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The Dorothy Theory: Bonds run amok

By Implode-Explode Heavy Industries

"If and when the idea takes hold that home prices would seem to stabilize, large numbers of thus far unaccounted-for homes from the 10 million+ shadow inventory will come on the market, quickly overwhelming both demand and price recovery. A similar development will take place if employment numbers appear to pick up: millions will start looking for jobs that have fallen off the radar in the past 2-3 years simply because they had given up all hope. Latent demand is a known economic term; latent supply is just as real. Not counting large numbers of unemployed and large numbers of empty homes is also a type of bad accounting. "

Full post as published by Mortgage Lender Implode-o-Meter on April 10, 2010 (boomark / email).