Krugman warns of lasting housing downturn

House prices could fall by 30% between now and 2010, destroying $8 trillion of wealth, says the Princeton economist.

It has become a tradition for extremely intelligent people to say very depressing things at CLSAÆs benchmark Asian conferences. The latest example, with economist Paul Krugman addressing institutional investors and company managers in Tokyo, did not break with convention.

Krugman said the housing slump in the US could take up to two years to work through, and that up to 20 million mortgages could be underwater if house prices decline by 30% between now and 2010 û which Krugman...

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