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

To: John Vosilla who wrote (39499)	8/29/2005 12:46:34 AM
From: Lizzie Tudor	Read Replies (2) \| Respond to of 306849

Lets put it this way, AETHER which was a telecom company working in wireless networking changed their corporate business plan to MORTGAGED BACKED SECURITIES as soon as it became more profitable to be in mortgage backed securites than anywhere else. Mortgage backed securities are a nonproductive business. This is NOT the kind of thing you want to see in a good economy. The capital should have stayed in wireless networking where who knows, they may have invented something. The mortgage market sucked the money away.

To: John Vosilla who wrote (39499)	8/29/2005 2:58:13 AM
From: X Y Zebra	Read Replies (1) \| Respond to of 306849

you must agree there has been a huge misallocation of capital of late. Still problems with venture capital money flows, capital investment that generates required IRR to be approved capital will flow to the optimum point of maximum return and maximum safety. such point will vary between different investors POV in terms of 'what reward at what risk' and here is a key point for part of the reason of the success of real estate, in this instance residential real estate, which is somehow enhanced because it is the individual investor who has found he has full control and with relative safety (because he can SEE and kick the real estate), whereas stock, bonds, and any other financial vehicle, all the individual investor has to go by is his/her financial statement that indicates whether he is doing well or not. so are you going to fault the individual investor because too much money is going into a profitable venture? why should capital flow to a point or a place that carries a disproportionate level of risk in terms of its possible reward? politicians are getting so outrageous in their law-making and regulations for this and that, or the other that eventually they wil drive capital OUT of this country... as it has already happened in certain segments capital has no borders. if politicians are driving capital away by ridiculous laws and there is an alternative for capital to flow to... change the politicians... they are disposable anyway. -g [not to mention that they are sub-humans]