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

To: Les H who wrote (17068)	2/10/2004 12:54:55 PM
From: Elroy Jetson	Respond to of 306849

Those income aberrations in the mid-eighties are America going on a spending binge. As of 1986, Consumer debt is no longer tax deductible so Americans start putting their debt on home equity loans - as evidenced by the sudden and steady erosion of "home owners equity." home.pacbell.net

To: Les H who wrote (17068)	2/10/2004 1:37:32 PM
From: Elroy Jetson	Respond to of 306849

You can really see the funding for the bubble in the chart of "Private Net Financial Investment" taken from the Federal Reserve data. home.pacbell.net During the recession of 1990 - 1991, investment rises from a slight consumption of capital to 5.5% of GDP in 1992. Net Financial Investment declines from the 5.5% level in 1992 to a 2% consumption of capital in 2000, as capital flowed into the speculative stock market bubble. With the top of the bubble in 2000, Net Financial Investment briefly starts to recover, but this is quickly reversed in 2003 due to tax cuts and massive governement - and Net Financial Investment once again becomes negative.