[Freedom_Is_Not_Free]

The economic crisis can’t end until houses stop falling in price, which can’t happen until inventories come back to earth. Higher interest rates and tighter credit mean it will take longer for housing to bottom and for this crisis to end. Higher interest rates make it more difficult to clear out the existing inventory and prolong the crisis. It will take a good long time to clear out the housing overhang anyway, but higher rates will only increase that duration and draw out the economic crisis.

[org.whodat]

LOL, you need to spend a little more time with that eco 101 book. You failed the course the first time.

[mlocher]

The economic crisis can’t end until houses stop falling in price, which can’t happen until inventories come back to earth. Higher interest rates and tighter credit mean it will take longer for housing to bottom and for this crisis to end.

I am not going to disagree with your analysis about supply and demand. I will comment however, that we tend to call this an economic crisis, when in fact it is not. It is merely a normal market correction. While we may be headed there, technically we are not in a recession yet. The MSM has been saying we are in a recession since Jan 2008. 10 months later, where is the recession?