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Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: gpowell who wrote (3423)	11/3/2001 12:32:16 PM
From: Ahda	Respond to of 24758

In SF the cost factor of housing increased due to demand and income that was adequate enough to afford the price. Here in LA part of continuation of property increase could have been from people who moved from SF to seek employment in LA. The added incentive was the 200,000 exclusion of capital gains. That added incentive in the case of some will be income that might end up being used to live on as the job market dries up. I know that some first time home buyers have given up on the possibility of buying a house in LA at this time as the price exceeds their income ability and options packages no longer offer ease of housing. This is California problem right now and might well be the same in NY. Creating an economic direction from this, one can assume that deflation will transpire in this part of the nation. Too extrapolate this to the whole is probably not accurate as in portions of the whole where demand was not so great nor income bizarre housing remained within means. To add however to the nation the cost of the fear of terror implies the cost of doing business will increase across the nation. As Bart employees request wage increase so will most Unions in the nation due to the increase in cost of living that is very likely to occur with the increased security needs. I can't call that deflation but inflation in prices across the board in new unseen costs. Fear tends to paralyze so if you have a certain number of people who see logic in the numerical figures that do prove minor you also have the other element that is being fed from the media and the out look becomes major caution. A slow down of spending is clearly seen in business development. People are now being taught to be aware of what they do. The combination of both to me means very limited growth if any at all. My biggest fear is the policy of the FED and what is going to be the end result when there is no room left to cut rates?

To: gpowell who wrote (3423)	11/3/2001 7:16:39 PM
From: ahhaha	Read Replies (1) \| Respond to of 24758

Oh? Didn't you know? The FED now defines a constant rate of inflation as no inflation. Inflation now means accelerating inflation, change in the rate of growth of inflation. The last time the CPI went negative: 1932. The factors driving the CPI are somewhat related to home inflation. When homes were deflating during the early '90s the CPI continued upward at a slowing pace. From '88 to '94 the CPI steadily declined in its rate of growth from 10% to 2%. Since '94 when Greenspan decisively moved away from money targeting to interest rate targeting the CPI has continually risen from 2% to 10% very much like it did during the late '60s.