It's different this time: Housing, deflation & depression

Now that the economy is careening from a systemic financial meltdown into depression, it is easy pundit pickings to "compare and contrast" this depression with the Great Depression of the 30s and with the Stagflation of the 70s.

We've all seen a number of these analyses, and I have yet to find one which illuminates housing's quite different characteristics in the deflationary 30s, the inflationary 70s and the present. Here is my attempt to draw distinctions between those past depressions and the one we are now entering.

Why single out housing? For the simple reason it is the primary reservoir of both psychological and "real" wealth (i.e. assets as measured in constant dollars or purchasing-power parity.)

Read full story