Which means that except for that errant spike in home prices in April 2011, we have now seen 18 consecutive months of housing price declines since that "rebound" in late 2009.

And what is the Central Bank's record with respect to the moribund housing market? What have those low mortgage interest rates accomplished?

Single-family starts (data start in 1959) and permits (data start in 1960) set all-time lows in 2011, totaling 429,000 and 412,000, respectively.

Good job!

a little story. If you have studied population dynamics, you'll recognize that what I wrote is a fictionalized version of the Lotka-Volterra model of foxes and rabbits interaction. I think it is the bottom line of Dilworth's thesis: humans are smart at inventing technological toys just as foxes are smart at catching rabbits. The results, however, are not necessarily good. It doesn't matter if you are a fox or a human being: you are too smart for your own good. (Image above from Jokeroo)

And they laughed at the old fox and they returned to chasing rabbits.

And then, the Great Die-Off came. I have been telling this story many times and it still scares me, even though I am the oldest rabbit of the Island. But I have to tell to you this story, young rabbits. I have heard it from my father, who heard it from his father, who heard it from the father of his father, and so on in a chain that arrives to one of the few rabbits who survived the Great Die-Off. And, believe me, young rabbits, it was a terrible time, for the Island was full of foxes.

For us the world is vastly simpler in some sense than the academy, vastly more complicated in another. So the central lesson from decision-making (as opposed to working with data on a computer or bickering about logical constructions) is the following: it is the exposure (or payoff) that creates the complexity —and the opportunities and dangers— not so much the knowledge ( i.e., statistical distribution, model representation, etc.). In some situations, you can be extremely wrong and be fine, in others you can be slightly wrong and explode. If you are leveraged, errors blow you up; if you are not, you can enjoy life.