Yale Economics Professor Robert Shiller - "We are talking trillions of dollars worth of losses"

Unlike the jokers at Harvard and the NAR, here's someone who gets it. Thank god for bubble-busters like Shiller, Schiff, Thornberg, Roubini and Roach. I'll take the intellectual firepower and morals there any day over corrupt bubble-cheerleaders like Lereah, Yun, Bernanke and Retsinas.

“American real estate values have already lost around $1 trillion [£503 billion]. That could easily increase threefold over the next few years. This is a much bigger issue than sub-prime. We are talking trillions of dollars’ worth of losses.”

“Over the next five years, the futures contracts are pointing to losses of around 35 per cent in some areas, such as Florida, California and Las Vegas. There is a good chance that this housing recession will go on for years.”

“This is a classic bubble scenario. A few years ago house prices got very high, pushed up because of investor expectations. Americans have fuelled the myth that prices would never fall, that values could only go up. People believed the story. Now there is a very real chance of a big recession.”

Wonk Alert: Mortgage meltdown and housing crash roundtable with housing realists Shiller and Roach

HP favorites Robert Shiller and Stephen Roach are on this excellent panel talking about the credit crisis and housing crash.

Pop some popcorn, open a cold one, and spend the hour here. You'll be glad you did.

HP'ers, I can't believe I'm saying this, but even we may be shocked at how bad this crash is gonna get: Economist predicts 50% drop in home prices

Close your eyes and think of what a 50% drop in home prices looks like.

AAAAAAAAAAAAAAUUUUUUUUUGGGGGGGGGGGGHHHHHH!!!!!!!!!!!!!!!

Phoenix, Vegas, Miami, Sacramento, LA, Tucson, Naples, Tampa, .... there's gonna be some bubble cities, those whose economies were based on housing speculation, mortgage fraud, REIC jobs and homebuilding, that are gonna see economic collapses straight out of '29.

Even if (and when) the Fed lowers rates to 0% (hello, Japan!), it won't matter. When home prices soared 100% for ABSOLUTELY NO REASON in these cities (as incomes and rents remained flat), well, it takes a 50% haircut to get us back to reality. And look over there, right on schedule, here comes reality, and it's cold, and it's hard.

Two top US economists present scary scenarios for US economy; House prices in some areas may fall as much as 50% - Housing contraction threatens a broader recession

US homes may lose as much as half their value in some US cities as the housing bust deepens, according to Yale University professor Robert Shiller. Meanwhile, Martin Feldstein of Harvard University says that experience suggests that the dramatic decline in residential construction provides an early warning of a coming recession. The likelihood of a recession is increased by what is happening in credit markets and in mortgage borrowing. Feldstein says that most of these forces are inadequately captured by the formal macroeconomic models used by the Federal Reserve and other macro forecasters.

“The examples we have of past cycles indicate that major declines in real home prices — even 50 percent declines in some places — are entirely possible going forward from today or from the not too distant future,” Shiller said in a paper presented last Friday at the Federal Reserve Economic Symposium in Jackson Hole, Wyoming.

Cool tool - check out the Case-Shiller home price index and home price city graphs

Rising prices bring people (speculators, first time buyers) into the markets, making prices rise faster.

Falling prices push people away from the market, making prices eventually fall faster.

Got it?

Ever get to the tip top of the roller coaster climb, and you can tell you're just about to go down a really big hill? The dread, the excitment, the tumble into the unknown, the front cars plunging while the back cars clueless about what's to come...

Weeeeeeeeeeeeeeeeeeee!!!!!!!!!!