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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?


To: Ramsey Su who wrote (37301)7/30/2005 9:19:07 AM
From: russwinter  Read Replies (2) | Respond to of 110194
 
This amounts to a decrease in consumer spending of about 1 1/4%" of gross domestic product>

The Ministry of Truth is amazing isn't it, wonder if this is their new confidence game, telling folks it won't hurt? Practicationers of the Joseph Goebbels Big Lie school of communication. The audience apparently?
ernestfunclub.com

She must just be doing simpleton analysis based only on equity extraction. In a house price down turn of any kind, it is easy to visual the kind of extraction of the last couple years returning to the norm, or even going to zip. $125 billion less equity extraction would be 1.25% of GDP.
idorfman.com

However, obviously the effect would be far, far greater on the collateral value behind trillions in loans, and then have further employment and solvency effects on the entire world economy. Relevant charts:

idorfman.com

ernestfunclub.com



To: Ramsey Su who wrote (37301)7/30/2005 11:38:23 AM
From: Crimson Ghost  Respond to of 110194
 
Actually I am encouraged by her remarks.

Minimizing the economic impact of a drop in house prices (even if not 100% true) would seem to signal more determination to write finis to the housing bubble. Even if that requires considerably higher rates.