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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: orkrious who wrote (27287)2/26/2005 10:12:02 AM
From: Wyätt Gwyön  Read Replies (1) | Respond to of 110194
 
Grantham did a historical study of something like 40 asset bubbles and found that they always give back ALL the gains. the money question, of course, is from what point.

another possibility, in a heavily rigged market like real estate where the bubble is actively supported by the government, is that they may move the goal posts, so that the nominal gains remain, even if they are backed out in real terms (i.e., dollar implosion swallows the real value of home price gains hook, line and sinker).



To: orkrious who wrote (27287)2/26/2005 10:12:38 AM
From: Crimson Ghost  Read Replies (2) | Respond to of 110194
 
Note I said half the gains since the year 2000. Prices in many bubble markets have doubled since 2000, so that would require a drop of about 25% from current levels.

My fear though is that the bubble will expand further before busting. Then we could see drops of 40% or more in some of the most bubbly markets IMHO.


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