Sunday, November 04, 2007

No, the city's not a magical bubble-free zone

Feeling the Effects of a Housing Bust (in NYC) by Andrew Beveridge

"As the housing bubble seems about to burst, low-income people with mortgages have the most to lose, but most New Yorkers will feel some effects of any real estate collapse. ....."

Executive summary: Minority and poor New Yorkers will feel the effects of the nationwide housing bubble's burst most acutely; big surprise to the editorial board of The Wall Street Journal, maybe? Probably no one else.

Also, if financial firms keep getting hammered, there could be a repeat of 1987, when the NYC housing market fell along with the stock market, but took eight years longer to recover. The 1929 crash is unlikely to happen again, since the ideology of believing in the perfection of free market capitalism died a few years after; and although it largely resurrected itself in the 80s, it is now understood by all but the most zealous that socialism has to be used to rescue capitalists whenever they stumble into one of their inevitable bouts of financial self-destruction.

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