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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Tradelite who wrote (1092)11/30/2001 6:49:07 AM
From: OblomovRead Replies (1) of 306849
 
TL, I have to agree with tippet here. Based on my research, I don't believe that housing prices themselves are at bubble levels in most of the US. The bubble exists in the credit system. The extension of easy credit and the securitization of credit during the 90s have created a system that is very sensitive to fluctuations in asset prices, one in which mutual trust is essential. When trust is broken, the result is an Enron-like blowup. The one thing for which many consumers are not prepared is a credit crunch. The one thing that will cause financial intermediaries to blow up is a lack of demand for credit. What if both happen simultaneously?
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