Weblog and wEssays by Charles Hugh Smith
Sounds like an excellent description of the real estate market. The market might well end up tracing far fewer than 39 such stairsteps down to its ultimate low in 2011 or 2012, but in the spirit of innocents plunged into financially deadly troubles and smooth sharpies playing hidden hands to the detriment of said innocents, here is an informal chart of the steps the housing market has already begun descending:BELOW: Notice how prior housing cycles are super-imposed on this ten year timeline
This article includes excerpts from Barron's October 10, 2006.
..Charles Hugh Smith:
" Fortress of Denial Consider, if you will, the general optimism (dare we say euphoria?) of homeowners in these poll numbers from the current issue of Barron's. The operant phrase here is "state of denial," but this doesn't quite capture the robust, indeed, fortified nature of homeowner denial. I humbly suggest the more accurate term would be a Fortress of Denial--impervious to attack by reason, statistics or indeed any fact-based battering ram....
And unsurprisingly, we already hear voices calling "the bottom" in housing stocks: Whistling Past Housing's Graveyard? (Wall Street Journal) This will go down, I believe, as the analog of the market analysts' serene calls that Nasdaq "had bottomed" at 4,000 in fall of 2000--two years and 2,900 points too early. Let's look at some charts which suggest the bottom is nowhere in sight in the housing market..."
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