U.S. Housing Is one of History's Biggest Bubbles
Excerpts from an article from Bloomberg, discussing the comments of Jim Rogers, my favorite person from Demopolis, Alabama. I prefer to read the comments of someone who made a ton of money as opposed to reading the comments made by someone whose job is to make comments. By the way, that also applies to me.
The U.S. subprime-market rout that wiped out $2.1 trillion from global share values last week has ``got a long way to go,'' Jim Rogers said.
Concern that defaults among subprime mortgages may be spilling over to other credit markets and hurting earnings and takeovers last week sent the Morgan Stanley Capital International World Index to its worst weekly drop in five years. Further losses may be in store even as shares rebounded this week, said Rogers, chairman of New York-based Beeland Interests Inc.
``This was one of the biggest bubbles we've ever had in credit,'' Rogers, who predicted the start of the global commodities rally in 1999, said in an interview from Hong Kong. ``I have been and am still short the investment bankers in America. I'm also short homebuilders.''
``This is only time in world history when people were able to buy houses with no money down and in fact, in some cases, the builders gave them money for a down payment,'' Rogers said. ``So this bubble is the worst we've had in housing and it's going to be the worst we've had cleaning it out.'' (my emphasis) Afterall, you have to call a spade a spade.