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To: Ilaine who wrote (56865)	1/11/2001 11:05:11 AM
From: pater tenebrarum	Read Replies (1) \| Respond to of 436258

yes, the bubble is concentrated in California, NYC, and a few other locations. nevertheless, the sharp decline in home equity ownership IN SPITE of generally rising RE prices (whether the price rises are bubble-like or not doesn't matter much w.r.t. this) shows that leverage in the system has steadily increased...you should have seen the FNM chairclown today : "interest rate movements can't hurt us, 'cause we're HEDGED". LOL! they're leveraged 1:154!!! i'd say there's PLENTY of counterparty risk there.

To: Ilaine who wrote (56865)	1/11/2001 11:10:35 AM
From: Mike M2	Respond to of 436258

Cobalt, I don't have the latest figures but the % of home equity has declined in spite of rising real estate prices because baby brats have tapped into their home equity to fund their consumption and stock market speculation. People forget that for a while easy money fuels asset prices and loan collateral values enouraging more debt until people are overextended. At that point we are stuck with a fixed amount of debt and collapsing collateral values- S&L debacle. Mike