Just wanted to make a comment on “rate of decline.” I’m assuming the “rate” esmith is referring to is the -3% from peak per month rate. One fundamental reason this measure of rate can’t hold up is it translates to an ever-rising monthly % decline. For example, the peak CS # was 250. In order to retract 3% from total each month it must fall by 7.5 each month. Falling from 209, then 202, then 194 fits this perfectly. However, on a monthly basis, falling from 209 to 201.5 is a 3.6% fall. from 201.5 to 194 is a 3.7% fall. Continue this on to say, falling from 15 to 7.5, while being another 3% decline in peak terms, the monthly fall is not 3.6% or 3.7%, but 50%.
I would maintain that the decline will decrease in absolute terms (from falling 7.5 or 3% each time) but could maintain a fairly steady monthly decline (if very bearish say 2% per month). This is much more realistic, and instead of meaning the value will hit 0 in 2010, it would hit about 100 at the end of 2010, representing a 50% fall. Of course, I’m not THAT bearish, I just wanted to distinguish between an absolute rate of decline and a monthly rate.
