Why do you say no more than 30% for inflation? That is an extremely modest 3-4% per year, and the arguably grossly understated CPI was running 6% for much of the bubble. (Shadowstats put it closer to 14%.) But besides that, the bottom has nothing to do with matching reasonable prices. Usually the bottom overshoots the mean just because there is as much bearish momentum on the way down (and bad leverage wiping people out) as there was bullish momentum overshooting the mean on the way up.
I think the mainstream news will be about as accurate at predicting a bottom as they were at predicting a top. Seeing as they didn’t predict a top, we all know what their track record is. Anyone calling bottom now is being silly with foreclosures still on the rise and a slew of Alt-A resets coming over this year and next. Then, next year starts what I call the “retirement boom”. If 1945 was the start of the “baby boom”, 2010 is 65 years later, so look for even more asset liquidation. Also, any arguments concerning price to income while unemployment is soaring (therefore aggregate income is dropping) is also silly. msn money is good for a laugh, but little else…
