Sunday, December 23, 2007

Will oil prices or house prices be the major economic news of 2008?

Oil prices or subprime losses?

An interesting Post which looks in depth into a question posed by a recent article, will high oil prices or sub-prime be the biggest economic driver next year? In asking the question it brings together many of the best house price graphs and compares it against the issue of $100 oil. It is from an American perspective, but interesting nonetheless.

Posted by planning4acrash @ 10:41 AM (702 views)
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One thought on “Will oil prices or house prices be the major economic news of 2008?

  • planning4acrash says:

    Now, you are all a bit quiet today, maybe you are debating this on the oildrum blog instead?! OK, here’s the conclusion (question) posed by the article: “To summarize, we know that IF gas prices at the pump rise by $1 per gallon, the public will have $150 billion less to spend on other purchases. Following Mr. Feldstein’s speech, we see that home prices would have to fall by 15% to cut consumer spending by the same $150 billion. Which of the two is more likely to happen?

    That’s what we would like you to respond to.”

    Q from me: How would those figures look in UK/Europe, how far would house prices fall and how much will that dent consumer cashflow vs a 1/3 increase in petrol, and which, do you think are most likely, or, do you think both will combine to form a perfect storm for 2008/9? Answers on a postcard!

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