Average US Housing Price to Return to Peak Price in 2020

September 18th, 2009 by andum | Posted in Economy, Manage Money, Save Money, Wealth Preservation

Paul Kedrosky of the Calculated Risk blog has posted the above graphic prepared by Moody’s economy.com (see full post here or click on graphic) that suggests that the recent peak housing prices will not return to the states hardest hit by falling home prices, such as California and Florida, until after 2023. The average US home price is not expected to return to the recent peak until 2020. Of course, these projections are based on assumptions that may not be met. But, if you own a home and are underwater and hoping for a quick return to a positive equity position, these estimates should temper some of your optimism. Note that the CSI acronym included in the graphic is the Case-Shiller index, a calculation based on repeat sales of US single family homes.

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Economist Hyman Minsky – Economic Crises Inevitable

September 14th, 2009 by andum | Posted in Economy, Wealth Preservation

photo credit: MjaMes1408

Interesting overview of Hyman Minsky in the Boston Globe (see article here), a 20th century Harvard trained economist who was not considered to have had a major influence on macroeconomic thought during his lifetime or after his death – until now.  Apparently, his ideas are now in vogue.  The article highlights his “Financial Instability Hypothesis” – namely, that economic crises arise after periods of economic stability, not instability, when lenders and borrowers take on more risk in order to make more money.   His proposed solutions to a depression like crisis included having the Federal Reserve serve as a lender to firms in trouble (being done) and having the government employ those out of work (not likely). (credit to Barry Ritholtz of the Big Picture blog)

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