If you are caught in a stampede on the Sarrengetti does it matter a bit whether you are run down by an elephant or a rhino? Look for a big tree to climb and hope there is no leopard in it when you get up there.
Yes house prices could be expected to trend upwards almost indefinatly but American consumers got way WAY ahead of the curve there. It became typical for American familys to have $20,000 in credit card debts, plus student loans with two cars in the drive with loans on both of them that added up to more then they were worth wholesale. The house is typically at the end of a long commute and is more then twice the size needed for the size of the family. On a rising market the buyer had to pay well above the houses real worth and borrowed every penny of it and if he was lucky enough for prices to rise significantly after the sale he refinanced it to get the equity out to go on cruises and such so that few people are close to being midway through their morgages much less paid off.
So now you have people working two jobs hauling in, in the low six figures that have spent it all and are living pay check to pay check. What could go wrong? $4.50 gas could go wrong. A drop in traffic at the store from people not able to spend their gas money on $5.00 coffee or a $20.00 lunch and a spiral begins and the bubble pops. And once popped it stays popped. Even $1.00 gas won't put humpty dumpty back together again.
Except for food and fuel most American houses are over stocked on material goods. Shoes, cloths, toys tvs, electronics, appliances, etc.etc, People have way more then they need and now that they are pressed can and will stop buying more and could do so until they wear out what they have which will take years. If your not in the food or fuel business you are in a world of hurt. And it makes no differance what started the stampede.
