Home prices show marked improvement

do you think prices could be going up because Fmac is taking on all mortgages. do you think if the market was dependent on private equity holding mortgages there would be a rise in prices? and, how long can fmac continue to take on virtually every mortgage in the country.

You're entitled to your opinion, SteveF, but I don't think I'm nuts. NYC tends to lag behind the rest of the country, both on the down-swing and on the up-swing. That was definitely true 1987-1997.

We are still much more inflated than everywhere else. Yes, other places are appreciating, but from a much lower baseline, sometimes 50%-60% off the peak. In NYC we're maybe 20% off the peak now, so I think we still have a long way down to go.

Just my opinion.

economistsview.typepad.com/economistsview/2009/08/an-echo-chamber-of-boom-and-bust.html

Shiller:
All of this suggests that a social epidemic is supporting renewed confidence. This confidence can keep growing by contagion, as a kind of self-fulfilling prophecy, and we may see the markets and the economy recover further.

But in an economy that is still unstable, the stories could also morph into different forms, the price feedback could turn downward and the dynamic could turn ugly again — just as it has in the past.

Thoma's commentary:
It seems quite reasonable that the spread of information (wrong or right) can reinforce trends in economic activity, and hence magnify and propagate shocks, but as noted in a part of the article not included above, this doesn't help us much with the problem of predicting turning points in economic activity. Predicting when the stories suddenly "morph into different forms ... is actually very complex. And even when feedback mechanisms are straightforward, they can produce very strange outcomes, not predictable very far into the future..."