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To: Crimson Ghost who wrote (174582)	6/22/2002 10:22:37 AM
From: yard_man	Read Replies (1) \| Respond to of 436258

1) interest rates are not the ONLY determinant of housing demand (it is rather funny how all pundits were telling us that inflation and interest rates being low == support for the stock market -- would be translated into an increasing demand for equities. Where are they now?) 2) it is not a given that stocks will not keep going down or that yields will not keep going down it is possible that foreigners could start dumping treasuries and push rates up -- but the fact that, if they have been dumping, it hasn't pushed rates up makes me think the lower yields are predicting a very rapid slowdown in the economy. It may well be that as foreigners pull out -- much treasury debt can be absorbed here. The dollar may stabilize or bounce for a bit, but I think we'll see lower yields AND lower housing demand. This doesn't compute for a lot of folks, but wait and let's see what transpires over the next 3 - 6 months. To be sure -- when housing cools -- given the current interest rate environment -- the builders will have over-shot to some extent. The awareness of excess will be a quick thing that happens overnight, much like the bloom coming off the tech flower.

To: Crimson Ghost who wrote (174582)	6/22/2002 1:09:56 PM
From: benwood	Respond to of 436258

I agree that when interest rates spike, it will be sudden and it will be a fairly big move, and it will end the refinance boom, the inflated first mortgage boom, and quickly prick the real estate bubble. I think it's timing will be very close to when Roach suddenly is in the majority with his thinking of double dip recession. I think this time is fairly close, too. I think there will be a follow on move to lower rates, but that it will be of no use, same as it did not help the US equity markets after March of 2000, and also how it has not helped Japan for the past 12 years and counting.