Can anyone remember the malaise every one felt during and after the Vietnam War? Aside the military spending that was a drain on the prosperous 1960’s, the psychological defeat of the war affected a whole generation.
When Iraq goes to shit (which I think it will), people won’t be very much in any mood to consume or buy houses. That’ll be especially true if housing crashes at the same time.
If you look back at the past few years, you can see that the real estate market tracked exactly the situation Iraq. When Bush declared “mission accomplished” the sky was the limit for American power and real estate prices. Now the situation in Iraq and housing are in supposed “soft landing.” Anyone in the know would say that the situation has taken a turn for the worse (despite the lagging indicators that still point otherwise).
Buying an overpriced house in the last few years was a big mistake just like invading Iraq was. It’s either bail out now to save what’s left or be prepared to stay “invested” for the long haul. Anyone ready for 10 more years?
People who “invested” in overpriced housing will have to take responsibility for their bad decisions. The unfortunate part of Iraq is that we’ll all pay for one misguided leader’s decision.
