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

To: dpl who wrote (7838)	6/11/2004 6:15:43 PM
From: yard_man	Read Replies (1) \| Respond to of 116555

what you say make a lot of sense, but I'm not studied enough on that part of history to know if the first part is correct -- it does make sense. On what basis do you compare that cycle to the prior cycles and conclude it was a mini-bubble -- is it because the S&Ls had to be bailed out a little while later I do think you are right that there isn't anything big enough to replace housing as the next bubble -- so that means policy will be directed going forward at 1) preventing the bust of the real estate bubble or 2) preventing its demise from sending us into recession / depression a deflationary collapse then, seems inevitable -- only question is whether or not we get a serious bout of inflation before the collapse sets in - (I know, I know -- we've already had serious inflation in housing -- serious inflation, esp. of money and credit ...but I mean the prices of other goods as well -- some might argue that commodities are only coming back to reasonable "real" levels of growth in price -- not sure I buy that argument -- oil is still cheap -- blah, blah, blah -- it's only cheap because you take as given the currency depreciates against everything). My son asked me today why it takes most people 15-30 years to pay off a house -- why are they so expensive relative to other material goods or services (my rephrase) I guess if we look at affordability from just the standpoint of carrying costs -- housing has remained quite affordable in a lot of areas -- but I think if we were to look at it in terms of real incomes -- hours worked by an average worker to pay for an average house -- housing has gotten relatively speaking -- very, very expensive. Shortly before the nazcarp bust, I received a couple of lump sums -- one was from my grandfathers estate and another was a gift from my in-laws -- I applied the sum from my grandfathers estate toward my mortgage and the amount from my in-laws to pay off a note on my truck -- I remember telling one of our PhD consultants this -- and look he looked at me very strange and said -- "You know, they say you shouldn't do that ..." Intimating that better returns could be had by investing the money -- I was, at the time, applying these amounts to loans having 6% and 7% rate -- I viewed as an instant return -- elimination of future interest payments. He thought I was nuts.