Thursday, March 15, 2007

Denial, housing and the stock market

‘The rise in mortgage delinquencies in the U.S. has to be one of the most predictable events of the century so far, but has nevertheless provoked a further reaction in financial markets,’ said Paul Donovan, an economist at UBS.”

So here we are.
I'm no genius but I’ve projected these events months ago. The thing that vexes me most is the depth of denial I am encountering. There are individuals whom I know that do not want to wake up and smell the coffee. There is still time to take positions to cut losses or even in rare cases make profits. I meet with responses of irritation however when I broach the subject of an impending housing to stock market crash with my friends. The most common response is something like sticking their fingers in their ears and saying La-La-La loudly.
I feel like the crazy guy on the street corner crying out to all who will listen that the worlds is about to end, you know that guy.

Contrary to this attitude are Norwegians I talk economics with (I live in Norway).
They come up amazed that my projections over the last two years have played out. They believe however that they have no skin in the game. For them this is a spectator event.

Not so fast…
I know it’s not going to go down well here but Norway is not immune. Though their economy is mainly oil export, they have other areas that are vulnerable and will be affected. The greatest effect though will be negative global economic psychology, this single aspect is what I expect will bring the most pain to Norway’s booming domestic economy. The world economy is a big boat and we’re all in it together.


Post a Comment

Links to this post:

Create a Link

<< Home

Industry Blogs Real Estate Blogs - Blog Top Sites