There’s a couple of issues that seem to keep getting swept under the market by the mainstream media. The first is that things *are not* good. And your article does an excellent job of speaking to this.

The second is that with house prices down 15% across the country, here in the US, the effect of this recession is going to take years to undo. First the downward trend has to stop, then we have to gain back what we lost, then we have to build on it.

Five years seems a believable estimate for getting back to a true position of growth.

Last time this happened, “the recession we had to have”, the OZ economy lagged behind the rest of the world on the way down, stayed, optimistic, a bit longer, and did not hit rock bottom until about 2 years after everybody else. Both stock and real estate markets stayed down for 3 to 6 years.

This one, is supposed, to be worse, than that one was.

“According to a report from Reuters, “The percentage of US homeowners who owe more than their house is worth will nearly double to 48 percent in 2011 from 26 percent at the end of March.”
The statement was based on a report from Deutsche Bank. But get this, “We project the next phase of the housing decline will have a far greater impact on prime borrowers.”

You’ve seen the charts already that show the next wave of adjustable-rate mortgages resetting over the next two years. When that happens in the prime as well as sub prime market, the last twelve months will look like a teddy bears picnic compared to the next slump.”

My 2c?

“Today’s scientists have substituted mathematics for experiments, and they wander off through equation after equation, and eventually build a structure which has no relation to reality”
Nikola Tesla

Substitute ‘central bank economists’ for ‘scientists’, and ‘reality’ for ‘experiments’, and you can understand the basis of all of this…