Saturday, September 16, 2006

Quoting Dr. Kurt Richebcher Quoting the IMF

From A Daily Reckoning article:

"Most housing price busts clustered
around 1980-82 and 1989-92, while equity price busts
were more evenly distributed across time..."

"Housing price crashes differ from equity price busts
also in other three important dimensions. First, the
price corrections during house price busts averaged 30%,
reflecting the lower volatility of housing prices and
the lower liquidity in housing markets. Second, housing
price crashes lasted about four years, about 11/2 years
longer than equity price busts. Third, the association
between booms and busts was stronger for housing than
for equity prices."”

Read the full article.

I seldom count on others work - but I often find myself agreeing with much of what Dr. Richebcher says. He is an economist from another era - one that valued reality over political and personal gain.

Read his peace and see if you don't agree.

There is also a fourth difference between equity and housing busts given in the IMF report and expounded upon by the good doctor - it is worth your serious consideration.


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