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

To: J. P. who wrote (7227)	12/9/2002 1:09:34 PM
From: Conan	Respond to of 306849

Now that teacher making 50K a year knows what it is like to be a bank. Leverage -- including an asset like a home you "own" -- can be a beautiful thing when prices are rising. Conan

To: J. P. who wrote (7227)	12/9/2002 4:32:02 PM
From: Jim McMannis	Respond to of 306849

RE:"I believe there is tremendous inflation and it has all been swept into real estate. I believe this inflation was created on purpose (by the government via FNM and agressive easing) to flood the consumer markets with easy money in order to buoy the economy during a period of extreme business overcapacity and slack demand." Yes and no. Tax breaks are very inflationary and Real Estate get at least 4. I would say it's more fortuitous circumstance rather than planning. The government had to ease because of the rest off the economy falling off the cliff after the y2k bubble. Real Estate certainly has benefited from it. Every Realtor meeting I go to, someone gets ups and brags how real estate has saved the economy. Naturally I roll my eyes. RE:"How else would say, a teacher making 50K a year who bought a house 5 years ago, get 100K pocket money to buy furniture, refrigerator, a trip, a car? Normally it would take that individual a lifetime to save that amount from their paycheck." Funny how those tax breaks work. People are pocketing hundreds of thousands for just owning a house. I don't hear Gore and the democrats complaining about this "gift to the rich" either. OTOH, they bust on eliminating double taxation on dividends or even a reduction of capital gains taxes on securities as a "gift to the rich". Meanwhile the securities market wallows and the real estate market bubbles. As long as this situation continues of uneven tax preferences continues...The RE bubble will remain and the rest of the economy will wallow. So one will feed off the other. It's all blowing my mind. And it will not be without circumstance either. I've never seen a bubble result in a soft landing. Jim