McKinsey & Co. is working on something really valuable: a predictive model for overheated asset markets (bubbles) like the one we're recovering from now. Key quote from the article, which first appeared in the Financial Times:
"The answer lies not in the level of debt alone, but in the sustainability of debt."
The right predictive models could be enormously helpful. We probably wouldn't have believed them during the recent real estate run-up, but I'll bet we pay attention going forward. - David
Showing posts with label McKinsey and Co.. Show all posts
Showing posts with label McKinsey and Co.. Show all posts
Thursday, January 28, 2010
Thursday, November 5, 2009
The Housing Bubble: A Worldwide Phenomenon
The major adjustment we've experienced in real estate values isn't at all limited to the United States. The attached, from McKinsey & Co., shows this how home prices have fared in major international economies:
Why? International economies are irreversibly linked by trade, investment, and expectations. Our actions have worldwide implications! - David
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