They have resulted in price drops. The problem, which I thought was already well documented here, is that the median price is a lagging indicator and useless in a market where the deterioation occurs from the bottom up. It’s called the plankton theory (move up buyers).
Regarding deflation, that is also what I’m looking for and credit contraction is a strong indication that this is happening. When the CDO market finally cracks, the underlying loans will be marked to market and there will be an impact to pricing.
The trolls posting on this thread, yes they are trolls, can continue to spew a bunch of micro economic nonsense, but I take solace in having a much larger perspective on this and let me tell it is going to be UGLY.
Helicopter Ben….don’t make me freaking laugh. He has one job in the end and that is to protect the dollar. For all of the “ben will inflate away my overpriced housing debt” let me clue you into something. The hyperinflation has already happened my friends. It was M3 credit which resulted in an asset price bubble(s). First in stocks and then in real estate. The only place we are headed is into deflation.
