Wednesday, Aug 26, 2009
Lovemoney on W shaped Recovery
Lovemoney: Find out why the housing market hasn’t bottomed out just yet!
"My money is on W as each positive statistic has a lingering element of doubt attached to it that suggests further decline looms. It's unlikely that the summer upturn is sustainable and that we'll be back to 2007 volumes and house prices in the foreseeable future. Quite simply, current mortgage criteria will not allow it, and until lenders begin to offer higher loan-to-value (LTV) mortgages, the housing and mortgage markets are stifled.
Far more likely in my view is that we will experience a double dip. In other words, these green shoots will be followed by another downturn before a proper pick up at the end of the big W. This is not my own theory (I'm not clever enough) -- economists are increasingly turning to the idea of a W-shaped recovery."
5 Comments
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1. icarus said...
Not a W-shape. It's a southbound highway with a dog-leg left and a right soon afterwards.
2. will said...
Affordability issues have not been addressed, furthermore, many asking prices are still near their peak 2007 values.
3. Fly By Night said...
Quote:- 'economists are increasingly turning to the idea of a W-shaped recovery'
Wasn't it economists who referred to the pathological Irish economy as the 'Celtic Tiger', ... when it was in a bubble fed by easy debt?
4. robh said...
I think we should not be 'island monkeys' and remember there are other character sets in use in the world
Maybe it will be a Ԉ shaped recession. (I don't have internet skills so my character will probably show as a blob or something)
Todays HPC challenge to find an unusual character that will correctly show the shape of the recession :)
5. clockslinger said...
It's a time thing.... The idea that this can be a process where hanging on and waiting for a sustained upleg of any W or V is misconcieved. The interest rate thing is mitigating the effects right now. After Dave and his mates take over there will be plenty pain for the lower orders to balace the (actually,their) books. But it won't be over in one parliamentary term no matter how much gets stolen from the public by cutting anything that looks like welfare. On the contrary, Spotty and Dave may not want to think too hard about all those ex.public sector workers watching daytime TV and wanting their miniscule bit of JSA. I can't see the millions employed directly and indirectly in the public sector whose jobs are threatened spending much then. Or maybe we'll all retrain at Starbucks or Mc Donalds.
Something tells me five to seven years end to end at least. Of course, it has been double that in Japan.