Housing Doom Housing Bubble Blog

Well school’s out, and with the 4th of July holiday right in the middle of the week markets will be pretty sparse. Igor may just light a candle on the 5th in honor of my first anniversary with Housing Doom, but besides that there’s not much in particular in housing the MSM is looking forward to. Last Thursday’s amazing Mark Pittman piece didn’t collapse the bond market on Friday, so it is unlikely to do it this week either. Perhaps we can finally have a nice boring week at the Castle.

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AEI’s March 28, 2007 Subprime Seminar - X

This is an unofficial transcript of a dozen minutes of the Q&A session from AEI’s March 28th seminar on the Subprime Mortgage Crisis.[1] The three questioners formed a neat package, with the focus on economic linkage and the risk that the crisis in subprime mortgages could lead to a recession in the larger economy. Panel members gave illuminating responses to each query.

First up was Elliot Levy from the Department of Commerce. This old departmental phone list suggests he has been involved with DOC’s Industry Competitiveness and Regulatory Analysis section under The Office of Competition and Economic Analysis. Levy asked the panel how the subprime crisis related to various parts of the manufacturing sector. Nourini discussed various linkages in the economy that connect housing with manufacturing. Lachman then expanded on the connections to wealth and consumption. The next questioner was Gary Berman of Tri Continental Capital. He challenged the panel to reflect on whether their statistics already implied how the subprime mess was going to play out. Lachman asserted that "a lot of this is baked in the cake". Then Whalen spoke to the generational changes on Wall Street and how many of the players haven’t yet experienced a real hard downturn. Finally Bonnie Watchel, according to this story [2] quite a colorful securities industry worker, suggested that the 1990 / 91 recession wasn’t really all that bad. Roubini countered that with recollections of some of the persistent after-effects of that event, and suggested that any recession now would likely be much worse.

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