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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Roads End who wrote (74274)11/17/2006 11:42:53 AM
From: CalculatedRisk  Read Replies (1) of 110194
 
Yeah, I calculated (based on recent overbuilding) that Starts will probably fall to 1.1 million at some point ... maybe next year, maybe in '08. So that is close to your 1.2 million number.

Here is what Federal Reserve Vice Chairman Kohn said two months ago when starts were at 1.7 million SAAR:

"... any overbuilding in 2004 and 2005 was small enough to be worked off over coming quarters at close to the current level of housing starts."

OOOPS! But that is why the Fed (and the consensus) is for a soft landing. They viewed the housing boom as based mostly on fundamentals, not speculation.

Clearly people's view of the housing bust depends on their view of the housing boom. IMO, that is why the Fed has consistently been "surprised" by the housing bust - I believe they viewed the boom incorrectly.
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