The Chart That Says It All About Hpc...

[billybong]

1. The floor of -18% is because that's the lowest observed. They also have a ceiling of +30%, but not because that's the highest possible.

2. Extend the line connecting the lows for long enough and you'll get -100%. That doesn't mean that -100% (or -30%) is going to happen.

It looks an interesting chart, but someone has obviosuly chosen their start point very wisely for effect. Why does it start randomly half way through 2002? Because that's what helps their spin.

Start it in 1945 and then let's see the long term patterns.

1. Quite possibly and possibly because they needed room in the article for more text. My point was to highlight that the floor chosen in the chart didn't necessarily mean that -18% was the % YoY limit (i.e. an intentionally or unintentionally implied floor) and larger falls are quite easy to imagine.

2. I quite agree and I didn't say that -30% YoY was actually going to happen but that if the current trend was followed then it was a possibility and that it became more likely as the years go by as the total amounts of money involved became smaller in a declining market. Mind you I bet some people would really like -100% YoY.

3. I agree a more extended chart would have been useful but nevertheless the information shown was still quite interesting

Edited May 11, 2011 by billybong

[billybong]

If a shock is indeed unlikely, it becomes more likely that the boom will end with a whimper rather than a bang – a period of stable prices before they start falling over a lengthy period. Such a reversal is also unlikely to emerge inside less than a year, given the present buoyancy of the market.

Just to emphasise that the present buoyancy of the market in 2007 resulted of course in a crash.

Edited May 11, 2011 by billybong