The severity of the upcoming downturn may be a reflection of credit availability. Without easy money, the party ends.
Buffett says:
"At the start of the party, the punch is flowing and everything's going well, but you know at midnight it's all going to turn into pumpkins and mice," he said. "People think they'll be able to get out just before midnight, but everyone else thinks that too."
"The problem is that, in commodities there are no clocks on the wall," he added.
Wow, the Forbes article mentions shorting XHB.
That makes my day.
Consider in 2005, 40% of existing home sales were for second homes or investment. The historical average is 9-10% via David Lareah. There is little probability of a soft landing when volume drops off by 1/3. Everywhere I look, volumes are growing. Everywhere. Inventory levels are an early warning of the impending tsunami. You can run for higher ground, or you can sit and stare at the pretty waves on the horizon.