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

To: nextrade! who wrote (5600)	9/26/2002 8:57:26 AM
From: J. P.	Read Replies (1) \| Respond to of 306849

From the article you posted: "The importance of cash-out REFIs to the economy is highlighted by Chairman Greenspan’s congressional testimony when he singled out the ability of consumers to convert the rise in home prices to spendable cash as a major factor underlying the economic recovery." People have been saying this on this thread for some time now. This kind of "economic recovery" is totally artificial as the asset inflation will have to be repaid while the actual worth of the underlying asset deflates. A real economic recovery involves rising wages and decreasing unemployment. This is more like lending a homeless person 50 bucks for his cardboard box, and when he uses it to buy cigarettes and booze calling his spending and the corresponding success of cigarrette and booze companies "economic recovery". But it begs the question where does the next 50 bucks come from? (Unless of course you now deem the neighboring cardboard box worth 100 bucks, and lend the person another $50 to go there). Sooner or later that source of funds dries up, or somebody realizes cardboard boxes ain't worth that much.