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

To: mishedlo who wrote (40587)	11/4/2005 7:40:18 AM
From: russwinter	Respond to of 116555

Pimco's Simon's hit it, "robbing Peter to pay Paul" is going to get more difficult, because of rates, an actual decline in housing prices, and ultimately (next) credit revulsion. We need to learn more about this enabler, foreign CDO "investors" (think many are leveraged hedge funds). I think that's who has been running the carry trade, borrowing at nominal rates in Euros and Yen, and buying mortgaged backs. Goldman Sachs on household formation and housing: Demographics and the housing market: myth and reality November 2, 2005 Household formation - the growth rate in the number of households - has slowed sharply in the last three decades, to 1½% in the 1990s from 2½% in the late 1970s and only 1% in the last five years. The slowdown in household formation growth is best explained by three factors: (1) reduced growth in the 20- to 29-year-old population, (2) a post-September 11 immigration slowdown, and (3) a higher share of illegal entrants and family members among recent immigrants. The slowdown in household formation casts doubt on the view that the current housing boom is being driven primarily by demographic fundamentals. At least at the national level, the demographics are relatively unfavorable for the housing sector.