Saturday, May 27, 2006

The California Economy -- Housing Boom or Bubble?

This video says it all. Expect to spend 50 minutes. It's well worth the investment in time IMO.

[For better viewing quality, consider downloading the video and the Goggle Video software both of which are available at that site.]

4 Comments:

Blogger marin_explorer said...

This comment has been removed by a blog administrator.

May 28, 2006, 1:47:00 PM  
Blogger Once Bitten said...

Very good points, very informative and presented from an economist’s point of view (now I know how they think). Seems like Thornberg is leaning toward a soft landing, and here I disagree. One thing I don’t think he picks up on in his talk is the effect of even modest growth in mortgage defaults on an already declining housing market. With the loose lending much more prevalent than in the last downturn, I think the impact of prices declining slightly or even just stalling will trigger large declines. It does not take that many defaults to seriously imbalance a weak market.

His forecasting techniques seem very "steady-state" and I would say a modest increase in the rate of foreclosures throws the market into a state of unstable equilibrium, thus all bets are off. The only stock market parallel would be a margin account, but I think this is a weak comparison at best. In any case, we shall see...

BTW, did I hear a few over-leveraged developers choking on their apertifs?

May 28, 2006, 3:55:00 PM  
Blogger Athena said...

That was a great video. Very well done and I think even those who skipped economics 101 will understand it completely.

May 28, 2006, 6:59:00 PM  
Blogger Housing Boom Gone Bust said...

That video is definitely a splash of cold water to wake people up!

Sep 10, 2006, 3:29:00 PM  

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