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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 (33218)	6/12/2005 11:53:09 AM
From: 10K a day	Respond to of 306849

1 in 10 loan applicants (show income to ) qualify for the median priced home. What is the prob??? I don't see any prob.

To: Elroy Jetson who wrote (33218)	6/12/2005 12:19:19 PM
From: John Vosilla	Read Replies (2) \| Respond to of 306849

I suggested some would continue cashing in their chips and leave but relocating somewhere else in the good old USA. Only a major margin call would force all to sell at the same time. You are right only aliens from outer space can afford a home as a first time home buyer there without government subsidies <g>

To: Elroy Jetson who wrote (33218)	6/12/2005 1:38:41 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 306849

But they can't -- because there are no wealthy buyers from outer space to take their place. that is the problem with any Ponzi scheme--it doesn't create real wealth, just phantom wealth driven by more outsiders "coming in" (and more and sloppier credit to make up for the gap between income growth and price growth). but of course everybody cannot monetize this wealth because that would be like everybody making money in a Ponzi scheme. instead, only a lucky few walk away clean. what is interesting about the current bubble is that there is so much artificial monetization (i.e., monetization of paper "profits" via cash-outs, as opposed to selling bubble properties and realizing gains outright). this is far in excess of artificial monetization in the stock-market bubble of the late 90s, when margin debt only reached a total of two or three hundred billion (cumulative)--that is less than today's home bubbleheads take out in home margin in a single year through cash-outs. cumulatively, of course, mortgage debt is, what, 30 or 50 times what margin debt was? the artificial monetization ends when credit can become no easier. the focus on rate of change, and rate of change of rate of change, will be important indicators for this monumental shift. those are the things that CI is so helpful in keeping tabs on.