Speaking at the Federal Reserve’s Jackson Hole, Wyoming conclave in August, Yale University Professor Dr. Robert Shiller said that residential house prices might fall as much as 50% in some former real estate boom areas. As evidence, he cited how much home prices have escalated in comparison to rents. Personally, I think that 50% is an optimistic figure. Given the pendulum-like nature of macro market swings, I think that prices in some cities like Phoenix and San Diego may drop at much as 65% from their peak. And it may take five or six years before prices hit bottom. I predict that in two years, the newspapers will be filled with “tales of woe” human interest stories, with plenty of articles about home owners that are upside down in their mortgages, in default and walking away from their McMansions. They’ll leave it to the bankers to tidy up the mess.
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A hat tip to SJC for sending us this Financial Times article link: IMF head warns on impact of credit crisis
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Chris D. recommended this article at the Gold Anti-Trust Action Committee (GATA) site: Treasury claims power to seize gold and silver — and everything else
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The folks at Safecastle (one of our most loyal advertisers) mentioned in an e-mail that they have put some of their most popular items together onto a single Practical Holiday Gifts page. I’m sure that any of your preparedness-minded friends or relatives would be tickled to receive any of those items as Christmas gifts.