Another must read from Steven Roach
The Endgame

Meanwhile NTY notes the mismatch between the CPI an the bubbling of home prices. "How Home Prices Can Be Hot but Inflation Cool"

In other words, a home isn't just where you hang your hat or an investment in the future (or, in the case of visitors to CondoFlip.com, for two days). It's something that is consumed, the way potato chips, gasoline or a barber's skills are. So the bureau decided to track a measure that represents only the consumption of housing: rent. And rents had much to recommend themselves as a long-term inflationary yardstick - they don't jump significantly from month to month - and as a proxy for home prices. Over time, after all, rents correlated very closely to home prices.

What will the banks do when housing prices drop back to that which incomes can support and that which would enable an investor to buy a home based solely on profitability derived from rent rather than bubble speculation? They will say bail us out, because we could not help ourselves and the economy needs us, even if we get carried away with carry-trades.