Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: stockman_scott who wrote (8727)	11/1/2002 11:31:09 PM
From: H James Morris	Respond to of 89467

Yeah I know. If wasn't for Microsoft I'd still be working. Actually I just started working but that's a different conversation. Thanks for the lead on SYK I bought some.:)

To: stockman_scott who wrote (8727)	11/1/2002 11:37:36 PM
From: SOROS	Read Replies (2) \| Respond to of 89467

Wisdom from Greenweenie's last little talk: “Well, first of all, Congressman, let me say that it is certainly the case that the surveys of consumer confidence have gone down. And the reason they have gone down are many. But, consumer spending in retail markets has not. And indeed, our interest is actually what people do, not what they say. Indeed, as I point out in my written text, the same time that the indexes of consumer confidence fall -- fell, there’s been a big surge in motor vehicle sales in the early weeks of July. So that I think we have to be aware that on occasion, as good as these measures are of consumer confidence, they often don’t necessarily represent what people are going to do, where we care what they’re going to do as far as the economy is concerned. On the issue of debt, a goodly part of the rise in debt is mortgage debt, but that mortgage debt has not been going up faster than the rise in the market value of homes. Indeed, it’s been going up less, and that actual new equity is still increasing. So, a goodly part of the rise in debt is merely a reflection of the significant rise in home ownership, and the rise in the market value of homes, which to a large extent is a function of one, the low interest rates, two, the shortage of buildable land, and three, and importantly, the incredible rise in immigration – a third of the rise in -- in the household formation is from immigration, and that's been a major factor holding the price level of homes up. We’ve looked at the bubble question, and we’ve concluded that it is most unlikely mainly because, one, we have a very diverse real estate market throughout the country. We have so many different areas which don’t arbitrage one another as do stock prices. And the transaction costs in homes is very high. You cannot readily sell a home without a fairly large cost, and, perhaps even more importantly, you have to move, so that they type of underlying conditions that -- that creates bubbles are very difficult to initiate in the housing market. It’s actually easier in England where they have had bubbles because it’s a smaller geographical area. But there’s – we’ve seen no evidence that a national bubble in home values which would then collapse and create the type of problems you correctly identify are likely to happen. So -- and indeed, I might say the evidence of the last few months is that the acceleration in prices which we saw earlier is beginning to phase down so that it is not an issue on the table at the moment. It is theoretically a concern. We do watch it, and if it changes, obviously we would try to conceive of actions we could take to change it, but that is not an issue that we think needs to be addressed by policy at this stage.”