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Bill Fleckenstein: Housing mess too big for a quick fix
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This Link is located in the Public Channel Housing Bubble and Bear Links.
Posted by ian 2 years 16 days ago (articles.moneycentral.msn.com). Views: 47
Tags: housing bubble |
| Related Tags: credit crisis gold wall street peter schiff economics inflation banks |
As for those folks who think still-lower interest rates would reinvigorate demand, Bob Campbell of the San Diego Real Estate Timing newsletter counters with this undeniable fact: "When an asset like real estate becomes overvalued, even if you drop interest rates to zero, you can't force consumers to borrow more, because they've already borrowed too much. Nor can you force lenders to lend, because they're already puking on 'bad paper.' It's called a liquidity trap."
I don't believe there's any way to get the genie back into the bottle or to solve not just the size but the complexity of the fundamental mortgage problem: Too many people are involved with too many different agendas to make these credit problems go away quickly and easily.
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