Interesting take on things, but I disagree on his theory about the china slowdown being required to trigger a major slide in house prices.
As he says, a reduction in borrowing power will cause prices to fall, and the falls will further reduce borrowing power as the result of lower asset prices means even more credit contraction etc and the cycle continues.
Credit availability is already under pressure due to refinancing costs that the banks face from the stupidly large amount of cash they had to borrow in 2009 and 2010 to loan the the very large number of FHBuyers and other debt feasters, to pay for the stupidly expensive housing stock.
Increased Refinance costs will likely have to be passed on to mortgage holders this year
IMO, the original thing that is wrong, comes back to make the participants pay the ferryman. Like a cheating husband or wife, the other party will always somehow be found out after the party is over, and destruction of relationship and family follow. There is also no free ride with a credit binge or orgy. The price will have to be paid, something will make it so, doesn't really matter what the catalyst is, itjust happens.
