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To: TobagoJack who wrote (96847)	4/20/2001 12:21:05 PM
From: Mike M2	Respond to of 436258

Jay, I don't see an inventory recession - I see a post bubble recession where debt levels will be reduced, consumption and investment will decline, savings rate rise, malinvestments liquidated . Chugs Mike

To: TobagoJack who wrote (96847)	4/20/2001 12:41:18 PM
From: Ilaine	Respond to of 436258

A couple of things worth mentioning about US mortgage debt - First, the interest paid on mortgages is tax deductible - that includes home equity loans, as well. If you are in a high tax bracket but have a low mortgage rate (6% or so), your effective rate of interest is actually quite low. Many people refinance just so they can keep getting the deduction. Even if you put the money into treasuries you will make more on it than you pay in interest after the tax break - it's almost free money. Second, capital gains tax on the sale of your primary residence have been effectively eliminated - the exemption is $500K for a married couple - and can be taken every five years. Since that law went into effect, people have started buying much more expensive houses. So any appreciation in value of your house is untaxed - great investment - assuming it does appreciate.