Superstar fund manager Ken Heebner remains bullish on the economy and stocks. He makes some good points, and I found one particularly interesting about housing:
"I understand how serious the housing problem is. But it's not as broad a problem as widely perceived. It's reduced everyone's sense of financial well-being, but a third of homeowners don't have a mortgage, and the vast majority of people made down payments and have fixed-rate mortgages, so there's no financial strain. For them, the only impact is the psychological impact of declining housing prices. So therefore I don't think this is as big a deal as everyone else does. We've passed the point of maximum distress."
So to some extent housing, as well as the stock market, has become a crisis of confidence. The average guy who has made some decent financial decisions, and lives within his means, doesn't need to be panicking right now.
As an aside, most fund managers have to stay somewhat bullish no matter what. They make their living based on how much money they are managing, and try to be more a calming influence than an inciter of panic.
Here's the full interview. Via Boston Globe.