Wednesday, February 28, 2007
Do you get the feeling that markets lately are like you-know-who to the left, that only when they finally look down and realize there's nothing solid below, the inevitable occurs?
Charles Hugh Smith had a remarkably-timed post Monday (2/26) titled, "This week's theme is 'I wonder'--as in, I wonder if the stock market is about to roll over into a sharp descent." Sure got that right!
Nouriel Roubini's latest "Is the Sub-Prime 'Garbage' 6% or Rather 50% of the Mortgage Market? And the Worst Housing Recession in Decades..." on the size of the impact from the ongoing story of the subprime lending meltdown.
It took everything pushing flat-out - low interest rates, very easy loan standards, speculative fever, booming economy, and momentum - to push house prices up this high. Then for the last year Westside prices have teetered, with well-priced houses selling quickly and the rest stuck in stalemate. Now the props are falling away.