Gary Shilling’s column in the current Forbes makes me want to lie down for a good long rest — like until 2007 or so:
This year I’ve got ten investment themes that I’ll flesh
out in future columns. Eight should unfold in this calendar year; the last two may not start until after 2006. First and foremost, the current housing weakness will develop into a full-scale rout. As spelled out in my Oct. 3 column, it’s clearly a bubble and is nationwide. Median home prices need to fall 29% to return to their normal relationship with rents and 35% to relink with the Consumer Price Index. The 20% decline I predict may be exceeded.