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

To: Elroy Jetson who wrote (12681)	10/2/2004 7:05:48 PM
From: loantech	Respond to of 116555

<You're right, when we look carefully at this chart, one might clearly imagine that Equity Extraction by Home Owners could possibly peak within the next few years and then head down.> By then the damage will have been done. Money borrowed possibly never to be repaid.

To: Elroy Jetson who wrote (12681)	10/2/2004 7:07:55 PM
From: mishedlo	Read Replies (2) \| Respond to of 116555

Here's data suggesting that the insurance costs to doctors has more to do with the insurers than because of malpractice lawsuits, the latter of which have declined over time along with a decline in the size of judgments. Caps on damage awards just penalize the victims--no benefit to the medical profession. >>Medical Malpractice Caps Fail to Prevent Premium Increases, According to Weiss Ratings Study Physicians in States with Caps Suffer 48% Increase in Median Annual Premiums Even While Insurers Enjoy Slowdown in Payouts<< weissratings.com >>NO LINK BETWEEN CAPS AND PREMIUMS: Vice President Cheney would have Americans believe there is a direct link between the insurance premiums doctors pay and rising health-care costs. Not so. Last year, Weiss Ratings, Inc., an independent financial services analysis company, issued a comprehensive study showing that in 19 states with malpractice caps, physicians suffered a 48.2 percent jump in their premiums. >>Meanwhile, in 32 states without caps, premiums rose by only 35.9 percent. In other words, there is no connection between caps and premium rates. Instead, the premium problem comes from insurance industry pricing practices that gouge doctors. While malpractice payouts actually went down by 8.2 percent between 2001 and 2002, there was no corresponding decrease in doctors' premiums, meaning the insurance industry pocketed the difference. The Des Moines Register points out, "There's simply no correlation between lawsuits and insurance rates. Rather, insurance rates are tied to the climate of the stock and bond market, where insurance companies invest much of their money." CALIFORNIA CASE STUDY: The state of California put medical malpractice caps in place in 1975. A 1993 study of medical malpractice insurance in California showed the caps had "done little more than enrich California malpractice insurers with excessive profits, at the expense of malpractice victims." According to a study released in California yesterday, damage caps now come at the expense of the most gravely injured.<< americanprogress.org

To: Elroy Jetson who wrote (12681)	10/2/2004 7:10:08 PM
From: GraceZ	Read Replies (2) \| Respond to of 116555

I always forget how impossible it is to have any kind of adult interaction with you. You can go around with the figures all you want but the fact is that people have chosen for any number of reasons to assign a higher value to real estate while at the same time others have decided that RE lending has less inherent risk thus giving a large group of people access to low fixed or floating rate financing for any number of things, some of which are not current consumption. I have people approach me all the time with the idea of borrowing out of their house for purposes of investment since one can invest with a reasonable amount of risk in some vehicle that pays 10% while borrowing at 5%, to them it seems like a no brainer. If you want to think of this kind of activity as "eating the house" then go ahead. I think of it as "betting the farm" and usually talk them out of it. Most here want to think that people are borrowing from their houses out of necessity and certainly that is true in places, but the fact is that the house has become the lowest cost, easiest to use financing vehicle for spending that used to be financed at much higher rates using consumer loans and credit cards. The evidense for that is the slow growth in consumer financing which used to have a rather stellar growth trajectory. Back in the mid 1990s it was growing at double digit annualized rates and has recently dropped to low to mid single digit rates. economagic.com