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

To: regli who wrote (41986)	11/30/2005 2:36:17 PM
From: Elroy Jetson	Respond to of 116555

If you look at the balance sheets of Home Builders, you see very little to distinguish their situation today from twelve years ago when so many went bankrupt. It is all very well and good to be proud of the fact that you use only used furniture, or have only linoleum floors in your headquarters, as Kaufman & Broad boasted of in their headquarters office in the 1980s. But these companies went broke in spite of their cheap furnishings because of excessive leverage. Just figure out how much their asset prices would need to decline in order to wipe out their net assets. Its usually not a very significant decline. .