Before we get going with any kind of dialogue, you should reread my previous posts and the conclusions you are drawing from them.
1. Nowhere do I state that the unwinding of the RE bubble will not cause a recession. I stated clearly that the unwinding would cause residual damage to the overall economy.
2. While I believe the bubble is confined to selected markets, nowhere did I aver that the fallout would be limited geographically. Again, I thought I made it clear there would be damage to the overall economy.
3. I also clearly did not state or imply that the S&L crisis or telecom/tech crash did not lead to recession. The tech crash clearly did cause a mild recession while the S&L crisis was a factor in the recession of the early 90’s.
From my perspective, our differences regarding the fallout from the popping of the RE bubble are a matter of degree. I believe it will be very ugly and painful for many. The probability of a recession will increase as lenders and overleveraged consumers repair their balance sheets.
If I’m reading you correctly, you’re expecting a lot worse than that. I just can’t bring myself to be that pessimistic.
