On-topic here and I’m actually keeping it fairly civil. This notion that massive amounts of wealth can be created and destroyed simply through changes in perceptions is central to the concept of economic bubbles, the current housing bubble, this website, these forums, etc. Wealth was created during the housing run-up, now it is being destroyed.

Countrywide is currently running an ad campaign that illustrates this perfectly. I was in Oakland the other day and saw one of their mini-billboards in the lobby of a downtown office building. I’m paraphrasing here, but it goes along the lines of “In times of great change, wealth doesn’t simply disappear. It changes hands. The key is to understand where the transfers are occurring and to be a part of it.”

Think CW has an interest in shaping perceptions?

You bet. The perma-bulls and bubble players would have us believe that changes in perceptions about housing value and unsustainable expectations related to residential property appreciation have resulted in real gains in wealth this past decade. To be sure, some of these gains were real. But we’re now entering into a phase where much of these gains will be erased as perceptions adjust to reality.

And true, there are some, particularly on Wall Street, who will ‘make a killing’ on the ride down. But the impacts of this phase are going to be overwhelmingly negative on balance, for Main Street as well as Wall Street. I think it’s going to be a very challenging time.

Am I critical? Hell yes! I’m a business owner who values economic stability and sound fiscal and monetary policy. The last ten years have been shamefully irresponsible. It’s a disgusting mess we’re inheriting. No amount of ‘shorting’ the property market can mask this larger truth.