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

To: CalculatedRisk who wrote (35212)	7/12/2005 4:16:58 PM
From: Elroy Jetson	Respond to of 306849

Its unfortunate that Reagan's fantasy-land "supply-side economics" was the ideological force driving those who drafted the 1997 tax act, just as it created the tax changes when Reagan was elected. The first round of supply-side nonsense caused a trillion dollar melt-down in the banking industry and an upside explosion in debt creation. I suspect the results of this second wave of supply-side nonsense will cause worse. .

To: CalculatedRisk who wrote (35212)	7/12/2005 4:19:32 PM
From: Jim McMannis	Respond to of 306849

RE:"Blaming the Act for the RE bubble is one thing (we just disagree), blaming Clinton seems partisan." Not the only act that is causing the RE bubble but a major factor. Especially in the move to Florida or Vegas mentality. Didn't have to wait until 55 either. As for blaming Clinton, Nah. Congress' lobbied by the NAR had a lot to do with it. Not to mention all the second homes they had. Seems rather Ironic that Clinton, a Dem, signed a tax cut that's ended up having huge repercusions within' the economy. I only mention Clinton because most like to associate tax cuts "for the rich" to Bush. Like I suggested before. Just repeal the law and see what happens to Real Estate vs say other investments where you actually have to pay capital gains tax. I'm sure a lot of stock holders would like to get a break on 500k of their long term capital gains. Might even help the stock market. Right now, it a Real Estate game. For a lot of reasons. On a side note. The 1997 tax act is costing the treasury well over 25 billion a year in lost revenue. Closer to 50 billion. All from a President that was famous for balancing the budget.

To: CalculatedRisk who wrote (35212)	7/12/2005 4:57:05 PM
From: Crimson Ghost	Read Replies (2) \| Respond to of 306849

Bill Fleckenstein thinks bonds more overvalued than stocks. A Rant on Runty Rates Returning to bonds, I gave this market a fair amount of thought over the weekend, and it occurs to me that the bond market is in some ways more absurdly valued than the stock market. With the 10-year yielding a little over 4.10% (about 100 basis points lower than the Fleckenstein-observed, non-government-sanctioned rate of inflation), with oil at $60 plus or minus, and with the housing market in a full-blown mania (of course, the bond market is one reason for that), why any investor would willingly accept this ludicrous coupon is beyond my comprehension. Usually, folks make the argument that the bond market is where it is because it's forecasting deflation -- a concept I find nearly impossible to believe. Maybe we're going to have deflation somewhere down the road. But if that's going to occur, as I've stated often, the path required to get us there lies too far in the future, with too many complications, to be discounted currently by the bond market. The Stuff That Manias Are Made Of Pricing in the bond market seems to me to be a function of various factors (as I've discussed in the past), none of which has anything to do with value. But the absurdity of bond yields is part of what powers the real-estate market and, tangentially, part of what powers the stock market. Said differently, if the bond market ever starts to decline in earnest, that for sure will be curtains for both these other markets (although they could decline on their own for other reasons). I haven't commented on the bond market for the longest time, simply because I could not understand (and still can't, really) how it was where it was. However, the more I think about it, the more I believe that the bond market, as well as the real-estate market, are far more ludicrously valued than the stock market. That's not to say that stocks look attractive, but just that they seem a bit less outlandish, compared to those two markets."

To: CalculatedRisk who wrote (35212)	7/12/2005 10:37:55 PM
From: John Vosilla	Respond to of 306849

I can't blame Clinton for any of that. IMHO the best president of the half century and trust me I'm no Democrat. Today in the hear and now those at the controls today have to do something fast. Either reverse some some the favorable tax benefits of RE, eliminate negative amo and IO loans, tighten underwriting standards, increase required down payments. The Republicans of today should stop acting like Democrats of the 1960's and take a much tougher stance on the socialized financing programs geared toward home ownership or investment property for people who can't really afford it.