Monday, September 04, 2006

One-two punch

Allow me to revise and extend my remarks of a few days ago, in which I said the collapse of the housing bubble had now permeated the public consciousness. What's permeated the public consciousness so far is that housing prices do not indefinitely rise all out of proportion to the cost of living. Bill Bonner at the Daily Reckoning cites a Business Week article on the bloodbath to come when the option ARM mortgages reset. This has not yet become conventional wisdom. It will, instead, be the second part of a one-two punch that reality is dealing to the housing market.

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