[extropy-chat] Housing bubble looking good

[Russell Wallace]

On 3/9/06, Chris Hibbert <hibbert at mydruthers.com> wrote:
>
> I don't know what Hal's reasons were, but the reason it looks good in
> general for the economy, is as an alternative to the widespread view of
> the bubble proponents.  The usual intended meaning of the claim that
> "it's a bubble" is that there's a crash coming.  A crash would be very
> bad for the economy, so indications that the boom will merely slow or
> will continue are good news in pointing to non-crash scenarios.
>

Well, a fall in house prices would in and of itself be good. What's bad is
the situation where an economic recession leaves many homeowners unable to
pay their inflated mortgages, combined with a fall in prices leading to
negative equity, so there's mass defaulting on debt and people ending up in
the street.

But the more inflated house prices become (relative to per capita GNP), the
more likely that scenario is to happen, and the more severe it will be when
it does happen; so it still doesn't strike me as good news.
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