I just read your papers after I returned from dinner… with someone from one of the key agencies, as it happens. I think there’s really substantive relief being readied as needed. Aggregate loan losses will probably be effectively limited. This will keep mortgage investors from cutting off new funds too severely. Looks like the great housing put lives on, and I’m beginning to think prices will rise after a pretty modest dip (of 20-30%?).
This is depressing. Why does anyone save and actually pay with their own money for things like houses? Oh, I forgot, the Chinese and Japanese do save enough to eventually actually pay for things with their own money. If they ever learn this game…
At this point, I think the only hope for a decrease of 50% or so (still way above real prices just 10 years ago) is an external global shock or a total screw-up by the regulators, and realistically those are long shots.
