Tuesday, April 26, 2011

Is Robert Reich Signalling It's Ron Paul Time?

Reich thumbs:
When gas prices rise, SUVs and incumbent presidents go out of favor.

1 comment:

  1. Off topic: Doc, I do not think that we will see the sustained rise in home prices that you forecast to begin later this year, once the foreclosure backlog clears.

    I ran the numbers on the downturn and run-up in San Diego home prices over the late '80s/early-to-mid '90s, and found that three factors predicted a sustained increase in home prices: rising employment, falling defaults, and rising sales.

    With the household debt/income ratio still at unprecented highs, I do not see the appetite nor capacity for increasing household debt loads.

    And, given how long it will take to liquidate the household debt to bring debt/income down to historic norms, my gut sense tells me that household formation will remain below average for a long time.

    I think we have long winter ahead for housing. Any year-end peek of sunshine will be fleeting, at best.