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strbear

Acceptance That House Prices Drive The Economy

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Howard Silverblatt, a senior index analyst at Standard & Poor’s, said: “House prices are at the root of everything. Not only do the borrowers and lenders lose when defaults rise and house prices decline, but interest rates rise, so consumer and corporate spending are hit, corporate profits go down and the economy suffers.”

For the last 6 months every "professional" has been saying sub-prime won't spill over to the broader economy - what other expert views have now changed?

SB

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Amazing isn't it ....... views that were being expressed on here for a long time ( prob since the site was setup ) which were roundly poo poo'd by 'well informed' professional economists with their fingers on the pulse are now slowly being accepted. It seems that most contributors to this site have a better grasp of what is happening and a better record for predictions than the main stream economists.

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S&P were saying this back in 2005, that the market would gradually drop, high multiples of average household income, low mortgage rates, looser lending standards and looming interest-rate increases were all going to slow it down.

They were wrong about slowing the market but they had half of the hpc mantra, just missing the part about house price bubble growing bigger and not gradually deflating. Which we all saw happening with increasing concern.

added link

http://www.marketwatch.com/News/Story/Stor...p;siteid=google

Edited by maxwell

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For the last 6 months every "professional" has been saying sub-prime won't spill over to the broader economy - what other expert views have now changed?

SB

.... and before that they were all claiming that a sub-prime problem would never happen.

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Amazing isn't it ....... views that were being expressed on here for a long time ( prob since the site was setup ) which were roundly poo poo'd by 'well informed' professional economists with their fingers on the pulse are now slowly being accepted. It seems that most contributors to this site have a better grasp of what is happening and a better record for predictions than the main stream economists.

I think people are now realising that the economic miracle is turning to a disaster. The economy has been pumped up by the hous eprice bubble which has increased consumer and governement spend. Take away HPI and the economy is at best flat to falling. No HPI = no "growth"

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