This video is sort-of tech-related as Google regularly brings speakers in to talk to their employees about future trends plus a little bit of prognostication. Paul Krugman is a New York Times columnist (and blogger that I read regularly) and he recently discussed the current housing bust and the implications for the future at Google (Found via Firegodlake).

The bullet points I latched onto:

• He predicts a slow, 30% decline in housing prices over 6 years. It will be worse in “zoned” areas where the bubble was inflated more.
• In his opinion, the housing bubble is less forgiveable than the .com bubble, as at least the latter had some technological innovation and future profits (that are just now being realized). Whereas houses are “just houses” - not profit generating business, and any worth beyond its materials and land is pure speculation.
• “Financial innovation” in the form of chopping up debt to reduce risk is basically a crock.
• Inability to make payments may not be the driver of foreclosures in the future - it may be negative equity. As prices drop, many might just choose to “walk away” from a depreciating asset and let the bank - which is the actual owner - deal with it.
• He puts recession risk in 2008 at 50% with a small chance of a complete financial collapse.
• The recent measures taken by the government should have cleared up the problems but haven’t. He doesn’t think there is any policy that can help at this point. The most likely situation is for the banks to continue slowly losing tons of money until the billions of worthless loans are realized for what they really are, and for house prices to lose value. This process will likely take years.

But the good side (yes, there is one) - he didn’t think any of this would affect the economy at large over the long term.

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