Will the real economy please stand up?

It was during a little down time. We were cutting through this feature story about the New York City housing market, when suddenly, without warning the writer laid down an uncanny prediction about the year on Wall Street, without warning, comment, explanation or nothin’. Coming from someone other than the usual self-aggrandizing Wall Street guru, it had the ring of authenticity. Which is why we’re passing it on.

“What about Wall Street bonuses? There are rumors that they’ll be sizable again, and brokers say bankers, traders, and hedge funders like to use their bonuses to buy real estate.

“Wall Street will not rescue the housing market in New York for two reasons: First, there is a limited number of investment bankers and Wall Streeters. They already own homes, and their demand is constant—if they sell a property and buy another one, the net demand is unchanged. Second, Wall Street has been doing well, in part, because we have been living in a bubble, and it is bursting. We’re going to have a national recession in early 2007, and Wall Street profits and bonuses will sharply drop, limiting the wealth of these Wall Street bankers and traders. Also, hedge funds are doing lousy this year; returns for many hedge funds are below safe Treasury bills.”

http://nymag.com/realestate/features/21675/?imw=Y”> The Descent:
One extreme view of how long this market will last.[NewYorkMagazine]