people are willing to accept a lower price—that’s what fixes the problem. This is not a big deal.