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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (7598)	6/11/2004 12:09:50 PM
From: dpl	Read Replies (1) \| Respond to of 116555

" what else could take it's place -- somehow prices would have to at least not erode terrribly, but there would have to be some new game -- I can't imagine one now. " There would have to be another asset that is bigger than residential RE.There is none. If you look at the economic history of the USA from the end of WWII you will see that the first 40 years were "normal" expansions and contractions.About 1984 you had your first bubble..commercial RE.It was small compared to present day and only a small portion of the econ became a bubble econ.Even so when it popped it took another bigger bubble(stock-1995-2000) to get an expansion going.The "normal" econ could not shake off the effects of the burst bubble like the government is trying to do now. When the stock bubble burst another bigger and more leveraged one took over(residential RE).When it bursts there is nothing left to "inflate" that is big enough. In a very basic level the USA econ has slowly gone from a "normal" econ to a "bubble" econ over the space of 20 years. One more thought.Every time an economic report like the employment report comes out there is a debate on how "real" it is.It really does not matter.Any real growth in employment is from the RE bubble.All that is important is what happens to it. David