credit bubble dispute reminds me of drug rehab lectures
the more a family argues over whether Uncle Sammy is really an alcoholic, the more likely he is just that
AN ALCOHOLIC
the more the markets dispute and argue over whether the Trez bond market, the Agency bond market, the Housing sector, are a bubble or not, the more like they are just that
BOND BUBBLES
the truth lies in the denials, and the center stage of the discussion
if they were not bubbles, we would not be talking about them
it is really that simple
where is the logic in a 30% residential rise in value when we are seeing widespread asset fractures, job losses, stock losses, pension decimation, etc?
in past recessions, housing took its medicine, with 20-30% pullbacks in prices
this time, with Secy Inflation GreenScheiss, we saw the opposite
which tells me, in the next few years, we will see a whopping 40-50% correction in realty prices
heck, Sir John Templeton expects a 90% correction
the curveball is that housing is improperly seen as a hard asset
its value is primarily determined by mortgage finance funding and its availability
take away the mortgage funds, and watch this hard asset behave like what it is... a bond derivative
I call real estate "the hard asset impostor" led by MBS rallies and a flight from paper assets
trouble is, the flight went straight into more paper assets, mortgages
damn, I better be careful
dont wanna sound "unintelligent"
somebody pass the toilet paper
/ jim |
