Case Shiller Updated to February 2008

I am plotting here the graph for LA with two projections. I want to know which one makes more sense to you.
The Blue line is the current S&P Case shiller for LA updated to February 2008
The Pink line is my prediction of house prices behavior from now to about 2012
The yellow line is the housing Bulls prediction of house prices behavior from now to about 2012

The pink line assumes that the unavailability of stated income loans, Option ARMS and stated second mortgages will simply decrease the number of qualified buyers to such a point where over correction would occur, then after getting to some support level by wages, market will flatten and start increasing at the rate of inflation.

The yellow line assumes we have hit bottom, and not going to be flat or start appreciating again....

Now, you tell me, who do you think is right?

Fraudlent COMPS in the Valley

This property might be a reason to open a brand new category on this blog and call it the BEST FRAUD CASE.
I accidentally found this house while browsing foreclosures and pre-foreclosure properties

6201 Corbin Ave Tarzana CA 91356

Sales History:
Sold Aug 29, 1995 $203,000
Sold Feb 07, 2006 $640,000
Sold Jan 05, 2007 $1,330,000
It has NOD right now
Will be Foreclosed on **** for $*****

Zillow zestimate(tm) : $1,108,000
True market value : $500,000-700,000

This is my idea of things that went on here;
Buyer X bought in Feb of 2006 for $640,000 (this is close to the peak of prices in the valley)
He then either fixes the house a little, or throws a fresh paint and lists it for sale for $800,000-1,000,000. Then comes buyer Y, and offer X to pay him more than asking price. How?? Simply on January 2007, every thing that can walk on two feet can get a loan. They find a "good" appraiser that is probably getting paid to appraise this house for more than $1,330,000.... So Y gets the loan, X kicks back $200,000 to Y and everybody wins...You might thing that the bank is about to loose here...Rest assured Congress is working now on ways to make sure that the bank will not loose here. We the tax payers need to bailout this People...

Even worse, if buyer Z wants to buy a house on the street, his RE agent will use that fraudulent comp of $1,330,000 to justify him paying similar amounts for a similar sized house.....
You tell me, does any comp on that street is legit???
It is all based on fraud.