Mike B)
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I watch it too. It's been gyrating between 10-11k for months of artifical `hope'. There was the story about supporting housing prices via some forclosure loan restructure from some guy from Newport Beach---a rich ex-urb of LA whose wealth no doubt depends on jacking the housing market. They are obviously scared shitless SoCal's housing market will continue to deflate. IMHO, its got another few hundred thousand per unit to go.
I judge the housing prices by the inflated rent around here. I am paying about a third more than I should---and I am in a formerly rent controlled place which had suppressed rents for almost twenty years. If I am paying a third more, the more usual rent is about a third more than I pay. So for 600k house, kick off 200k to get to my level (one third off), then kick another 200k off to get to a realistic level. These crude calculations move housing back down to affordable levels---the very last thing the real estate market wants.
Now let's suppose the DJIA works like the bullshit real estate market in Berkeley---which I think it does. If we kick a third off 10.50k we get about 7.03k. Kick another third off to get roughly 4.71k. Now that is very near 1995-6 levels about the time the DJIA went asymptotic. I was dead broke then, and I am even more dead broke now. Starting in 1996 for me things improved until about 2000 which also corresponds to just about the last time my life, my wages and the world made any sense at all.
http://en.wikipedia.org/wiki/File:DJIA_historical_graph.svg
Now imagine that the DJIA dropped to 4.71k. This is neoliberalism's worst nightmare, that hype will slither off the dream ledge into the abyss falling to splatter on the canyon floor of reality.
Children of the mire, let us pray. Oh Lord, DJIA, fall, fall, and come unto us as Ye did in the days of Noah.
CG
