If there’s anything that’s driving me bonkers it’s that it’s hard to tell how to prepare – beyond saving like hell, paying down debt, and not doing any investing for awhile. I’m also working to get out of the financial industry job-wise.

One thing I do wonder about is regional issues – how will effects vary by region, both worldwide, and regions in the US. In Northern California where I live, we had a drought of jobs for Q3 and Q4 – with a sudden surge in Q1 08. Meanwhile a friend of mine in Ohio is reporting a meandering job market for over a year.

Apparently you aren’t looking to move soon. Or you aren’t looking to use a good credit record and low mortgage rates to re-fi so you can put your kid through school. Perhaps you’re just tired of high property taxes and welcome the relief that a 20-30% drop gives you. However, on the ass-end of that is lower local revenues for schools, streets, sewer, police and fire protection, and the other things you may not be aware of paying for. Maybe you’re in great shape, but the people on either side of you aren’t and end up using “jingle-mail” as the article mentioned. 6 months later, you’re stuck with empty homes and unmowed lawns on either side of you.

Worst in the last 25 years? There haven’t been any downturns in the last 25 years.
If we are lucky, the coming bust will be as mild as in the 70’s. Think not just of financial markets, but empty strip malls, failing rust belt towns, crime, crime, crime, and a president so powerless that a win button was the solution.
At worst, the 30’s will seem like a picnic.

However, all the losses in the credit structures or house prices. This is not real wealth wiped out, it’s fictive wealth instead, isn’t it? I mean, the house which has had an inflated price will still be the same house, even if the price tag assigned to it has a lower number at a later time coordinate, won’t it? And the certificates representing debt amounts whether bonds or derivatives and all the structured stuff are just promises on cash flow expected to be generated in the economy in the future that won’t be fulfilled.

Such a financial meltdown and the housing bust, as much pain it can cause for the individual whose budget has been decreased or even wiped out (someone else made a gain from it), wealth integrated over the whole society won’t be destroyed at all by such a financial meltdown itself, will it?

I am sure such a meltdown will also have an effect on the real economy, on production and consumption, insofar the circulation of capital is disrupted and consumers will have to cut back their spendings more towards their real income, instead of continuing with private deficit spending that is just not sustainable. I just fail to see the doom in all of this.

Seriously while I see that it could play that way, I’ll take some comfort in the whole “fooled by randomness” thing. Once right does not guarantee twice right. In this case, thank goodness.

… but I’ll keep an eye on it, definitely.