![]() ![]() "Although we didn't get carried away with ridiculous subprime this time, the multiple of family income actually went higher than it did in 2007. The motto should be, 'Don't mess with housing.' The super motto should be, 'Never have a housing bubble at the same time as you have a stock-market bubble.'"ĩ. It's really an important part of the median family's income picture and capital picture. They're worse for the economy than stocks because they're substantially more broadly owned. "House prices are worse for the ordinary household. And now the rates have gone up, of course it will drive down."Ĩ. "An over 40-year period of driving down mortgage rates, of course you drove up house prices all over the world, pretty much. They're vulnerable on the debt front, vulnerable on the financial front, and vulnerable on a broad economic front."ħ. It has a very high density of zombies - companies that really can only pay their interest payments by issuing more debt. It often has no collective earnings at all. "The most vulnerable area in my opinion is the Russell 2000. I don't know whether it will be fairly mild or fairly serious, but it will probably go deep into next year."Ħ. It's always a surprise, but you always have a surprise, so the idea of a surprise is totally unsurprising."ĥ. That is the pattern - something breaks and nobody seems to know what it is. "You increase the pressure on a very complicated system until a few things snap. And the nice bear market will be hopefully less than a 50% decline, but it won't be a huge amount less than 50% from the peak in real terms."Ĥ. ![]() "The simple arithmetic suggests you'll either have a dismal return forever, or you'll have a nice bear market and then a normal return. ![]()
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