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

To: mishedlo who wrote (23018)	2/7/2005 7:23:24 PM
From: lisalisalisa	Read Replies (2) \| Respond to of 116555

That’s some crazy stuff. Everyone at my job can not believe we have not bought a house yet. Pharmacy techs brag about their investments and leverage their home appreciation to buy BMW's. It seems everyone is upgrading their ki9tchens, bathrooms, selling their old, smaller houses and buying new ones. It is THE topic of conversation in the pharmacy. Not just among the pharmacist, but among the techs, the drivers and even the students. I would say at least half of the students who come through our pharmacy are 'home owners', and drive nicer cars than me... It is very entertaining to watch, though it is also VERY hard to deal with the sales pressure they put on my to join the game. I don’t think this is going to end well. But how can I say that to people? This is my only real outlet, the only place I can attempt to find a varying opinion. This seems in many ways worse than the dot-com bubble...and to be so close on its heels in time. Nobody thinks the two are related AT ALL. Even connecting the two, sentiment wise gets my co-workers in an uproar of the now tired but much repeated conventional wisdom about houses being different than stocks... The housing frenzy, as judge by my little world at the pharmacy has increased in fevor by 100-200% I would say in excitements, popularity of the topic as the conversation centerpiece, and general euphoria over just the last 2-3 months. I wonder how a blow off top in housing would play out? Could prices blow off 100% in a 5 month period and simply suck all the money into it before it collapses? The 'conventional wisdom' is that it 'levels off. I don’t think this ends by just 'leveling' off...I am getting the feeling this is going to be much worse than the dot-com crash (if it ever occurs) ? 1/3 of the spending and jobs in the PHX area are some how tied to housing. Much higher if you assume people are spending and eating out and buying new clothes based on their future feelings and projections about their homes appreciation. I just can’t get a grasp on how big this is going to be. I hope I am wrong in many ways, so many people I know are neck deep in debt. And the thing is none of them need to be, they are doing it to 'get rich'. Perhaps I am the fool though, that is the way I feel at times now. And even if it does crash, what kind of joy am I really going to get from that? There is nobody to tell you I’ told you so'...nobody to laugh about ‘pets.com’ with. It won’t be as funny this time IMO. At least after the dot-com crash there was much less leverage from then publics standpoint. But this lending bubble has people leveraged, with leverages on top of leverages and creditbuilt off of the credit from something with only a 5% down payment...and you know the story. Got treasuries? take care.