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: No Mo Mo who wrote (37597)	8/2/2005 6:11:31 PM
From: Wyätt Gwyön	Read Replies (2) of 110194

JDSU is probably too extreme a comparison because it traded up to 50x sales. the equivalent would probably be about $15-20 million average price for CA homes (which would allow them to drop 99% like JDSU). i think Boston RE fell 87% in real terms, and 85-90% real-price drop for the most extreme markets should not be unreasonable as the current bubble unravels. the fly in the ointment this time is that inflation is lower, so more of the real adjustment will have to come out of the hide of nominal prices and not be hidden by inflation. given the interaction between debt levels and nominal prices, it could get hairy.

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