patrick.net

19th century saw the greatest advancement in civilization. Not until the 1990's did we even proportionately match the level of international trade seen in the 1890's. We have yet to match the rate of economic growth seen in the 19th century. We have conditioned to accept 2% economic growth by our govt masters.

In my opinion home prices are only just now beginning to go down. Loan appraisal procedures are being tightened, to what they should have been in the first place. This will eliminate many potential buyers without proper income.

Notice that prime lending rates were dropped by 0.5%, and will probably be dropped another 0.25% or 0.5% at the next fed meeting. I thing this is a way for the fed to provide the banks a window of opportunity to recoup some money that they lost in hedge funds. The sudden spurt in the stock market is likely to cool off after the holiday season. Several banks would've gone under had it not been for the interest rate cuts.

The era of the free-money for home buyers is over for now. The housing market, especially in the bay area will likely have all the time in the world to cool off in the next few years.

One of the elements of surprise is - a likely war in the middle east. That will provide a breather at least for the falling US dollar, and also bring down the Euro, and restore back the Greenback as the most favorable currency.