Housing prices

Many homeowners have a peek at Zillow every now and again to see how much their home is worth. Maybe not so often these days as it is apt to be falling! By conventional standards, families can afford a home priced at two to three times their annual income. In our neighborhood, houses are $600,000 and up. And I know most people are not making $200,000 to $300,000 a year. Of course, most bought years ago when prices were lower. But for prices to stabilize, people must be able to afford to buy at current prices. And I don't see that happening yet. I think housing will fall an additional 40 to 60 percent from current levels.

Oil prices

While I am still a believer in peak oil, oil prices have risen too far, too fast. The prices north of $140 a barrel could not be maintained and have fallen back. I'll go out on a limb and predict that oil will fall below $100 a barrel in the near future (spot price today is about $115). This will be good for the economy and the stock market, but don't be fooled. The long term trend is up and we'll see $140 oil again.