[quote=briansd1]The two quotes above seem to be self contradictory.
Your remark “and yet, prices collapse anyways” implies that you don’t give much credence to government intervention. Then you go on to say: “I say, the intervention will cause price to increase”.[/quote]
It’s not that I don’t think the government intervention work. It works, at what cost is a whole different debate. I just don’t think they can time the market. I.E. they dump the money at the problem, but it didn’t stop the crash. On the other side, by the time they decide to take away the intervention, it’s already too late and another bubble will form. I’m questioning their ability to time things, not the ability of inflating bubbles.
[quote=briansd1]My observations are regarding prices today. I say that government support has stabilized prices; but underwater homeowners will not start to “willingly” move until they are “made whole.” We are not yet at a point where mobility is encouraged by increasing prices.[/quote]
[quote=briansd1]As I said before, we will not see it reflected in nominal prices (because of inflation and government intervention) but after 10 years, real, inflation adjusted, prices will reflect reversion to the mean. [/quote]
Aren’t you contradicting yourself here? If I read it correctly, you say we’ll see an increase in nominal prices due to inflation and government intervention. Then wouldn’t the home owners will be “made whole” nominally, which mean the government intervention was intended to get people to move, not to say? BTW, I was specifically debating your last quote I just pasted. Home owner don’t care about real prices. They care about nominal prices.
