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To: LLCF who wrote (174258)	6/21/2002 6:36:55 AM
From: Earlie	Read Replies (2) \| Respond to of 436258

Dak: I wonder what percentage of the population understand this insane situation? My guess would be less than one percent. As most of us on this thread have noted for some time, "it is going to end badly". Best, Earlie

To: LLCF who wrote (174258)	6/21/2002 7:27:46 AM
From: Giordano Bruno	Read Replies (2) \| Respond to of 436258

Truth is stranger than fiction. Write It Down Before It Falls Down The housing bubble, represented by $12.04 trillion in homeowner home real estate valuation, and $10.757 trillion in original home mortgage and secondary housing market paper, is the biggest such bubble in history. It has more than doubled its size since 1995. Signs now exist of an increase in mortgage problems: In the first quarter of 2002, more than 4.65% of mortgage loans nationwide were delinquent (30 days past due), the highest level in ten years, and the rate of mortgage defaults is rising. Fannie Mae has taken extraordinary measures to roll over troubled homeowners' mortgages, in order not to have the level of defaults show up. But the housing bubble cannot be sustained. The principal boundary condition is reality: Households with declining real standards of living, are not able to take out of their incomes what is necessary to pay rising home prices, and the demands of ever larger mortgages. Lyndon LaRouche has proposed putting the financial system through Chapter 11 bankruptcy reorganization, as part of the process of a New Bretton Woods monetary system. That would include writing down a good part of the mass of U.S. housing paper. If that is not achieved, as mortgage defaults increase, beyond the ability of Fannie Mae and Greenspan to control them, the leverage that has been built into the housing market will come undone, with lightening de-leveraging of the entire market. Six trillion dollars of fictitious real estate value will deflate rapidly. Mortgage defaults will intensify, and millions of families will be devastated. The grand payoff is that the housing bubble's puncture will bring down consumer spending, and the U.S. financial system which Greenspan et al. built it to sustain. Seriously interesting stuff DAK. larouchepub.com

To: LLCF who wrote (174258)	6/21/2002 9:10:23 AM
From: yard_man	Read Replies (1) \| Respond to of 436258

No doubt it's a bubble ... folks who say it isn't should read what Angell wrote about the Nazdaq one year before it started to crack. The idea that the value of real-estate will do nothing but appreciate over long periods of time has become very firmly engrained. The end of this is going to be interesting. Think of all the folks who were absolutely convinced that they were doing the "right" thing by buying "all the house they could afford." So many pundits told them so. I remember a vendor who was visiting from California in 99. Talk turned to housing prices and I mentioned that I recieved a small amount of an inheritance on the death of my grandfather and that I was using the bulk of the funds to reduce mortgage debt. This vendor, a PHd working in a financial area, said, "Oh, they say you shouldn't do that." The implication being that such monies should always be invested ... in stocks and allowed to grow.