mmouillar

Housing: US vs. Japan

Sir,
I find it very telling that we can clearly see an inflexion point on the end of 2002 in the curve "Ratio of OFHEO house price index to personal consumption expenditures on rent".
This is the very moment when prices should have started to go down "in a normal real-estate price cycle", WOULD NOT THE FED HAVE DECREASED INTEREST RATES TO THE UNCHARTERED TERRITORY OF NEGATIVE (in real terms) VALUE.

This move of the FED triggered the rise of the biggest worldwide bubble of history (as explained by The Economist in its "In come the waves" article of Jun 16th 2005).

This bubble is now popping, and its overwhelming size dwarfs all possible intervention by central banks.

PIMCO: We're in the Middle of Housing Downturn

check out this telling video about the rise and pop of the fXXXX housing bubble www.youtube.com/watch?...