Market psychology is an interesting thing. It’s one reason why the bubble transcends national boundaries. I think that if SD and other metro areas in the US suffer the big correction, that correction will extend to every other distorted market in the U.S., and may even touch some of the heretofore stable markets. I also think that if the trend for correction overwhelms the U.S., it will also affect all the other bubble markets. It may be that London did the dead-cat bounce because on a global basis there isn’t enough panic yet.
