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The Housing Crunch Without Houses   Why It's Safe to Bet Against Joe Lewis
Mar 20 2008 10:49AM EDT

Will Burglaries Rise in a Credit Crunch?

The world of stolen goods, like any other market, is in thrall to the dynamics of supply and demand. The supply comes from burglars, who burgle houses and steal goods. The demand comes from a much more disparate and less well-defined group, who can to a first approximation be considered "people who want stuff they can't afford".

It turns out that as demand for stolen goods has been falling, the incidence of burglaries has been falling too, just as you'd expect. But what happens now? There's a case to be made that "people who want stuff they can't afford" have found it easier, in recent years, to just go out and buy that stuff legally, putting it on their credit cards and then paying off their plastic with home-equity loans. (See: the world's scariest chart.) But in a credit crunch, people can't do that any more. So will they revert to buying stolen goods? And will burglaries therefore start rising, for the first time in 30 years?

(Via Cowen)

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