12/15/08 Revisited

Exactly one year ago today and 3 months after the collapse of Lehman Brothers I uploaded a webcast discussing the downturn which concluded:

"Finally, to speak to the most common inquiry we've had: "How long do you think the recovery will take?", I can give my own thoughts and a prediction.

From what I've observed through the years and during past financial crises, there seems to be a function in place that echoes Moore's Law and the rate of development in digital technology.

To re-phrase this with a vernacular twist, "1 year is the new 3 years". That is to say how these things evolve follows old themes, but the speed with which they do so continues to increase with each successive occurrence.

If you feel that this particular crisis will reach Great Depression proportions, please note that the reversal of that crisis started within 5 years, and a full recovery was achieved 5 years after that.

If I'm right, our bottom should be reached approximately 20 months from early September--that being around May of 2010, and full recovery by the end of 2011.

Also, given that my statement "1 year is the new 3 years" is itself subject to the same forces it implies, these time periods may prove to be even shorter; and of course, if you think this crisis is of a lesser magnitude, even shorter than that."

At that time, these thoughts were greeted with much skepticism and some outright condemnation--today, as then, we stand by our assessment.

--Leigh Zaph. (any comments can be emailed to us at webitorials@manhattanhomesinc.com, thanks).