No surprise here -- now that he is no longer sitting in the big chair, Greenspan is
telling it the way it is...expect asset (e.g., house) price declines in a big way:
Former Federal Reserve Chairman Alan Greenspan warned on Wednesday a global glut in liquidity would result in a fall in asset prices.
He said the market value of assets worldwide had been rising faster than nominal gross domestic product globally due to a decline in real long-term interest rates over the years and a significant fall in real equity premiums.
"A good part of this expansion is a direct function of the decline in real equity premiums," Greenspan said. "That cannot go on indefinitely."
He said asset prices would begin to fall, but did not predict when that would happen.
"I am reasonably certain that what we are looking at today is an abnormal situation," he said.
But apparently Boobus Americanus doesn't pay any attention to the news as we are hearing more and more
stories about folks who still believe that they can get bubblicious prices for their POSs, are now having to reduce their asking prices after sitting on the market for months and months, and overheard muttering things to themselves like "
I wish I had priced it lower from the beginning". Well Boobus, you had better act fast before the resetting of
ARMageddon arrives.
No surprise here -- now that he is no longer sitting in the big chair, Greenspan is telling it the way it is...expect asset (e.g., house) price declines in a big way:
9 comments:
Can someone out there with access to MLS tell us what has happened to inventory/days on market in Marin over the past 12 months?
--Joel
So Greenspan is speaking clearer now? Hmm...I wonder why? Btw, lmao on the graphic.
In older age, I think Greenie will be heading back to his 1960's goldbug roots. He is fully aware of what he has done and where we are.
When I read the comments on Reuters a couple of days ago, my first thought was that he was trying to pop the commodities bubble. He won't be able to do it. But he might help to take the US RE market down.
In any case, you can bet that he is still part of the apparatus.
If you trust the source, you can get monthly DOM data at westbayre.com. I have compiled the average DOM over the past 12 months here:
3/05 46
4/05 50
5/05 41
6/05 41
7/05 44
8/05 50
9/05 56
10/05 48
11/05 65
12/05 67
1/06 91
2/06 87
Inventory in Marin is around 1.8 months, up from 1.2 months a year ago and far lower than elsewhere in the state (just read this the other day and now I cannot find my source)
fred,politicians are still cheap,especially local ones when you need a variance....you can find an expert witness to testify to anything for $250 per hour...and there is always two buck chuck at trader joe's if you want something that won't leave a foul taste.
" I sure wish Greenspan spoke english."
He does, that's why he is "Sir" Al.
Everyone knew he would do this. Ramp up the bubble, retire, and then say "Told 'ya so".
So predictable.
Has he really changed? He talked about 'froth' last year and even that was dismissed by the RE crowd. I don't really see any difference. "Sometime" could resemble Japan's 15 year decline or a more rapid drop.
I'm fearing this is bad for everybody.
Renters/owners/debtors...
Where do we go now?
I'm fearing this is bad for everybody.
No one will be spared I think. Other bubble areas are leading the way. Look at what is going on in San Diego. That market is often referred to as the "canary in the coal mine" as far as housing is concerned. I guess the Bay Area will follow in due course. The smart folks over at Patrick.net are predicting 'doom and gloom' in the BA will arrive in October or so. We'll see... It will be interesting to see if record unaffordability will be the norm or if it will return to historic levels. I hope so.
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