Sunday, July 27, 2008

Kaletsky bear-baiting again

Pessimists are basing their gloom on old news

My view is that this episode is likely to be remembered as one of those extremes of panic in financial markets, which tend to reoccur once or twice every decade, then turn out to be simply wrong. In making this argument, I have been accused of ignoring market realities and being blindly contrarian. The true contrarians at present are the bankers and headline-writers who keep predicting economic Armageddon. The markets are taking heart from the government guarantees offered to Freddie Mac and Fannie Mae - hence the 40% rise in financial shares this week. And US house prices, which almost everyone believes to be in freefall, have actually been going up for the past four months, according to the National Association of Realtors.

Posted by little professor @ 10:34 PM (1101 views)
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5 thoughts on “Kaletsky bear-baiting again

  • mytimeisnigh says:

    “And US house prices, which almost everyone believes to be in freefall, have actually been going up for the past four months, according to the National Association of Realtors”.

    ???? Keep taking the drugs.

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  • little professor says:

    They have, actually. Mind you, the NAR are the very definition of a vested interest.

    The Case-Schiller index, which is more authoritative, lags by 3 months.

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  • No-one believes the NAR figures apart from David Smith.

    The housing crisis in the US has bottomed out? No need to worry about the solvency of Freddie Mac and Fannie Mae then.

    Right?

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  • Is it just me or can anyone else see the lack of any statistics or logical mathematic process to back up this view. Sorry Anatole I am not being disrespectful but I don’t see your view backed up with any figures – or perhaps you will correct me?

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  • beartil2010 says:

    US stats – inventory is still double the norm, so surely the demand can’t be forcing up prices, and foreclosures are up 150%. Are the numebrs really going upward?

    Even with purchases going up slightly, banks are still charging more for mortgages as they cut back on lending – at least they are here – are FM & FM really going to carry the US mortgage market? Don’t they realise they are being taxed to pay to support them?

    hmm…

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