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

To: mishedlo who wrote (29735)	5/10/2005 2:17:39 PM
From: Crimson Ghost	Read Replies (4) \| Respond to of 116555

Mish: BCA admits there is a housing bubble, but still expects the Fed to stop tightening soon. They are honest enough to opine that this means the bubble will continue instead of assuming it will burst on its own. U.S. Housing: Sucking Up Too Many Resources 08:40:00, May 10, 2005 Housing has assumed a worryingly large role in the U.S. economy and financial system, and it will be traumatic when the bubble bursts. There is growing speculation in U.S. housing, by both lenders and borrowers. Housing is a small sector of the economy, but has assumed a giant role. Real estate lending represents a record 53% of bank loans, housing accounts for a record 29% of total household assets, and investment in residential real estate is 35% of private investment, the highest since the early 1970s. The Fed is uncomfortable about the housing boom, but it has a tiger by the tail because the fallout will be severe when the bubble bursts. Fortunately, this will not happen any time soon given low mortgage rates and rising employment.