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

To: Elroy Jetson who wrote (26491)	1/10/2005 11:05:03 AM
From: John Vosilla	Respond to of 306849

What has been most disingenuous is the new found belief that high leverage and historic low returns on investment will be okay as we are entering a new age of very low interest rates. Thus variable rate debt will continue to have low payments and cap rates will not ever adjust upward back to the norm. This expectation in an environment of record twin deficits and true costs of living hidden by the BLS rising at rates only seen in the 1970's in modern times. We might be entering a period with the worst of all worlds for the leveraged masses. Inflation in cost of capital and operating expenses. Only flat to slightly rising rents, sales and wages do not materially help bail anyone out. Results in a deflation of asset values.

To: Elroy Jetson who wrote (26491)	1/10/2005 8:16:27 PM
From: SouthFloridaGuy	Respond to of 306849

<<The economic weakness created by excess debt occurs among those desirous of borrowing, but can borrow no further.>> Yup, that's the part that people don't get. It's the marginal people who will get hurt, will in turn hurt this mal-adjusted economy when they retrench, and who have become a greater part of the population over Greenspan's tenure. It really is a two-tiered society.