Where's the second crash?
We all understand that the economic future looks shaky... unemployment will remain high, commercial and residential foreclosures will continue, and the high deficits and weak dollar will put on ceiling on the recovery. Yet, September's stock market keeps rising to the incredulity of the Bears.
The tide of rising asset prices lift all boats (assets, that is). Despite the warnings that housing prices can continue to crash up to 25% lower (per notable CNBC interview with Meredith Whitney on September 10 ), that will only happen in conjunction with a major stock market correction, which would resurface housing market doubts.
The double dip scenario is quite real. One thing that Bernanke and the Fed have demonstrated over the past year is that they can actively manage the stock markets, and by extension, the assets markets, through policy and monetary calibrations. If they can ease in the recovery without a significant collapse (see WSJ's Is the Bear Market Rally Theory Dead?), then we'll realize that the housing bottom is now. The global banks' control over the global economy has been working to script, I don't see a debilitating double dip on the horizon.
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