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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: mistermj who wrote (174480)	11/7/2005 11:37:28 AM
From: Noel de Leon	Respond to of 281500

Greenspan's remarks address household debt not consumer debt. I was talking about consumer debt which is over 19% of personal income and does not include household debt. Consumer debt is historically high. Household debt is over 18% of household assets and is historically high as well. If house prices fall then that percentage increases. As an example if house prices fall 10 % then the household debt increases to 20%. With respect to household debt look at the number of mortgage defaults in the US. "Mortgage defaults in California rose for the first time in more than three years during the third quarter, as slower price gains and riskier loans gave struggling homeowners less margin for error, data released Thursday showed. A separate report released Thursday showed other signs of a cooling housing market, as inventories of unsold new homes nationwide rose to a record." And further down in the article: "Still, there's a growing raft of indicators pointing to a slowing housing market in California and elsewhere. Commerce Department data released Thursday showed sales of new U.S. homes rose more slowly than expected in September, in part because sales in the West -- which includes California -- tumbled 12% last month. New single-family home sales rose 2.1% last month to a seasonally adjusted annual rate of 1.222 million units. Inventories of unsold new homes nationwide increased to a record of 493,000, a supply that would take 4.9 months to sell. The median new-home price fell 5.7%, the biggest decline since January 2003." knowledgeplex.org

To: mistermj who wrote (174480)	11/7/2005 1:00:50 PM
From: Keith Feral	Respond to of 281500

Incomes have been falling as price levels have been rising. In the real world, global deflationary wage pressure is offsetting domestic real estate appreciation. Greenspan was such an idiot at the top of the last inflation rate cycle in 2000. He whacked them back too far in 2002. He is overcranking the fed funds rate again as he ignores the serious impact of the hurricanes in the SE where millions of people are homeless in FL, LA, MS, and AL over the past few years. He always remains committed to overreacting to whatever political drama is the theme of the day. Used to be dot com stocks, then it was 911, now it's the surge in energy prices. The FED has done a miserable job waiting for their policy changes to promote price stability.