Inflation or Housing? Fed Rate Cut Debate

Al Goldman is an optimist -- and he disagrees with Goldman Sachs, Merrill Lynch and UBS, the three investment banks that criticized Ben Bernanke's inflation emphasis and called the housing slump the main threat to prosperity. Goldman, chief market strategist at A.G. Edwards, argued the contrarian point with Merrill Lynch Chief Economist David Rosenberg, on "Closing Bell."

"We've been making money the last six weeks," Goldman told CNBC's Maria Bartiromo. "We need a timeout." He believes the Fed will cut rates by "late summer, early fall."

"I suggest people be ready to do some buying over the next one or two weeks," he said. He recommended "long-term companies ready to grow their earnings" in the finance, biotech, pharma and tech sectors.

But Rosenberg reiterated Merrill Lynch's caveat, explaining that over the past five years, the housing boom "directly and indirectly" accounted for 40% of GDP growth and 60% of unemployment growth. He said that when housing growth "unwound," it produced the "2% economy of today" -- down from 3% growth in 2006 and 4% in 2005. When will the housing downturn begin to reverse? Rosenberg says "we're somewhere in the second or third inning" -- and warns that "we can easily see" home prices down 10% between now and 2008.