Tuesday, September 18, 2007
Messages for the wider economy and markets
This 'no-nonsense' financial website has regularly plotted long-history 'real' house price indices (ie realtive to general inflation) to support bubble claims. Evidence the US bubble had burst has now been followed in short order by the UK. You don't need house price databanks to realise that the psychological shock of queues of depositors outside Northern Rock marks the end of the great bull market. As a liquidity crisis gradually transforms into a credit cycle, it also marks the end of the Great Stability: politicians' hollow claim to have tamed both inflation and the business cycle. Always circumspect about economic forecasts, No Monkey Business is unusually confident in predicting recession because of the predictablity of real house price cycles and their knock-on effects.