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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Tom Gordon who wrote (264)	8/18/2001 1:42:17 PM
From: Ramsey Su	Read Replies (1) \| Respond to of 306849

Tom, first of all, I want to state that I am very bearish of real estate related issues but timing, and who are the big losers, are different questions. That is why I lurk here. Each sector of the industry had done a few things, thinking they had learned from previous mistakes. So this time it will be different. For example, brokerages had been making real estate loans secured by a combination of real estate in the conventional sense, with the downpayment portion secured by stock portfolios. The aggressive lenders would even allow 401Ks as security. It would be most interesting watching these loans unwind, if the real estate market tanks. I have been thinking also about the potential of another wave of refinancing if the rates drop further. I opine that it is unlikely there will be much volume. Many who had already refinanced in the last few years may not have enough equity for a refi and to overcome the cost of the refi if interest rate is only going to be marginally lower. As for Argentina, they are pegged to the US dollar so they cannot devalue without first changing their monetary system. It is simple math. Any country that is pegged to a foreign currency must have a balanced current account or surplus. Otherwise, they will run out of reserve and all hell breaks loose, as in Argentina now. I wouldn't worry about Argentina too much because in the end, it is a small enough economy that the IMF can fix by loaning them the current acct deficits. Ramsey