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

To: Jim Willie CB who wrote (1137)	12/9/2001 11:36:22 AM
From: Oblomov	Respond to of 306849

JW... I agree. There is incredible emotion associated with housing "ownership", and it is far greater than the hype and enthusiasm associated with the New Economy equity bubble of the late 1990s. This is a major bulwark against the fall in housing prices. But, if the tough love that I envision comes to pass, then there will be no safe-haven asset classes, including that of housing. And for some time, demographic trends and declining credit quality will result in a housing market that in aggregate does not keep pace with the rate of CPI inflation. Further, what is now emerging is a tiered credit market in which there is a glut of money for those with able credit (but these folks are unwilling to borrow), and dearth of money for those with bad credit and those in desperate need of credit. The credit market will not be as hospitable to housing "owners" as it has been in the recent past. The events of the past few years have taught me volumes about the influence of monetary policy on culture and microeconomic behavior. The perception of the infallibilty of the Fed in its ability to rescue the economy (much as one "rescues" a drunk from jail or "rescues" a spendthrift from burden of his debts) could only have taken hold in a culture born of monetary excess... it's a fascinating feedback loop.