Most bears don’t go that deeply into the underlying fundamentals when they talk about these problems. They don’t have to. Just the stuff that’s laying around on the surface is scary enough. When we dig a little deeper the potential downsides are so big they dwarf the consequences we speak of using the more “conservative” lines of analysis.
In other words, we usually understate the downsides so as to not look foolish, because digging a little deeper leads to numbers that basically defy comprehension.
In 2001, nobody could have grasped what 2005 prices would eventually look like – those increases were beyond what anyone would have believed because it was without precedent. We can’t know for sure at this point, but there is the possibility that the same “can’t believe it” could happen in reverse.