Sure it could happen … and monkeys could fly out of my butt. The S&P 500 PE is only around 15 or 16. I realize that many people here think that the entire worldwide economy is built upon the Southern California housing bubble, but I just don’t see it. Not everyone is using their house as an ATM. Some of us still draw a salary that stems from helping to make useful products.
I think the Iraq war is more likely to lead to a recession than the popping of the housing bubble. I read somewhere that the total cost of that debacle was around $2.6 trillion already (including several hundred billion in direct costs and the costs of taking care of the permanently maimed). Luckily, the Democrats are in charge of Congress now and can provide President Bush with some much needed adult supervision. If our economy can survive the next two years with that idiot in charge, our economy can survive anything.
