Excellent interviews. Thanks bub for this unique link. I gained a whole new respect for Robert Campbell. This guy is sharp, and he is so convincing about the 5 problems for the US housing market: real estate dependent jobs, voodoo loans, negative savings, and upcoming recession. He lists 3 reasons for recession: inverted yield curve, -2% growth in new autos, and declining housing market leading to lower consumer spending.

Campbell said that exotic loans are neutron mortgages: “the houses will be left standing, but the people will be gone”. All the people he has talked to have said that people just cannot afford the higher payments due to resets, so if they haven’t refinanced out of their ARM, they are losing their homes. Contractors are calling customers asking for work and lowering their bids. Can you believe it?

Robert Shiller made an interesting comment that in Sydney, Australia and in England, the bubble started to pop as their bank raised interest rates, but then suddenly the trend reversed and prices continued going up. He also mentioned Japan’s long deflation in housing, and wondered if this can happen here.