Bubbles in global profit margins, risk premiums, and U.S. and U.K. housing prices . . . have thoroughly burst and are in their overcorrection phase with the single exception of U.K. house prices, which I’m confident will do their duty.
--Jeremy Grantham, "The Last Hurrah and Seven Lean Years"; Q1 '09 Letter
Maybe it's just because I agree with him, but money manager Jeremy Grantham continues to provide one of the most comprehensive, astute takes on the current investing landscape. His first quarter newsletter is no exception.
As the paragraph cited above indicates, Grantham believes that the bubble in U.S. housing prices has fully burst, and that prices have now overcorrected. Of course, that judgment is at odds with consensus economic forecasts, which call for continued declines.
P.S.: If you're looking for a term sure to gain added currency, it's "the financial-industrial complex" (go ahead and Google it and see what comes up). I had no idea when I used it in a post this Thursday that Grantham had already beat me to it.
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