matt c.

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    • Thu Dec 6th 00:15 AM | Rating: 0 0
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      Predicting Recessions: Identifying Reliable Sources
      this is an interesting article, but, over the past couple of years, i think it's safe to say that the bears have been right a lot more often than the bulls have when it comes to the housing market and the economy.

      as i see it, the debate about the housing market affecting the overall economy has gone something like this from BULLISH perspective:

      1. "there is no housing 'bubble,' just a boom that's slowing down and will reaccelerate in the coming months."
      2. "ok, there was a bubble in some select markets, but we don't see it affecting the US housing market as a whole."
      3. "the US housing market was probably in a bubble."
      4. "there aren't significant problems with subprime mortgages."
      5. "there are problems in the subprime market, but they won't spill over into the market for prime mortgages."
      6. "the subprime problems have spilled over into the market for prime mortgages, but we don't see this causing problems in the broader credit market or causing a general credit problem.'
      7. "ok, we've had a credit crunch, but we don't see this causing a recession."

      they've been wrong on steps 1-6. it is crazy to believe that they'll be wrong on step #7? i don't think it is. i'm not saying that a recession is guaranteed by any means, but, on balance, the bears, even the permabears, have been right more often than the bulls about the housing market.
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