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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: SouthFloridaGuy who wrote (74167)11/15/2006 11:20:50 PM
From: mishedlo  Read Replies (2) of 110194
 
Meanwhile, equity lost in homes is now being replaced with equity gained in the stock market which you have also failed to include in your 1 dimensional analysis. And the cycle goes on.


Many have little assets in the stock market.
Perhaps most have little assets in the stock market compared to owning a home.

In aggregate perhaps you are correct. But that is like saying a guy worth zero and a guy worth $2 million on average each have $1 million and stating on average they are both well off.

Stocks are extremely skewed towards the wealthy. In fact, to the wealthy, stock gains have probably way more than made up for any home losses. Not so for the average joe sitting on a house that was worth $400,000 last year but only $250,000 this year.

Thus your "multi-dimensional" analysis totally misses the boat thrice.

1) You thinking I am not aware of it
2) You forgetting how skewed the distribution of stock gains is.
3) You not realizing how big the housing bubble is and how many areas are affected on a population wide basis

You act as if you are totally ignorant about how many people live in bubble areas of California, Florida, Phoenix, Boston, Las Vegas, etc etc etc.

Yes the bubble areas are getting killed and it is starting to expand elsewhere. And for the most part, stock gains are NOT covering the losses for most, and even IF stock gains did cover home losses for the masses what pray tell says that will be true looking ahead 3 years from now?

the cycle goes on.
Multi-dimensional analysis indeed.

Mish
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