The Epic American Credit and Bond Bubble Laboratory Message Board

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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: orkrious who wrote (4720)	1/10/2004 11:57:50 AM
From: Ramsey Su	Read Replies (4) of 110194

Regarding the Greenspan speech. Translating Fedspeak, what Greenspan said is they mitigated the consequences of the first bubble by creating a bigger bubble. What is not discussed by most is the difference between a stock/equity bubble vs a credit/real estate bubble. The former has far less consequence to the average joe. A real estate bubble, on the other hand, will affect far more people. A stock market wealth effect is supported by a lot of discretionary income while a real estate wealth effect is supported by a lot of borrowed money, AND, secured by the HOME. I am looking at NCEN and LEND. At the moment, I believe they may actually be heading into their best cycle. Demand for subprime products should be high as the economy slows. Furthermore, there appears to be an endless supply of big banks that are willing to buy these subprime loans.

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