I believe we 'bubble busters' have been way too modest about the accuracy of our predictions, and I'll tell you why.

First of all, many of us were pointing out that there was a bubble long before it was popular. Most of us got accustomed to being ignored. Sure, we weren't able to predict the top but we were right about the fact that there was a bubble, and that it was a big one.

Still, we became leery of picking the exact moment of doom. The bubble keep expanding and expanding, and people who denied the bubble appeared to be getting richer and richer, so all we bubble busters could do was mutter..."you'll rue the day, I tell you."

Personally, I think even those who benefited from the bubble knew deep inside that something was off, like finding a load of money in the ATM account and suspecting that the bank would catch the mistake someday.

It may not seem that IHTBYB or Busterbilbo were anything like 'modest' in their predictions, and yet....even they will back down to the accusation that is often thrown in our faces -- that we can't KNOW what is going to happen.

To Hell with that. Yes, we can.

So now I'll tell you why.

Think of the bubble as a tsunami. It's washing ashore, and pretty soon (oh, gee) it's up to your knees. You get on top of your table, but the wave keeps coming, and pretty soon (oh, my) it's up to your thighs. You run up hill behind the house, but the wave still keeps coming, and pretty soon (oh, heck), it's up to your neck. You start climbing a tree. Gurgle, gurgle.

Whew! Cough! Finally, the wave crests.

There was no way to know ahead of time, just how far up the landscape the wave was going to crest.

But you know EXACTLY what territory it's going to cross on the way down. Yep, it's the same territory it crossed on the way up.

So while the bubble was happening we couldn't really know how many houses would eventually be built, how many businesses created to ride the wave, how many stupid loans would be made -- but on the way down, we know how many houses WERE built, we know how many businesses WERE created, we know how many stupid loans WERE made.

For example, we know exactly how many Adjustable Rate Mortgages were made. We know exactly when and how they are going to reset. So the foreclosures are coming, and there ain't no doubt, and no, dammit, I won't back down from that prediction. I won't predict which individual ARM's will fall, but I'll predict a bunch of them will.

We have a whole set of data that can be used to make predictions, because that data was created as the bubble was growing. Historical averages, reversion to mean, all kinds of tools to predict what will happen next.

We know what has happened in the past when there have been regional housing bubbles, and how long it took for them to abate. We even have, God help us, Japan as an example.

We know at any moment how many houses are officially in inventory, and we can make a pretty good guess about how many houses will eventually be added, and we know the current rate of sales, and we can predict how many months it will take to sell those houses. If that rate changes because houses get cheaper, we can make another real time prediction.

Some of us have been through bubbles before, and they follow a certain pattern, that you can recognize if you've experienced one before.

But here's the kicker.

You don't have to believe our predictions. You don't have to listen to us bubble busters at all. You can look at the actual data of what's happening RIGHT NOW! Take the guess work out. Every day, the Bend Economy Bulletin Board lists price changes, and for months now the rate of declines has been between 95% and 100%. That's real time data. Don't believe me, believe the facts.

So now I come to the "THE BEST TIME TO BUY IN 20 YEARS!" crowd.

Here I'm going to use another analogy. This is a rallying cry. And like all rallying cries, it's meant to buck up the troops, get them all riled up, make them charge that hill.

That works great until the first withering volley from the enemy. Once the charge crests, and the troops are in retreat, rallying cries are up against the 'flight' syndrome. More likely to get the person making the cry fragged as it is to be effective.

What the federal government is trying to do is more in the nature of a rear guard action. The retreat is on, and they're trying desperately to keep it from becoming a rout.

But the government -- which has moved quicker on this than anything thing I've ever seen -- is still going to take months, not weeks, not days, to accomplish anything. That isn't going to help the ARM owner who is upside down and already 6 months behind.

So, I'm not a numbers guy, but it's pretty clear that the numbers guys are scared, that the banks know they're in trouble. If anything, any dire predictions made today on available numbers are understating the disaster, because almost everyone admits that there is plenty of hidden bad news, tied up in exotic loans, obscured by arcane accounting techniques.

So, while I can't personally tell you when the bottom will be, I'll make a good solid prediction, based on everything we know, that the bottom is a long ways away. I'll make the prediction that Bend isn't going to suddenly start selling tons of houses in the spring, because of all the factors currently in play. In fact, I'll predict our local economy won't recover for at least a couple of years.

Oh, there'll be the occasional uptick, and I'll get the "BEST TIME" crowd eagerly pointing it out, but I'm pretty sure that over the long haul, when all the real numbers are in, that my predictions will hold.

If not, I'll just go back to blogging about stuff I know more about, like my own business and life.