Sep

26

Kim ZHistorically, how many nationwide-housing bubbles have burst, with consumer debt/savings this high, within an extensively global interconnected economy (and markets), five weeks from election, from a problem blamed on Wall Street greed but designed to increase minority home-ownership, while at war in the Middle East, where credit markets are seizing up and the government wants to purchase the bad debt? And what if the markets don't stabilize long-term once a bail-out is approved?


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  1. Greg Vinately on September 26, 2008 4:32 pm

    Statistically we call that an outlier. However, the questions we should ask ourselves are:
    (1) How many standard deviations is such event?
    (2) When are we going to revert to the mean?

    Perhaps the mean reversion process will start with The Mother of All Mothers of All Short Squeezes as properly named by the Chair a few posts ago.

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