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

To: Lizzie Tudor who wrote (5268)	9/12/2002 8:05:09 PM
From: MulhollandDrive	Respond to of 306849

>>maybe these recent forclosure numbers don't mean anything either<< yes... it could be yet another temporary spike or the beginning of a trend.

To: Lizzie Tudor who wrote (5268)	9/12/2002 8:17:25 PM
From: SouthFloridaGuy	Read Replies (2) \| Respond to of 306849

My point is that foreclosure rates seem to have no bearing on the future, as far as predicting higher forthcoming foreclosure rates. Corporate bond defaults as measured by high yield spreads began to rise after the 1998 Asian Crisis, yet the stock market, particularly credit risk Nasdaq stocks, had the biggest boom ever from that period into mid 2000. Does that mean they should be ignored? Clearly not. The point is that reality and perception are two totally different things. Why do the foreclosure rates have meaning? Because they paint a picture of structural problems in the economy. This is the crux of the bear argument...imbalances went on for so long, were completely ignored, only to create even larger imbalances. The fact that in 1999 default rates were so high, and that in 2002 they are even higher, in the midst of a bull market in housing, should really scare people. I can't even imagine what will happen when the macroeconomy hits 1991 levels of unemployment.