An objective look at today's housing market leaves one scratching their head. Seriously, nothing makes sense. On the one hand you have rising prices (in some markets) and even a return to the flippers. On another, foreclosures, defaults and deliquencies are rising. We recently heard that the tendency to recidivism in Obama's HAMP mortgage modification racket ... excuse me, program is also rising. Recidivism is the percentage of those pesky homeowners to re-default after a "trial" modification period. Lately we have been hearing about those dreaded ARMs making a return, teaser rates to pick up those few who were left behind 5 years ago and have since had an opportunity to save up a little money for a modest down payment.
Nothing makes sense unless you understand what they are doing . And the best way to figure out what they are doing is to look at what they have done. A good place to look is the Cotton Futures Exchange in an age before there was instantaneous information exchange. How does this Cotton market compare to the 1997-201X housing market? It's a perfect allegory.