Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Ilaine who wrote (5663)	7/6/2001 7:48:27 PM
From: TobagoJack	Read Replies (1) of 74559

Hi CB, Financial Engineering is not for the J6P, but they do it anyway ... gsd.harvard.edu freep.com QUOTE It seems we've been pulling the profits out of our homes and spending them, says the 2001 Harvard University study called "The State of the Nation's Housing." "Borrowing was so heavy in the 1990s," says the study, "that home equity as a share of home value dropped 10 percent, even as home prices rose sharply." Home owners are acting more like commercial enterprises, says Barry Havemann, a prominent New Jersey mortgage analyst. Businesses minimize the cash tied up in their buildings; they keep the buildings highly leveraged. "Apparently, home owners aren't really aware of what they're doing," Havemann says, "but that's basically what you're seeing now." UNQUOTE

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