andrewh10

Should We Force a Housing Bottom?

Isn’t it frustrating listening to all the whining by homeowners that prices have declined a little? I sure am sick of it, anyone who thought that housing was an asset class which never declined had a bad case of wishful thinking. It will take time for the US housing market to bottom these things do not happen overnight since prices appreciated so much over a short period of time. Most real estate analysts agree that the general the US retail housing market has about 10-30% further to drop indicating some kind of bottom in the latter stage of 2008 or early 2009. However, if certain areas are not correcting it could delay the whole process to 2010 and beyond depending on how the slowdown/recession plays out. The housing bubble was caused by low interest rates and massive leverage which was the result of Mr. Greenspan so called legacy interest rate policy. Ben Bernanke, another self proclaimed genius is aiding another bubble in commodities by lowering the heck out of interest rates again. The FED has sold out to politics many years ago and it’s a shame how they are bailing out the banking sector. The FED is the perpetrator of all these modern day financial bubbles. We need to let the financial markets rule themselves by deciding which firms should go bust.