Ray Hendon

Seeking Signs of Recovery

Minlita: I agree with your analysis, that many of the signs are not encouraging. But, I do see some signs that the worst of the real estate price collapse is leveling off, and that many of the hardest hit homes are now being bought by first time buyers and speculators.

But, I don't think the recovery depends on housing prices. A stable real estate market will help, but, in my view, it is not the essential ingredient in a move to recover. We can live with lower house prices if they can be sold and supported by legitimate mortgages. Earlier buyers will take it on the chin, but that is the nature of investing of any time. Sometimes it doesn't pay off.

Also, there are many emerging market economies that are already in a slight recovery. There some basket cases are in Eastern Europe, but the IMF plan for currency intervention has already earmarked huge sums for that region. It would help if Germany would step up and offer some help, since they are the major trading partner of most of Eastern Europe. But, the IMF and
World Bank can bring off a recovery with the help of the other G20 members.

Thanks for you well informed comments.

Best wishes,

Ray