Why the housing induced recession may be quick

[Bugs]

I suppose the national economy could move at a different pace than the local RE markets. But as far as the local RE markets are concerned I don’t think a quick turn around is in the cards.

Pricing is a function of supply vs. demand. Before pricing can stablize we need to clear out our excess inventory, not continue to add to it as we surely will over the next 18 months.

I think the idea that the internet age is going to shorten up our economic cycles is more correctly categorized as a “should be” rather and an “is”. It is based on the premise that if enough buyers are adequately informed they’ll act rationally. Unfortunately, we’ve seen the market participants continuing to act even more irrationally than ever before, information availability notwithstanding.

Ideally, a well informed market acting in a completely rational manner would never disconnect from the underlying fundamentals to begin with. Thus, no peaks or valleys, just a stable and efficient market. I think it’s safe to say we’re a long ways from that at present.

[Omega Point]

I have pondered this as well. I generally believe that recessions will happen less frequently and will be less severe. However I don’t believe it is due to the Fed and other CBs injecting money. I think it’s because the U.S. economy is much more diversified today than 20…30…50…100 years ago. It is less likely that a slump in one industry will bring down the whole economy like it would have in the past. What’s more, globalization has added to the economic diversity.

Still, I believe we haven’t seen the worst of the impact on the economy from the housing slump. I’m hoping prices in San Diego drop 50%. This is likely to bring a recession but no where near as painful as the ones in the 70s or early 80s.

[Omega Point]

I have pondered this as well. I generally believe that recessions will happen less frequently and will be less severe. However I don’t believe it is due to the Fed and other CBs injecting money. I think it’s because the U.S. economy is much more diversified today than 20…30…50…100 years ago. It is less likely that a slump in one industry will bring down the whole economy like it would have in the past. What’s more, globalization has added to the economic diversity.

Still, I believe we haven’t seen the worst of the impact on the economy from the housing slump. I’m hoping prices in San Diego drop 50%. This is likely to bring a recession but no where near as painful as the ones in the 70s or early 80s.

[Omega Point]

I have pondered this as well. I generally believe that recessions will happen less frequently and will be less severe. However I don’t believe it is due to the Fed and other CBs injecting money. I think it’s because the U.S. economy is much more diversified today than 20…30…50…100 years ago. It is less likely that a slump in one industry will bring down the whole economy like it would have in the past. What’s more, globalization has added to the economic diversity.

Still, I believe we haven’t seen the worst of the impact on the economy from the housing slump. I’m hoping prices in San Diego drop 50%. This is likely to bring a recession but no where near as painful as the ones in the 70s or early 80s.

[drunkle]

it seems unlikely only for the fact (or appearance of fact) that those “in control”, such as the fed, fund managers and the like, don’t yet know of the internet’s existance nor of the information contained therein.

the minority of us normal folks who both know of and use the internet, well, we can adjust. but our adjustments go contrary to the “needs” of the market; continued excessive consumption.

[drunkle]

it seems unlikely only for the fact (or appearance of fact) that those “in control”, such as the fed, fund managers and the like, don’t yet know of the internet’s existance nor of the information contained therein.

the minority of us normal folks who both know of and use the internet, well, we can adjust. but our adjustments go contrary to the “needs” of the market; continued excessive consumption.

[drunkle]

it seems unlikely only for the fact (or appearance of fact) that those “in control”, such as the fed, fund managers and the like, don’t yet know of the internet’s existance nor of the information contained therein.

the minority of us normal folks who both know of and use the internet, well, we can adjust. but our adjustments go contrary to the “needs” of the market; continued excessive consumption.

[KIBU]

I see that the housing market down slope could be steep and what happened last week suggests we may have a better chance riding down the slope pretty quick.

The ride up is totally different. I can’t see a quick ride up at all. Where are the money going to come from??? We have a large number of investors who will learn the hard lession not to blindly trust the ratings, the banks, the lenders when it come to real estates investings. We will have more lenders who will go out of the business or the type of irresponsible business they once did. We will have plenty of consumers deep in debt, bankruptcy, and a hard lesion learned for their life….

I can’t see an easy,quick fix for this economy’s problem for a long time.

[KIBU]

I see that the housing market down slope could be steep and what happened last week suggests we may have a better chance riding down the slope pretty quick.

The ride up is totally different. I can’t see a quick ride up at all. Where are the money going to come from??? We have a large number of investors who will learn the hard lession not to blindly trust the ratings, the banks, the lenders when it come to real estates investings. We will have more lenders who will go out of the business or the type of irresponsible business they once did. We will have plenty of consumers deep in debt, bankruptcy, and a hard lesion learned for their life….

I can’t see an easy,quick fix for this economy’s problem for a long time.

[KIBU]

I see that the housing market down slope could be steep and what happened last week suggests we may have a better chance riding down the slope pretty quick.

The ride up is totally different. I can’t see a quick ride up at all. Where are the money going to come from??? We have a large number of investors who will learn the hard lession not to blindly trust the ratings, the banks, the lenders when it come to real estates investings. We will have more lenders who will go out of the business or the type of irresponsible business they once did. We will have plenty of consumers deep in debt, bankruptcy, and a hard lesion learned for their life….

I can’t see an easy,quick fix for this economy’s problem for a long time.

[waterboy]

This might be a little off point, but if we look outside of subprime isn’t it only the states of CA, AZ, NV, FL, & DC that are extremely out of line when it comes to real estate.

[waterboy]

This might be a little off point, but if we look outside of subprime isn’t it only the states of CA, AZ, NV, FL, & DC that are extremely out of line when it comes to real estate.

[waterboy]

This might be a little off point, but if we look outside of subprime isn’t it only the states of CA, AZ, NV, FL, & DC that are extremely out of line when it comes to real estate.

[drunkle]

california alone is worth 17% of the entire US gdp. think about that.

[drunkle]

california alone is worth 17% of the entire US gdp. think about that.

[Author]

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