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

To: mishedlo who wrote (20514)1/5/2005 4:08:11 PM
From: Elroy Jetson  Respond to of 116555
 
Absolutely. I forget the exact numbers - I'll look them up if I have chance.

From memory it's something like this:

For every $100 of appreciation in a stock portfolio the public will spend $10;

For every $100 of home appreciation the public will spend $40.

I know the Fed was surprised that the wealth effect from the stock market bubble was somewhat more than they had expected. I suspect the wealth effect from the real estate bubble is greater as well. This is the result of a growing infatuation with debt by most members of our society.
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To: mishedlo who wrote (20514)1/6/2005 5:27:33 AM
From: Square_Dealings  Respond to of 116555
 
<But our central case is that consumer spending does not fall in response to big housing market movements.>

That idiots case couldnt possibly include the present one in which banks have loaned 120% of the value at 40 year lows to people that only need to be alive to qualify.

M


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